EXHIBIT 4.1
================================================================================
NORAM ENERGY CORP.
To
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
Trustee
__________________
SUPPLEMENTAL INDENTURE No. 2
Dated as of November 1, 1998
_________________
6 3/8% Term Enhanced ReMarketable Securities(SM)
$500,000,000
================================================================================
NORAM ENERGY CORP.
SUPPLEMENTAL INDENTURE NO. 2
$500,000,000
6 3/8% Term Enhanced ReMarketable Securities(SM)
SUPPLEMENTAL INDENTURE No. 2, dated as of November 1, 1998, between NORAM
ENERGY CORP., a Delaware corporation (the "Company"), and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, a national banking association duly organized and existing
under the laws of the United States of America, as Trustee (the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee an
Indenture, dated as of February 1, 1998 (the "Indenture"), providing for the
issuance from time to time of one or more series of the Company's Securities.
Section 301 of the Indenture provides that various matters with respect to
any series of Securities issued under the Indenture may be established in an
indenture supplemental to the Indenture.
Subparagraph (7) of Section 901 of the Indenture provides that the Company
and the Trustee may enter into an indenture supplemental to the Indenture to
establish the form or terms of Securities of any series as permitted by Sections
201 and 301 of the Indenture.
For and in consideration of the premises and the issuance of the series of
Securities provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the Holders of the Securities of such series,
as follows:
ARTICLE ONE
Relation to Indenture; Additional Definitions
Section 101. Relation to Indenture. This Supplemental Indenture No. 2
constitutes an integral part of the Indenture.
-1-
Section 102. Additional Definitions. For all purposes of this
Supplemental Indenture No. 2:
(1) Capitalized terms used herein shall have the meanings specified
herein or in the Indenture, as the case may be;
(2) "Accreted Dollar Price" means, with respect to the Additional
Remarketing Date, the Dollar Price as of the Initial Investor Maturity Date
(determined by the Remarketing Dealer on the Notification Date for the
Initial Investor Maturity Date as if the Initial Investor Maturity Date
were not a Window Period Remarketing Date) plus the product of (i) such
Dollar Price less the principal amount of TERMS outstanding as of the
Initial Investor Maturity Date, (ii) the weighted average per annum Window
Period Interest Rate for the Remarketing Window, and (iii) the number of
days in the Remarketing Window divided by 360;
(3) "Additional Remarketing Date" has the meaning set forth in
Section 302;
(4) "Applicable Basic Margin Above the Applicable Reference Index"
means the lowest firm bid quotation, expressed as a spread (in the form of
a percentage or number of basis points) above the Applicable Reference
Index, determined by the Remarketing Dealer on the third Business Day prior
to the Window Period Remarketing Date from the bid quotations requested
from five Reference Money Market Dealers for the aggregate principal amount
of the TERMS at a price in U.S. dollars equal to par, but assuming (i) an
issue date of the Window Period Remarketing Date, with settlement on such
date without accrued interest, (ii) a maturity date equal to the day that
is 52 weeks from the Window Period Remarketing Date, (iii) that the TERMS
are callable by the Remarketing Dealer on a weekly basis after the Window
Period Remarketing Date, (iv) that the TERMS will be required to be
repurchased by the Company at par on the day that is 52 weeks from the
Window Period Remarketing Date if not previously called by the Remarketing
Dealer, and (v) a stated annual interest rate, payable on the Additional
Remarketing Date, equal to the Applicable Reference Index plus the spread
bid by the applicable Reference Money Market Dealer. If fewer than five
Reference Money Market Dealers bid as described above, then the Applicable
Basic Margin Above the Applicable Reference Index will be the lowest of
such firm bid quotations obtained as described above;
(5) "Applicable Reference Index" means, with respect to the
Remarketing Window, the rate of interest for each Interest Reset Date as
determined by the Remarketing Dealer based on one (and only one) of the
following indexes selected by the Company and notified to the Remarketing
Dealer no later than the fourth Business Day prior to the Window Period
Remarketing Date: (i) the per annum rate equal to the one week eurodollar
rate shown on Telerate page 3750 (or any successor page) as of 11:00 a.m.,
London time, on the applicable Interest Determination Date, or (ii) the per
annum rate equal to the average of the federal funds rates shown on
Telerate page 5 (or any successor page) as of 11:00 a.m., New York City
time, on the applicable Interest Determination Date and each of the four
-2-
Business Days prior to such Interest Determination Date, or (iii) the one-
week "AA" non-financial commercial paper rate shown on the internet world
wide web page (or any successor page) of the Board of Governors of the
Federal Reserve System at xxx.xxx.xxx.xxx.xx/xxxxxxxx/XX/, as of 11:00
a.m., New York City time, on the applicable Interest Determination Date;
(6) "Applicable Spread" means the lowest firm bid quotation, expressed
as a spread (in the form of a percentage or number of basis points) above
the Base Rate, obtained by the Remarketing Dealer on the Re-pricing Date
from bid quotations requested from five Reference Corporate Dealers for the
aggregate principal amount of the TERMS at the Dollar Price, but assuming
(i) an issue date of the Initial Investor Maturity Date (if such date is
not a Window Period Remarketing Date) or the Additional Remarketing Date
(if the Initial Investor Maturity Date is a Window Period Remarketing Date)
with settlement on such date without accrued interest, (ii) a maturity date
equal to the Maturity Date, and (iii) a stated annual interest rate,
payable semiannually, equal to the Base Rate plus the spread bid by the
applicable Reference Corporate Dealer. If fewer than five Reference
Corporate Dealers bid as described above, then the Applicable Spread will
be the lowest of such bid quotations obtained as described above;
(7) "Base Rate" means 5.66% per annum;
(8) "Business Day," when used with respect to the TERMS, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in The City of New York are authorized or obligated by
law or executive order to close and, in the case of the determination of
the Applicable Reference Index that is based upon eurodollar deposits in
the City of London, each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York or
the City of London are authorized or obligated by law or executive order to
close;
(9) "Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Subsidiaries less, without duplication: (a)
total current liabilities (excluding indebtedness due within 12 months);
(b) all reserves for depreciation and other asset valuation reserves, but
excluding reserves for deferred federal income taxes arising from
accelerated amortization or otherwise; (c) all intangible assets such as
goodwill, trademarks, trade names, patents and unamortized debt discount
and expense carried as an asset; and (d) all appropriate adjustments on
account of minority interests of other Persons holding common stock of any
Subsidiary, all as reflected in the Company's most recent audited
consolidated balance sheet preceding the date of such determination;
(10) "Dollar Price" means, with respect to the TERMS, the present
value, as of the Initial Investor Maturity Date, of the Remaining Scheduled
Payments discounted to the Initial Investor Maturity Date, on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months), at the
Treasury Rate; provided that, in the case of the Additional
-3-
Remarketing Date, the Dollar Price will be the Accreted Dollar Price; and
provided, further, that the Dollar Price in the case of the Initial
Investor Maturity Date or the Additional Remarketing Date may be any other
amount agreed to in writing by the Remarketing Dealer and the Company;
(11) The term "indebtedness," as applied to the Company or any
Subsidiary, means bonds, debentures, notes and other instruments
representing obligations created or assumed by any such corporation (i) for
money borrowed (other than unamortized debt discount or premium); (ii)
evidenced by a note or similar instrument given in connection with the
acquisition of any business, properties or assets of any kind; (iii) as
lessee under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles; and (iv) any
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation listed in clause (i), (ii) or (iii) above. All
indebtedness secured by a lien upon property owned by the Company or any
Subsidiary and upon which indebtedness any such corporation customarily
pays interest, although any such corporation has not assumed or become
liable for the payment of such indebtedness, shall for all purposes hereof
be deemed to be indebtedness of any such corporation. All indebtedness for
borrowed money incurred by other Persons which is directly guaranteed as to
payment of principal by the Company or any Subsidiary shall for all
purposes hereof be deemed to be indebtedness of any such corporation, but
no other contingent obligation of any such corporation in respect of
indebtedness incurred by other Persons shall for any purpose be deemed to
be indebtedness of such corporation. Indebtedness of the Company or any
Subsidiary shall not include (i) amounts which are payable only out of all
or a portion of the oil, gas, natural gas, helium, coal, metals, minerals,
steam, timber, hydrocarbons, or geothermal or other natural resources
produced, derived or extracted from properties owned or developed by such
corporation; (ii) any indebtedness incurred to finance oil, gas, natural
gas, helium, coal, metals, minerals, steam, timber, hydrocarbons, or
geothermal or other natural resources or synthetic fuel exploration or
development, payable, with respect to principal and interest, solely out of
the proceeds of oil, gas, natural gas, helium, coal, metals, minerals,
steam, timber, hydrocarbons, or geothermal or other natural resources or
synthetic fuel to be produced, sold, and/or delivered by the Company or any
Subsidiary; (iii) indirect guarantees or other contingent obligations in
connection with the indebtedness of others, including agreements,
contingent or otherwise, with such Persons or with third Persons with
respect to, or to permit or ensure the payment of, obligations of such
other Persons, including, without limitation, agreements to advance or
supply funds to or to invest in such other Persons, or agreements to pay
for property, products or services of such other Persons (whether or not
conferred, delivered or rendered), and any demand charge, throughput, take-
or-pay, keep-well, make-whole, cash deficiency, maintenance of working
capital or earnings or similar agreements; and (iv) any guarantees with
respect to lease or other similar periodic payments to be made by other
Persons;
(12) "Initial Investor Maturity Date" has the meaning set forth in
Section 208;
-4-
(13) "Initial Period Interest Payment Date" has the meaning set forth
in Section 204(a);
(14) "Interest Determination Date" has the meaning set forth in
Section 303;
(15) "Interest Payment Date" has the meaning set forth in Section
204(a);
(16) "Interest Rate to Maturity" means the interest rate which shall
be determined by the Remarketing Dealer by 3:30 p.m., New York City time,
on the third Business Day immediately preceding the Initial Investor
Maturity Date (if such date is not a Window Period Remarketing Date) or the
Additional Remarketing Date (if the Initial Investor Maturity Date is a
Window Period Remarketing Date) (the "Re-pricing Date"), to the nearest one
hundred-thousandth (0.00001) of one percent per annum, and will be equal to
(i) the sum of the Base Rate plus the Applicable Spread, which will be
based on the Dollar Price of the TERMS, or (ii) the Negotiated Rate
mutually agreed upon between the Company and the Remarketing Dealer;
(17) "Interest Reset Date" has the meaning set forth in Section 303;
(18) "Issue Date" has the meaning set forth in Section 204(a);
(19) "Maturity Date" has the meaning set forth in Section 203;
(20) "Moody's" means Xxxxx'x Investors Services, Inc. or any successor
to the rating agency business thereof;
(21) "Negotiated Rate" means the interest rate agreed to by the
Company and the Remarketing Dealer on a negotiated transaction basis as the
Interest Rate to Maturity;
(22) "NorAm Long-Term Indebtedness" means, collectively, the Company's
outstanding: (a) Medium-Term Notes, Series A and B (due through 2001), (b)
8.875% Notes due 0000, (x) 0 0/0% Xxxxx xxx 0000, (x) 8.90% Debentures due
2006, (e) 10% Debentures due 2019, (f) Term Loan (due November 13, 1998)
under that certain $150,000,000 Term Loan Agreement, dated as of May 15,
1997, as amended, among the Company, Citibank, N.A., as Agent, and various
lenders party thereto and (g) any long-term indebtedness (but excluding for
this purpose any long-term indebtedness incurred pursuant to any revolving
credit facility, letter of credit facility or other similar bank credit
facility) of the Company issued subsequent to the TERMS and prior to the
Termination Date containing covenants substantially similar to the
covenants set forth in Sections 603 and 604, but not containing a provision
substantially similar to the provision set forth in Section 605;
(23) "Notification Date" has the meaning set forth in Section 301;
-5-
(24) "Optional Redemption Price" has the meaning set forth in Section
501;
(25) "Principal Property" means any natural gas distribution property,
natural gas pipeline or gas processing plant located in the United States,
except any such property that in the opinion of the Board of Directors is
not of material importance to the total business conducted by the Company
and its consolidated Subsidiaries. "Principal Property" shall not include
any oil or gas property or the production or proceeds of production from an
oil or gas producing property or the production or any proceeds of
production of gas processing plants or oil or gas or petroleum products in
any pipeline or storage field;
(26) "Reference Corporate Dealers" means leading dealers of publicly
traded debt securities of the Company in The City of New York (at least one
of which shall be the Remarketing Dealer or one of its affiliates) selected
by the Company;
(27) "Reference Money Market Dealers" means leading dealers, selected
by the Company, of publicly traded debt securities of the Company in The
City of New York (at least one of which shall be the Remarketing Dealer or
one of its affiliates) who are also leading dealers in money market
instruments;
(28) "Regular Record Date" has the meaning set forth in Section
204(b);
(29) "Remaining Scheduled Payments" means, with respect to the TERMS,
the remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate only and assuming (i) the principal
amount of the TERMS will be due on November 1, 2013 (whether or not a
Business Day) whether or not such date is the same as the Maturity Date and
(ii) that the Company did not elect the Initial Investor Maturity Date to
be a Window Period Remarketing Date;
(30) "Remarketing Agreement" means the Remarketing Agreement, dated as
of November 10, 1998, by and between the Company and Credit Suisse First
Boston Corporation;
(31) "Remarketing Date" means either the Initial Investor Maturity
Date or, if the Initial Investor Maturity Date is designated as a Window
Period Remarketing Date, the Additional Remarketing Date thereafter;
(32) "Remarketing Dealer" means Credit Suisse First Boston Corporation
and its successors and assigns under the Remarketing Agreement;
(33) "Remarketing Window" means the period of time from, and
including, the Window Period Remarketing Date to, but excluding, the
Additional Remarketing Date;
-6-
(34) "Re-pricing Date" means the meaning set forth in the definition
of Interest Rate to Maturity;
(35) "Restricted Subsidiary" means any Subsidiary which owns a
Principal Property;
(36) "Sale and Leaseback Transaction" means any arrangement entered
into by the Company or any Restricted Subsidiary with any Person providing
for the leasing to the Company or any Restricted Subsidiary of any
Principal Property (except for temporary leases for a term, including any
renewal thereof, of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted
Subsidiaries), which Principal Property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person;
(37) "Scheduled Maturity Date" has the meaning set forth in Section
203;
(38) "S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to the rating agency business
thereof;
(39) "Subsequent Period Interest Payment Date" has the meaning set
forth in Section 204(a);
(40) "Termination Date" has the meaning set forth in Section 605;
(41) "TERMS" has the meaning set forth in Section 201;
(42) "Treasury Rate" means the yield to maturity of the offered-side
quote for the then current 10-Year US Treasury Bond shown on Telerate page
500 (or any successor page), as of 11:00 a.m., New York City time, on the
Notification Date (or, if a quote for such 10-Year US Treasury Bond is not
available, the interpolated yield to maturity using then current US
Treasury Bonds or the yield to maturity of another benchmark US Treasury
Bond that has a tenor of approximately ten years). In the event that the
offered-side quote for the then current 10-Year US Treasury Bond is no
longer shown on Telerate page 500 and there is no successor page, the
Treasury Rate will be calculated by the Remarketing Dealer and will be a
yield to maturity equal to the arithmetic mean of the secondary market bid
rates, as of approximately 11:00 a.m., New York City time, on the
Notification Date, of five leading primary United States government
securities dealers (no more than one of which shall be the Remarketing
Dealer or an affiliate of the Remarketing Dealer) selected by the
Remarketing Dealer, excluding the highest and lowest of such bids, for an
aggregate principal amount of the then current 10-Year US Treasury Bond
equal to the aggregate principal amount of the TERMS (or, if a quote for
such 10-year US Treasury Bond is not available, the interpolated yield to
maturity using then current US Treasury Bonds or the yield to maturity of
another benchmark US Treasury Bond that has a tenor of approximately ten
years). If fewer than
-7-
three such United States government securities dealers provide bids, the
Treasury Rate shall be the average of such bids. If only one such United
States government securities dealer provides such a bid, then the Treasury
Rate shall be equal to such bid;
(43) "Window Period Interest Rate" has the meaning set forth in
Section 303;
(44) "Window Period Remarketing Date" has the meaning set forth in
Section 302;
(45) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 2; and
(46) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 2.
ARTICLE TWO
The Series of Securities
Section 201. Title of the Securities. There shall be a series of
Securities designated the "6 3/8% Term Enhanced ReMarketable Securities(SM)"
(the "TERMS").
Section 202. Limitation on Aggregate Principal Amount. The aggregate
principal amount of the TERMS shall be limited to $500,000,000; provided,
however, that the authorized aggregate principal amount of the TERMS may be
increased above such amount by a Board Resolution to such effect.
Section 203. Maturity Date. The ultimate maturity date of the TERMS
shall be scheduled to be November 1, 2013 (the "Scheduled Maturity Date") but
may be adjusted due to the occurrence, if any, of either, or both of (i)
modification pursuant to Section 302 as a result of the occurrence of the
Remarketing Window or (ii) modification by the Company pursuant to Section 215
(such date, as may be adjusted in the manner described above, is referred to
herein as the "Maturity Date"). Except in the limited circumstances described in
Sections 401 and 501, the TERMS are not subject to redemption by the Company
prior to the Maturity Date.
Section 204. Interest and Interest Rates.
(a) The TERMS shall bear interest at the rate of 6 3/8% per annum from
and including November 10, 1998 (the "Issue Date") to, but excluding, the
Initial Investor Maturity Date. Such interest shall be payable semiannually in
arrears on May 1 and November 1 of each year, commencing May 1, 1999 (each such
date, an "Initial Period Interest Payment Date"). Interest on the TERMS
accruing from the Initial Investor Maturity Date (if such date is not a Window
Period Remarketing Date) or the Additional Remarketing Date (if the Initial
Investor Maturity Date is a
-8-
Window Period Remarketing Date) will be paid semiannually in arrears on each day
that is a six-month anniversary of such date (each such day, a "Subsequent
Period Interest Payment Date," and together with each Initial Period Interest
Payment Date, an "Interest Payment Date") until the principal of the TERMS is
paid or made available for payment.
(b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Persons in whose names the
TERMS (or one or more Predecessor Securities) are registered at the close of
business on the fifteenth calendar day (whether or not a Business Day)
immediately preceding such Interest Payment Date (each such date, a "Regular
Record 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 shall either (i) be paid to the Person in whose name such TERMS (or one or
more Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of the TERMS not less than
10 calendar days prior to such Special Record Date, or (ii) 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 TERMS 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 the Indenture.
(c) The rate at which the TERMS will bear interest and the Interest
Payment Dates and Regular Record Dates for such interest are subject to
adjustment, in each case on or after the Initial Investor Maturity Date,
pursuant to the provisions set forth in Article Three. The provisions of
Sections 205 and 206 will continue to be applicable notwithstanding any such
adjustment.
(d) Notwithstanding Sections 204(a) and Sections 204(b), interest on
the TERMS accruing during the Remarketing Window, if applicable, will be payable
on the Additional Remarketing Date to the Persons to whom principal is payable
on the Additional Remarketing Date.
(e) Interest on the TERMS will be computed on the basis of a 360-day
year of twelve 30-day months, except that interest accruing during the
Remarketing Window will be computed on the basis of the actual number of days in
such period and a 360-day year.
(f) Interest payable on any Interest Payment Date and at the Maturity
Date or date of earlier redemption or repurchase of the TERMS will be the amount
of interest accrued from and including the most recent Interest Payment Date to
which interest has been paid or duly provided for (or from and including the
Issue Date if no interest has been paid or duly provided for with respect to the
TERMS) to, but excluding, such Interest Payment Date or the Maturity Date or
date of redemption or repurchase, as the case may be. If any Interest Payment
Date or the Maturity Date or date of earlier redemption or repurchase of TERMS
falls on a day that is not a Business Day, the payment otherwise then due will
be made on the next Business Day (and without any interest or other payment in
respect of any such delay) with the same force and effect as if it were made on
the date such payment was originally payable.
-9-
Section 205. Place of Payment. The Place of Payment where the TERMS may
be presented or surrendered for payment shall be Houston Industries Plaza, c/o
Office of Investor Services, 0000 Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000.
Section 206. Place of Registration or Exchange; Notices and Demands With
Respect to the TERMS. The place where the Holders of the TERMS may present the
TERMS for registration of transfer or exchange and may make notices and demands
to or upon the Company in respect of the TERMS shall be the Corporate Trust
Office of the Trustee.
Section 207. Redemption; Sinking Fund Obligations.
(a) Pursuant to Section 501, the TERMS are subject to redemption by
the Company from the Remarketing Dealer on the Remarketing Date. If the
Remarketing Dealer for any reason does not purchase all of the TERMS on the
Remarketing Date, or elects not to remarket the TERMS, or in certain other
limited circumstances described in Section 401, the Company will be required
pursuant to Section 401 to repurchase the TERMS from the Holders thereof on the
Remarketing Date at a price equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to but excluding the Remarketing Date.
(b) The Company has no obligation to redeem or purchase any TERMS
pursuant to any sinking fund or analogous requirement or upon the happening of a
specified event or at the option of a Holder thereof.
Section 208. Remarketing Date; Mandatory Tender. Either November 1, 2003
(the "Initial Investor Maturity Date") or, if the Initial Investor Maturity Date
is designated as a Window Period Remarketing Date pursuant to Section 302, the
Additional Remarketing Date thereafter, shall be the Remarketing Date for the
TERMS. If the Remarketing Dealer elects to remarket the TERMS on the Remarketing
Date, except in the limited circumstances described in Article Three, (i) the
TERMS will be subject to mandatory tender to the Remarketing Dealer at 100% of
the principal amount thereof for remarketing on such date, on the terms and
subject to the conditions described herein, and (ii) on and after the
Remarketing Date, the TERMS will bear interest at the rate specified in Section
303.
Section 209. Percentage of Principal Amount. The TERMS shall be initially
issued to the public at a price equal to 99.792% of their principal amount.
Section 210. Global Securities. The TERMS shall be issuable in whole or
in part in the form of one or more Global Securities. Such Global Securities
shall be deposited with, or on behalf of, The Depository Trust Company ("DTC"),
New York, New York, which shall act as Depositary with respect to the TERMS.
Such Global Securities shall bear the legends set forth in the form of Security
attached as Exhibit A hereto.
-10-
Section 211. Form of Securities. The TERMS shall be substantially in the
form attached as Exhibit A hereto.
Section 212. Securities Registrar. The Trustee shall initially serve as
Securities Registrar for the TERMS.
Section 213. Defeasance and Discharge; Covenant Defeasance. Article
Fourteen of the Indenture, including without limitation, Sections 1402 and 1403
thereof, shall apply to the TERMS; provided, however, that such provisions shall
not be applicable to the TERMS prior to the Remarketing Date unless the
Remarketing Agreement shall have been terminated and all amounts owed to the
Remarketing Dealer shall have been paid thereunder; and provided further that,
no Defeasance or Covenant Defeasance shall be effective unless and until the
Company shall deposit in trust for the benefit of the Holders of the TERMS
money, U.S. Government Obligations, or a combination thereof, which, through the
payment of principal or interest in respect thereof in accordance with their
terms, will provide money in an amount sufficient to pay the principal of and
interest on the TERMS on any date prior to the Maturity Date on which the TERMS
shall be subject to repurchase.
Section 214. Additional Event of Default. The failure to repurchase the
TERMS when required pursuant to the terms and conditions thereof or the terms
and conditions of this Supplemental Indenture No. 2, shall constitute an Event
of Default under the Indenture.
Section 215. Modification of the Maturity Date. The Company (upon notice
by telephone, confirmed in writing, to the Remarketing Dealer, the Trustee and
DTC) may modify the Maturity Date by designating an anniversary of the Initial
Investor Maturity Date (if there is no Remarketing Window) or of the Additional
Remarketing Date (if there is a Remarketing Window) not later than the tenth
anniversary thereof as the Maturity Date (whether or not such day is a Business
Day). Such notice must be given no later than 4:00 p.m., New York City time, on
the fourth Business Day prior to the Initial Investor Maturity Date (if there is
no Remarketing Window) or no later than the designation by the Company of the
Additional Remarketing Date (if there is a Remarketing Window).
ARTICLE THREE
Tender of Terms; Remarketing
Section 301. Mandatory Tender. Provided that the Remarketing Dealer
gives notice to the Company and the Trustee on a Business Day not earlier than
ten nor later than five Business Days prior to the Initial Investor Maturity
Date of its election to purchase the TERMS for remarketing (the "Notification
Date"), each TERMS will be automatically tendered, or deemed tendered, to the
Remarketing Dealer for purchase on each of (i) the Initial Investor Maturity
Date and (ii) if the Initial Investor Maturity Date is designated as a Window
Period Remarketing Date as described in Section 302, the Additional Remarketing
Date thereafter, except in the circumstances
-11-
described in Sections 401 and 501. The purchase price for the TERMS to be paid
by the Remarketing Dealer on the Remarketing Date will equal 100% of the
principal amount thereof and will be payable as provided in Section 304. On the
Remarketing Date, the Company shall pay accrued and unpaid interest on the TERMS
to, but excluding, the Remarketing Date. When the TERMS are tendered for
remarketing on the Remarketing Date, the Remarketing Dealer may remarket the
TERMS for its own account at varying prices to be determined by the Remarketing
Dealer at the time of the remarketing. If the Remarketing Dealer elects to
purchase the TERMS, the obligation of the Remarketing Dealer to purchase the
TERMS on the Remarketing Date is subject to, among other things, the conditions
that no "Termination Event" under the Remarketing Agreement shall have occurred
and be continuing.
Section 302. Remarketing Dates; Adjustment to Maturity Dates. If the
Remarketing Dealer elects to purchase the TERMS for remarketing on the Initial
Investor Maturity Date, then not later than 4:00 p.m., New York City time, on
the fourth Business Day prior to the Initial Investor Maturity Date, the Company
may notify the Remarketing Dealer, the Trustee and DTC by telephone, confirmed
in writing that it elects the Initial Investor Maturity Date to be a Window
Period Remarketing Date (the "Window Period Remarketing Date"); provided,
however that, the Remarketing Dealer pursuant to the terms and provisions of the
Remarketing Agreement may allow a shorter notice period. The Company will be
eligible to make such election if at such time its senior unsecured debt is
rated at least "Baa3" by Xxxxx'x and "BBB-" by S&P or the equivalent thereof by
such rating agency at the time of such election; provided, that the Remarketing
Dealer may waive this requirement in its sole discretion. If the Company does
not elect the Initial Investor Maturity Date to be a Window Period Remarketing
Date in accordance with this Section 302, the Initial Investor Maturity Date
will be the Remarketing Date and the Scheduled Maturity Date will be the
Maturity Date, unless modified by the Company pursuant to Section 215. If the
Company elects the Initial Investor Maturity Date to be a Window Period
Remarketing Date in accordance with this Section 302, then (i) the Additional
Remarketing Date will be one of the 52 following one-week anniversary dates of
the Initial Investor Maturity Date (or if any such day is not a Business Day,
the next following Business Day) designated by the Company not later than the
fifth Business Day prior to such one-week anniversary date (the "Additional
Remarketing Date"); provided that, the Remarketing Dealer pursuant to the terms
and provisions of the Remarketing Agreement may permit the Company to withdraw
such designation and to continue the Remarketing Window, as though it had not
designated such one-week anniversary date as the Additional Remarketing Date, in
which case such designation shall be deemed not to have occurred; and provided
further, that, if the Company fails during the Remarketing Window to so
designate the Additional Remarketing Date, the Additional Remarketing Date will
be the date that is 52 weeks after the Initial Investor Maturity Date (or if
such day is not a Business Day, the next following Business Day) and (ii) the
Maturity Date will be the date that is the tenth anniversary of the Additional
Remarketing Date (whether or not a Business Day), unless modified by the Company
pursuant to Section 215.
Section 303. Determination of Applicable Interest Rate. From and
including the Initial Investor Maturity Date (if such date is not a Window
Period Remarketing Date) or the Additional Remarketing Date (if the Initial
Investor Maturity Date is a Window Period Remarketing
-12-
Date), to but excluding the Maturity Date, the TERMS will bear interest at the
Interest Rate to Maturity. During the Remarketing Window, if any, the TERMS will
bear interest at the Window Period Interest Rate. The interest rate for the
Remarketing Window will be reset on each Interest Reset Date during the
Remarketing Window and will equal the sum of the Applicable Reference Index in
respect of the applicable Interest Reset Date plus the Applicable Basic Margin
Above the Applicable Reference Index (rounded to the nearest one hundred-
thousandth (0.00001) of one percent per annum), in each case as calculated by
the Remarketing Dealer (the "Window Period Interest Rate"). The Window Period
Remarketing Date and the Wednesday of each week during the Remarketing Window
will be an "Interest Reset Date." The "Interest Determination Date" applicable
to an Interest Reset Date will be the second Business Day preceding such
Interest Reset Date. The interest rate in effect from and including the Window
Period Remarketing Date (which is the first day of the Remarketing Window) to,
but excluding, the first Interest Reset Date during the Remarketing Window will
be determined as if the Window Period Remarketing Date were an Interest Reset
Date and the Interest Determination Date for such Interest Reset Date were the
second Business Day prior to the Window Period Remarketing Date. The Company
shall notify the Remarketing Dealer of the identity of the Reference Money
Market Dealers no later than four Business Days prior to the Window Period
Remarketing Date.
Section 304. Notification of Results; Settlement.
(a) The Remarketing Agreement provides that, if the Remarketing
Dealer has previously notified the Company and the Trustee on the Notification
Date of its intention to purchase all of the TERMS on the Initial Investor
Maturity Date, the Remarketing Dealer will notify the Company, the Trustee and
DTC by telephone, confirmed in writing, by 4:00 p.m., New York City time, on the
third Business Day prior to the Initial Investor Maturity Date (if such date is
not a Window Period Remarketing Date) or the Additional Remarketing Date (if the
Initial Investor Maturity Date is a Window Period Remarketing Date), of the
Interest Rate to Maturity. The Remarketing Agreement provides that, if the
Initial Investor Maturity Date is a Window Period Remarketing Date, the
Remarketing Dealer will provide the Company, the Trustee and DTC with notice in
accordance with the preceding sentence, by 4:00 p.m., New York City time, on the
second Business Day prior to the Initial Investor Maturity Date, of the Window
Period Interest Rate which will initially be in effect.
(b) While the TERMS are Global Securities and held by DTC or its
nominee, or a successor Depositary or its nominee, all of the TERMS will
automatically be delivered to the account of the Trustee by book-entry through
DTC (or such successor Depositary) pending payment of the purchase or redemption
price therefor as provided in the next following paragraph, on the Remarketing
Date.
(c) The Remarketing Agreement provides that, if the Remarketing Dealer
purchases the TERMS on the Remarketing Date and the TERMS are Global Securities
and held by DTC or its nominee, or a successor Depositary or its nominee, the
Remarketing Dealer will make or cause the Trustee to make payment to each Holder
of TERMS by book-entry through DTC (or such successor Depositary) by the close
of business on such date, against delivery through DTC (or
-13-
such successor Depositary) by the close of business on such date, against
delivery through DTC (or such successor Depositary) of each such Holder's TERMS,
of 100% of the principal amount of the TERMS that shall have been purchased for
remarketing by the Remarketing Dealer. If the Remarketing Dealer does not
purchase all of the TERMS on the Remarketing Date, the Company shall make or
cause to be made such payment for the TERMS, pursuant to Section 401. In any
case, the Company shall make or cause the Trustee to make payment of interest to
each Holder of TERMS on the Remarketing Date by book-entry through DTC (or such
successor Depositary) by the close of business on such date. In the event that
the Company elects to redeem the TERMS from the Remarketing Dealer pursuant to
Section 501, the Company shall pay the Optional Redemption Price therefor in
same-day funds by wire transfer to an account designated by the Remarketing
Dealer on the Remarketing Date against delivery of the TERMS.
(d) The tender and settlement procedures described above, including
provisions for payment by purchasers of TERMS in the remarketing or for payment
to selling Holders of TERMS, may be modified to the extent required by DTC (or
such successor Depositary) or to the extent required to facilitate the tender
and remarketing of TERMS in certificated form, if the TERMS are no longer Global
Securities at the time of the remarketing. In addition, the Remarketing Dealer
may, in accordance with the terms of the Indenture, modify the tender and
settlement procedures set forth above in order to facilitate the tender and
settlement process.
ARTICLE FOUR
Repurchase
Section 401. Repurchase. In the event that (i) the Remarketing
Dealer for any reason does not notify the Company of the Interest Rate to
Maturity or the initial Window Period Interest Rate commencing as of the Window
Period Remarketing Date by (a) in the case of the Interest Rate to Maturity,
4:00 p.m., New York City time, on the third Business Day prior to the Initial
Investor Maturity Date (if the Initial Investor Maturity Date is not a Window
Period Remarketing Date) or the Additional Remarketing Date (if the Initial
Investor Maturity Date is a Window Period Remarketing Date), or (b) in the case
of the initial Window Period Interest Rate, 4:00 p.m., New York City time, on
the second Business Day prior to the Window Period Remarketing Date, (ii) prior
to the Remarketing Date, the Remarketing Dealer has resigned or been terminated
and no successor has been appointed and assumed the duties thereof on or before
the third Business Day immediately preceding the Remarketing Date, (iii) after
the Notification Date, the Remarketing Agreement shall have been terminated
pursuant to Section 10(a)(i) thereof, (iv) the Remarketing Dealer for any reason
elects not to purchase the TERMS for remarketing on the Remarketing Date, or (v)
the Remarketing Dealer for any reason does not purchase all of the tendered
TERMS on the Remarketing Date, the Company will repurchase all of the
outstanding principal amount of the TERMS on the Remarketing Date at a price
equal to 100% of the principal amount of the TERMS plus all accrued and unpaid
interest, if any, on the TERMS to, but excluding, the Remarketing Date.
-14-
In any such case, payment will be made by the Company to each tendering Holder
of TERMS in accordance with the provisions of Section 304.
ARTICLE FIVE
Redemption
Section 501. Redemption. If the Remarketing Dealer elects to
remarket the TERMS on the Remarketing Date, the TERMS will be subject to
mandatory tender to the Remarketing Dealer for remarketing on such date, in each
case subject to the conditions described in Article Three and Section 401 and to
the Company's right to redeem the TERMS from the Remarketing Dealer as described
in the next sentence. The Company will notify the Remarketing Dealer and the
Trustee, not later than the fourth Business Day immediately preceding the
Initial Investor Maturity Date or the Additional Remarketing Date, if the
Company irrevocably elects to exercise its right to redeem the TERMS in whole
but not in part, from the Remarketing Dealer, on such date at the Optional
Redemption Price. In any such case, the Company shall pay the Optional
Redemption Price therefor in same-day funds by wire transfer to an account
designated by the Remarketing Dealer on the Remarketing Date against delivery of
the TERMS.
The "Optional Redemption Price" shall be the sum of (i) the greater of
(x) 100% of the aggregate principal amount of the TERMS and (y) the Dollar Price
as of the Remarketing Date (which, if the Remarketing Date is the Additional
Remarketing Date, will equal the Accreted Dollar Price) plus (ii) in the case of
either (x) or (y) above, accrued and unpaid interest to, but excluding, the
Remarketing Date.
ARTICLE SIX
Certain Covenants
Section 601. Maintenance of Properties. The Company shall cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary.
Section 602. Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the
-15-
income, profits or property of the Company or any Subsidiary, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any Subsidiary; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
Section 603. Restrictions on Liens. The Company shall not pledge,
mortgage or hypothecate, or permit to exist, and shall not cause, suffer or
permit any Restricted Subsidiary to pledge, mortgage or hypothecate, or permit
to exist, except in favor of the Company or any Restricted Subsidiary, any
mortgage, pledge, lien or other encumbrance (collectively, a "lien" or "liens")
upon, any Principal Property at any time owned by it or a Restricted Subsidiary,
to secure any indebtedness, without making effective provisions whereby the
TERMS shall be equally and ratably secured with or prior to any and all such
indebtedness and any other indebtedness similarly entitled to be equally and
ratably secured; provided, however, that this provision shall not apply to or
prevent the creation or existence of:
(a) undetermined or inchoate liens and charges incidental to
construction, maintenance, development or operation;
(b) the lien of taxes and assessments for the then current year;
(c) the lien of taxes and assessments not at the time delinquent;
(d) the lien of specified taxes and assessments which are delinquent
but the validity of which is being contested at the time by the Company or
such Restricted Subsidiary in good faith and by appropriate proceedings;
(e) the lien reserved in leases for rent and for compliance with the
terms of the lease in the case of leasehold estates;
(f) any obligations or duties, affecting the property of the Company
or such Restricted Subsidiary, to any municipality or public authority with
respect to any franchise, grant, license, permit or similar arrangement;
(g) the liens of any judgments or attachment in an aggregate amount
not in excess of $10,000,000, or the lien of any judgment or attachment the
execution or enforcement of which has been stayed or which has been
appealed and secured, if necessary, by the filing of an appeal bond;
(h) any lien on any property held or used by the Company or a
Restricted Subsidiary in connection with the exploration for, development
of or production of oil, gas, natural gas (including liquefied gas and
storage gas), other hydrocarbons, helium, coal, metals, minerals, steam,
timber, geothermal or other natural resources
-16-
or synthetic fuels, such properties to include, but not be limited to the
Company's or a Restricted Subsidiary's interest in any mineral fee
interests, oil, gas or other mineral leases, royalty, overriding royalty or
net profits interests, production payments and other similar interests,
wellhead production equipment, tanks, field gathering lines, leasehold or
field separation and processing facilities, compression facilities and
other similar personal property and fixtures;
(i) any lien on oil, gas, natural gas (including liquefied gas and
storage gas), and other hydrocarbons, helium, coal, metals, minerals,
steam, timber, geothermal or other natural resources or synthetic fuels
produced or recovered from any property, an interest in which is owned or
leased by the Company or a Restricted Subsidiary;
(j) liens upon any property heretofore or hereafter acquired,
constructed or improved, created at the time of acquisition or within one
year thereafter to secure all or a portion of the purchase price thereof or
the cost of such construction or improvement, or existing thereon at the
date of acquisition, whether or not assumed by the Company or a Restricted
Subsidiary, provided that every such lien shall apply only to the property
so acquired or constructed and fixed improvements thereon;
(k) any extension, renewal or refunding, in whole or in part, of any
lien permitted by subparagraph (j) above, if limited to the same property
or any portion thereof subject to, and securing not more than the amount
secured by, the lien extended, renewed or refunded;
(l) liens upon any property heretofore or hereafter acquired by any
corporation that is or becomes a Restricted Subsidiary after the date
hereof ("Acquired Entity") provided that every such lien (1) shall either
(A) exist prior to the time the Acquired Entity becomes a Restricted
Subsidiary or (B) be created at the time the Acquired Entity becomes a
Restricted Subsidiary or within one year thereafter to secure all or a
portion of the acquisition price thereof and (2) shall only apply to those
properties owned by the Acquired Entity at the time it becomes a Restricted
Subsidiary or thereafter acquired by it from sources other than the Company
or any other Restricted Subsidiary;
(m) the pledge of current assets, in the ordinary course of business,
to secure current liabilities;
(n) mechanics' or materialmen's liens, any liens or charges arising by
reason of pledges or deposits to secure payment of workmen's compensation
or other insurance, good faith deposits in connection with tenders, leases
of real estate, bids or contracts (other than contracts for the payment of
money), deposits to secure duties or public or statutory obligations,
deposits to secure, or in lieu of, surety, stay
-17-
or appeal bonds, and deposits as security for the payment of taxes or
assessments or similar charges;
(o) any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulation for any purpose at any time in
connection with the financing of the acquisition or construction of
property to be used in the business of the Company or a Restricted
Subsidiary or as required by law or governmental regulation as a condition
to the transaction of any business or the exercise of any privilege or
license, or to enable the Company or a Restricted Subsidiary to maintain
self-insurance or to participate in any funds established to cover any
insurance risks or in connection with workmen's compensation, unemployment
insurance, old age pensions or other social security, or to share in the
privileges or benefits required for companies participating in such
arrangements;
(p) any lien of or upon any office equipment, data processing
equipment (including, without limitation, computer and computer peripheral
equipment), or transportation equipment (including, without limitation,
motor vehicles, tractors, trailers, marine vessels, barges, towboats,
rolling stock and aircraft);
(q) any lien created or assumed by the Company or a Restricted
Subsidiary in connection with the issuance of debt securities the interest
on which is excludable from gross income of the holder of such security
pursuant to the Internal Revenue Code, as amended, for the purposes of
financing, in whole or in part, the acquisition or construction of property
to be used by the Company or a Restricted Subsidiary; or
(r) the pledge or assignment of accounts receivable, or the pledge or
assignment of conditional sales contracts or chattel mortgages and
evidences of indebtedness secured thereby, received in connection with the
sale by the Company or such Restricted Subsidiary or others of goods or
merchandise to customers of the Company or such Restricted Subsidiary.
In case the Company or any Restricted Subsidiary shall propose to pledge,
mortgage, or hypothecate any Principal Property at any time owned by it to
secure any indebtedness, other than as permitted by subdivision (a) to (r),
inclusive, of this Section 603, the Company shall prior thereto give written
notice thereof to the Trustee, and the Company shall or shall cause such
Restricted Subsidiary to, prior to or simultaneously with such pledge, mortgage
or hypothecation, by supplemental indenture executed to the Trustee (or to the
extent legally necessary to another trustee or additional or separate trustee),
in form satisfactory to the Trustee, effectively secure all the TERMS equally
and ratably with, or prior to, such indebtedness.
-18-
Notwithstanding the foregoing provisions of this Section 603, the Company
or a Restricted Subsidiary may issue, assume or guarantee indebtedness secured
by a mortgage which would otherwise be subject to the foregoing restrictions in
an aggregate amount which, together with all other indebtedness of the Company
or a Restricted Subsidiary secured by a mortgage which (if originally issued,
assumed or guaranteed at such time) would otherwise be subject to the foregoing
restrictions (not including indebtedness permitted to be secured under clauses
(a) through (r) above) and the Value of all Sale and Leaseback Transactions in
existence at such time (other than any Sale and Leaseback Transaction which, if
such Sale and Leaseback Transaction had been a lien, would have been permitted
by paragraph (j) of this Section 603 and other than Sale and Leaseback
Transactions as to which application of amounts have been made in accordance
with paragraph (l) of this Section 603) does not at the time of incurrence of
such indebtedness exceed 5% of Consolidated Net Tangible Assets. "Value" means,
with respect to a Sale and Leaseback Transaction, as of any particular time, the
amount equal to the greater of (1) the net proceeds from the sale or transfer of
the property leased pursuant to such Sale and Leaseback Transaction or (2) the
fair value, in the opinion of the Board of Directors, of such property at the
time of entering into such Sale and Leaseback Transaction, in either case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
Section 604. Restrictions on Sale and Leaseback Transactions. The Company
shall not, nor shall it permit any Restricted Subsidiary to, enter into any Sale
and Leaseback Transaction unless the net proceeds of such sale are at least
equal to the fair value (as determined by the Board of Directors) of such
Principal Property and either (a) the Company or such Restricted Subsidiary
would be entitled, pursuant to the provisions of (1) paragraph (j) of Section
603 or (2) paragraph (1) of Section 603, to incur indebtedness secured by a lien
on the Principal Property to be leased without equally and ratably securing the
TERMS, or (b) the Company shall, and in any such case the Company covenants that
it will, within 120 days of the effective date of any such arrangement, apply an
amount not less than the fair value (as so determined) of such Principal
Property (i) to the payment or other retirement of Funded Debt incurred or
assumed by the Company which ranks senior to or pari passu with the TERMS or of
Funded Debt incurred or assumed by any Restricted Subsidiary (other than, in
either case, Funded Debt owned by the Company or any Restricted Subsidiary), or
(ii) to the purchase at not more than the fair value (as so determined) of
Principal Property (other than the Principal Property involved in such sale).
For this purpose, "Funded Debt" means any indebtedness which by its terms
matures at or is extendable or renewable at the sole option of the obligor
thereon without requiring the consent of the obligee to a date more than 12
months after the date of the creation of such indebtedness.
Section 605. Expiration of Restrictions on Liens and Restrictions on Sale
and Leaseback Transactions. Notwithstanding anything to the contrary herein, on
the date (the "Termination Date") (and continuing thereafter) on which there
remains outstanding, in the aggregate, no more than $200,000,000 in principal
amount of NorAm Long-Term Indebtedness, the covenants of the Company set forth
in Sections 603 and 604 hereof shall terminate and the Company shall no longer
be subject to the covenants set forth in such Sections.
-19-
ARTICLE SEVEN
Miscellaneous Provisions
Section 701. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 2, is in all respects hereby adopted, ratified and
confirmed.
Section 702. This Supplemental Indenture No. 2 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 703. THIS SUPPLEMENTAL INDENTURE NO. 2 AND EACH TERMS SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND 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.
-20-
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 2 to be duly executed, as of the day and year first written above.
NORAM ENERGY CORP.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Treasurer
Attest:
/s/ Xxxxxxx Xxxxxxx
-------------------------------
Name : Xxxxxxx Xxxxxxx
Title: Assistant Secretary
(SEAL)
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Trust Officer
(SEAL)
-21-
Exhibit A
[FORM OF FACE OF SECURITY]
IF THIS SECURITY IS TO BE A GLOBAL SECURITY - 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 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.
[For as long as this Global Security is deposited with or on behalf of The
Depository Trust Company it shall bear the following legend.] Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to NorAm Energy Corp. or its agent for
registration of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
NORAM ENERGY CORP.
6 3/8% Term Enhanced ReMarketable Securities(SM)
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 November 1, 2013,
unless redeemed or repurchased or the Maturity Date is adjusted as provided
herein or in the Indenture, and to pay interest thereon at the rate, in the
manner and on the dates (each such date, an "Interest Payment Date") set forth
herein, from November 10, 1998 (the "Issue Date") or from the most recent
Interest Payment Date to which interest has been paid or duly provided for
A-1
until the principal hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name this Security (or one or more
Predecessor Securities) are registered at the close of business on the fifteenth
calendar day (whether or not a Business Day) immediately preceding such Interest
Payment Date (each such date, a "Regular Record 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 shall either (i) be paid to the Person in
whose name this Security (or one or more Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holder of this Security not less than 10 calendar days prior to such Special
Record Date, or (ii) 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 the Indenture.
Interest on this Security will be computed on the basis of a 360-day
year of twelve 30-day months, except that interest accruing during the
Remarketing Window will be computed on the basis of the actual number of days in
such period and a 360-day year.
Interest payable on any Interest Payment Date and at the Maturity Date
or date of earlier redemption or repurchase of the Securities of this series
will be the amount of interest accrued from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for (or
from and including the Issue Date if no interest has been paid or duly provided
for with respect to this Security) to, but excluding, such Interest Payment Date
or the Maturity Date or date of redemption or repurchase, as the case may be. If
any Interest Payment Date or the Maturity Date or date of earlier redemption or
repurchase of the Securities of this series falls on a day that is not a
Business Day, the payment otherwise then due will be made on the next Business
Day (and without any interest or other payment in respect of any such delay)
with the same force and effect as if it were made on the date such payment was
originally payable.
This Security is subject to mandatory tender for sale by the record
holder hereof, and the Scheduled Maturity Date of this Security, the rate at
which this Security will bear interest and the Interest Payment Date and Regular
Record Dates for such interest are subject to adjustment, in each case on or
after November 1, 2003, as described on the reverse hereof.
Payment of the principal of and any such interest on this Security
will be made at the office or agency of Houston Industries Incorporated, a Texas
corporation, maintained for that purpose at the address Houston Industries
Plaza, c/o Office of Investor Services, 0000 Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxx 00000, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire
A-2
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:
-----------------------------------
Name:
(SEAL) Title:
Attest:
_____________________
Name:
Title:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, As Trustee
Dated:________________
By:
-----------------------------------
Authorized Signatory
A-3
[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 February 1, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Chase Bank of Texas, National Association,
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, limited in aggregate principal
amount to $500,000,000; provided, however, that the authorized aggregate
principal amount of the Securities may be increased above such amount by a Board
Resolution to such effect.
This Security will bear interest at the rate of 6 3/8% per annum from
and including the Issue Date to, but excluding, November 1, 2003 (the "Initial
Investor Maturity Date"). Such interest shall be payable semiannually in arrears
on May 1 and November 1 of each year, commencing May 1, 1999 (each such date, an
"Initial Period Interest Payment Date"). Interest on this Security accruing from
the Initial Investor Maturity Date (if such date is not a Window Period
Remarketing Date) or the Additional Remarketing Date (if the Initial Investor
Maturity Date is a Window Period Remarketing Date) will be paid semiannually in
arrears on each day that is a six-month anniversary of such date (each such day,
a "Subsequent Period Interest Payment Date," and together with each Initial
Period Interest Payment Date, an "Interest Payment Date") until the principal of
this Security is paid or made available for payment. Notwithstanding the
foregoing, Interest on this Security accruing during the Remarketing Window, if
applicable, will be payable on the Additional Remarketing Date to the Persons to
whom principal is payable on the Additional Remarketing Date.
The rate at which this Security will bear interest and the Interest
Payment Dates and Regular Record Dates for such interest are subject to
adjustment, in each case on or after the Initial Investor Maturity Date,
pursuant to the provisions of the Indenture.
The ultimate maturity date of this Security shall be scheduled to be
November 1, 2013 (the "Scheduled Maturity Date") but may be adjusted due to the
occurrence, if any, of either, or both of (i) modification pursuant to the
provisions of the Indenture as a result of the occurrence of the Remarketing
Window or (ii) modification by the Company pursuant to the provisions of the
Indenture (such date, as may be adjusted in the manner described above, is
referred to herein as the "Maturity Date"). Except in the limited circumstances
described herein and in the Indenture, the Securities of this series are not
subject to redemption by the Company prior to the Maturity Date.
Either the Initial Investor Maturity Date or, if the Initial Investor
Maturity Date is designated as a Window Period Remarketing Date, the Additional
Remarketing Date thereafter, shall be the Remarketing Date for the Securities of
this series. If the Remarketing Dealer elects to
A-4
remarket the Securities of this series on the Remarketing Date, except in the
limited circumstances described in the Indenture, (i) this Security will be
subject to mandatory tender to the Remarketing Dealer at 100% of the principal
amount thereof for remarketing on the Remarketing Date, on the terms and subject
to the conditions described in the Indenture, (ii) the Company will pay accrued
and unpaid interest on this Security to, but excluding, the Remarketing Date and
(iii) on and after the Remarketing Date, this Security will bear interest at the
rate determined by the Remarketing Dealer in accordance with the procedures set
forth in the Indenture. If the Remarketing Dealer for any reason does not
purchase all of the Securities of this series on the Remarketing Date, or elects
not to remarket the Securities of this series, or in certain other limited
circumstances described in the Indenture, the Company will be required to
purchase the Securities of this series from the Holders thereof on the
Remarketing Date, at 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to but excluding the Remarketing Date.
If the Initial Investor Maturity Date is designated as a Window Period
Remarketing Date, except in the limited circumstances described in the
Indenture, the Maturity Date of this Security will be the date that is the tenth
anniversary of the Additional Remarketing Date (whether or not a Business Day),
unless modified by the Company as permitted under the Indenture.
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.
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.
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.
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.
A-5
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, 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 $1,000 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.
A-6
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.
A-7
