-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EHGiKTl330+r9E/JCnr9F3nHCIYNTlRCy7tn+TcQDfhWqTPoX6HlFiKxpxa4EKCL 5JzeyCKRRlE4bR8JVZxcwg== 0000950162-96-000423.txt : 19960814 0000950162-96-000423.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950162-96-000423 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19960813 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN PUBLIC SERVICE CAPITAL I CENTRAL INDEX KEY: 0001016160 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC, GAS & SANITARY SERVICES [4900] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-05289 FILM NUMBER: 96609871 BUSINESS ADDRESS: STREET 1: TYLER AT SIXTH CITY: AMARILLO STATE: TX ZIP: 79101 BUSINESS PHONE: 8063782121 MAIL ADDRESS: STREET 1: TYLER AT SIXTH CITY: AMARILLO STATE: TX ZIP: 79170 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000092521 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 750575400 STATE OF INCORPORATION: NM FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-05289-01 FILM NUMBER: 96609872 BUSINESS ADDRESS: STREET 1: SPS TOWER STREET 2: TYLER AT SIXTH ST CITY: AMARILLO STATE: TX ZIP: 79170 BUSINESS PHONE: 8063782121 MAIL ADDRESS: STREET 1: PO BOX 1261 CITY: AMARILLO STATE: TX ZIP: 79170 S-3/A 1 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on August 12, 1996 Registration No. 333-05289 333-05289-01 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- AMENDMENT NO. 1 To FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 -------------------------- SOUTHWESTERN PUBLIC SERVICE CAPITAL I SOUTHWESTERN PUBLIC SERVICE COMPANY (Exact name of Registrant as (Exact name of Registrant as specified in the Trust Agreement) specified in its charter) Delaware New Mexico (State or other jurisdiction of incorporation or organization) 75-6494522 75-0575400 (I.R.S. Employer Identification Number) Tyler at Sixth Amarillo, Texas 79101 (806) 378-2121 (Address, including zip code, and telephone number, including area code, of principal executive offices) Bill D. Helton Chairman of the Board and Chief Executive Officer Tyler at Sixth Amarillo, Texas 79101 (806) 378-2121 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Gary W. Wolf, Esq. Cahill Gordon & Reindel 80 Pine Street New York, New York 10005 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. 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 offer- ing 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 the Form is a post-effective amendment filed pursuant Rule 462(c) under the Securities Act, check the following box and list the Securities Act reg- istration 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. ____ /___/ CALCULATION OF REGISTRATION FEE ================================================================================ : Proposed : : maximum : Title of each : aggregate : Amount of class of securities : offering : registration to be registered : price : fee - -------------------------------------------------------------------------------- : : Southwestern Public Service : : Capital I Preferred Securities : (1)(2) : N/A : : Southwestern Public Service : : Company Surety Obligations with : : respect to Preferred Securities : (1)(2) : N/A Southwestern Public Service : : Company Deferrable Interest : : Subordinated Debentures : (1)(2) : N/A - -------------------------------------------------------------------------------- Total $100,000,000 $34,482.76(3) - -------------------------------------------------------------------------------- (1) In no event will the aggregate maximum offering price of all securities issued pursuant to this Registration Statement exceed $100,000,000. (2) Subject to Footnote (1), there are being registered hereunder a presently indeterminate number of Preferred Securities of Southwestern Public Service Capital I, together with related Surety Obligations and Deferrable Interest Subordinated Debentures of Southwestern Public Service Company for which no separate consideration will be received by any of the Registrants. The Surety Obligations with respect to the Preferred Securities are comprised of several instruments, the Guarantee, the Deferrable Interest Subordinated Debentures, the Trust Agreement, the Indenture and the Expense Agreement, all as described in the Registration Statement. (3) Pursuant to Rule 457(o), the registration fee is calculated on the basis of the proposed maximum offering price of the securities. -------------------- The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. -2- 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. Neither this prospectus supplement nor the prospectus to which it relates shall constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. SUBJECT TO COMPLETION DATED AUGUST 12, 1996 PRELIMINARY PROSPECTUS SUPPLEMENT TO PRELIMINARY PROSPECTUS DATED AUGUST 12, 1996 4,000,000 Preferred Securities Southwestern Public Service Capital I __% Trust Preferred Securities, Series A (Liquidation Amount $25 per Preferred Security) Fully and unconditionally guaranteed by SOUTHWESTERN PUBLIC SERVICE COMPANY ------------------ The ___% Trust Preferred Securities, Series A (the "Preferred Securities") offered hereby represent undivided preferred beneficial interests in Southwestern Public Service Capital I, a trust formed under the laws of the State of Delaware (the "Issuer" or the "Trust"). The preferred interests represented by the Preferred Securities will have a preference under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the trust interests represented by the Common Securities (as defined) issued by the Issuer. See "Description of Preferred Securities -- Subordination of Common Securities" in the accompanying Prospectus. Southwestern Public Service Company, a New Mexico corporation (the "Company"), will be the owner of the trust interests represented by the common securities (the "Common Securities") issued by the Issuer. The Issuer exists for the sole purpose of issuing its trust interests and investing the proceeds thereof in the % Deferrable Interest Subordinated Debentures, Series A, Due (the "Junior Subordinated Debentures") issued by the Company. Holders of the Preferred Securities will be entitled to receive cumulative cash distributions accruing from the date of original issuance and payable quarterly in arrears on , , and of each year, commencing , 199 , at the rate of % per annum. The Company has the right to defer interest payments on the Junior Subordinated Debentures by extending the interest payment period thereon at any time for up to 20 consecutive quarters (each an "Extension Period"). If interest payments are so deferred, distributions on the Preferred Securities will also be deferred. During an Extension Period, distributions, as well as interest thereon to the extent permitted by law, will continue to accrue, and holders of Preferred Securities will be required to accrue interest income for United States Federal income tax purposes. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." As more fully described herein, the Company will enter into several contractual arrangements (the "Surety Obligations") for the purpose of fully and unconditionally backing up the payment of distributions on, payments on any redemption of, and any liquidation distribution with respect to the Preferred Securities. These Surety Obligations are comprised of: (i) the guarantee by the Company (the "Guarantee") for the benefit of holders of Preferred Securities; (ii) the trust agreement pursuant to which the Trust was formed (the "Trust Agreement"); (iii) an expenses and liabilities agreement (the "Expense Agreement") provided for in the Trust Agreement pursuant to which the Company will agree to pay all of the Trust indebtedness, expenses or liabilities (other than obligations of the Trust to pay to holders of the Preferred Securities the amounts due such holders pursuant to the terms of the Preferred Securities); and (iv) the Junior Subordinated Debentures and the indenture (the "Indenture") pursuant to which they will be issued. The Guarantee is limited to a guarantee, on a subordinated basis, to the holders of Preferred Securities, of the payment of distributions, out of moneys held by the Issuer, and payments upon liquidation of the Issuer or the redemption of Preferred Securities, as set forth below. See "Certain Terms of the Guarantee." If the Company fails to make interest payments on the Junior Subordinated Debentures held by the Issuer, the Issuer will have insufficient funds to pay distributions on the Preferred Securities. The Guarantee does not cover payment of distributions when the Issuer does not have sufficient funds to pay such distributions. In such event, the remedy of a holder of Preferred Securities is to enforce the rights of the Issuer under the Junior Subordinated Debentures held by the Issuer. The Company's obligations under the Guarantee are subordinate and junior in right of payment to all other liabilities of the Company except trade credit and any liabilities that may be made pari passu with or subordinate to the Guarantee expressly by their terms ("Senior Indebtedness"). Wilmington Trust Company is the Property Trustee of the Issuer and the Guarantee Trustee of the Company. The Preferred Securities are subject to mandatory redemption upon repayment of the Junior Subordinated Debentures at maturity or their earlier redemption, in whole or in part. See "Description of Preferred Securities -- Redemption" in the accompanying Prospectus. The Company will have the option at any time on or after , , to redeem, in whole or in part, the Junior Subordinated Debentures, and will also have the right at any time, upon occurrence of a Special Event (as defined herein), to redeem, in whole but not in part, the Junior Subordinated Debentures. See "Description of Junior Subordinated Debentures -- Optional Redemption" in the accompanying Prospectus. The Junior Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness of the Company. As of May 31, 1996, the Company had approximately $771 million principal amount of Senior Indebtedness outstanding. The terms of the Junior Subordinated Debentures do not limit the Compa- ny's ability to incur additional Senior Indebtedness. See "Description of Junior Subordinated Debentures -- Subordination" in the accompanying Prospectus. In the event of the liquidation of the Issuer, the holders of the Preferred Securities will be entitled to receive for each Preferred Security a liquidation S-2 preference of $25 (the "Liquidation Amount") plus accrued and unpaid distributions thereon to the date of payment and interest thereon to the extent permitted by law, subject to certain limitations. See "Description of Preferred Securities -- Liquidation Distribution Upon Dissolution" in the accompanying Prospectus. Application will be made to have the Preferred Securities approved for listing on the New York Stock Exchange. The Preferred Securities will be represented by a global certificate registered in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial interests in the Preferred Securities will be shown on, and transfers thereof will be effected only through, records maintained by Participants (as defined herein) in DTC. Except as described herein, Preferred Securities in certificated form will not be issued in exchange for the global certificate. See "Description of Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust Company" in the accompanying Prospectus. -------------------- SEE "RISK FACTORS" BEGINNING ON PAGE S-7 HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT ON THE PREFERRED SECURITIES AND THE JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES. -------------------- 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. -------------------- S-3 - --------------------------------------------------------------- Initial Public Under- Proceeds to Offering writing the Price Commission(1) Issuer(2)(3) Per Preferred Security $25.00 (2) $ Total $100,000,000 (2) $ - -------------------------------------------------------------- - --------------- (1) The Issuer and the Company have agreed to indemnify the several Underwriters (as defined herein) against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (2) In view of the fact that the proceeds of the sale of the Preferred Securities will be used to purchase the Junior Subordinated Debentures, the Underwriting Agreement provides that the Company will pay to the Underwriters, as compen- sation for their arranging the investment therein of such proceeds, $ per Preferred Security (or $ in the aggregate); or, in the case of certain institutions, $ per Preferred Security. Accordingly, the maximum aggregate amount of underwriting commission will be $___, but the actual amount of underwriting commission will be less than such amount to the extent that Preferred Securities are sold to such institutions. (3) Expenses of the offering, which are payable by the Company, are estimated to be $ . -------------------- The Preferred Securities offered hereby are offered severally by the Underwriters, as specified herein, and subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Preferred Securities will be made only in book-entry form through the facilities of DTC on or about , 199_. -------------------- The date of this Prospectus Supplement is , 199_. ---------------------- S-4 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-5 PROSPECTUS SUMMARY The following summary information is qualified in its entirety by the detailed information and financial statements incorporated herein by reference. The Offering Securities Offered ................ % Trust Preferred Securities, Series A Distribution Payment Dates ........ , , and , commencing , 199 , subject to deferral as described herein. Redemption ........................ At the option of the Company at $25 per Preferred Security, in whole or in part, on or after , or, in whole, but not in part, upon the occurrence of a Special Event (as defined herein). Use of Proceeds ................... Proceeds from this offering will be used by the Company for the repayment of short-term debt and or general corporate purposes. S-6 RISK FACTORS PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES SHOULD CAREFULLY REVIEW THE INFORMATION CONTAINED ELSEWHERE IN THIS PRO- SPECTUS SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS AND SHOULD PARTICULARLY CONSIDER THE FOLLOWING MATTERS: Subordination of Guarantee and Junior Subordinated Debentures. The Company's obligations under the Guarantee and under the Junior Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness other than indebtedness that may be made pari passu with or subordinate to the Guarantee and the Junior Subordinated Debentures expressly by their terms. As of May 31, 1996, the Company had approximately $771 million principal amount of indebtedness for borrowed money and other obligations constituting Senior Indebtedness outstanding. There are no terms of the Preferred Securities, the Junior Subordinated Debentures or the Guarantee that limit the Company's ability to incur additional Senior Indebtedness. See "Description of Guarantee -- Status of the Guarantee" and "Description of Junior Subordinated Debentures -- Subordination." The ability of the Issuer to pay amounts due on its Preferred Securities is solely dependent upon the Company making payments on the Junior Subordinated Debentures held by such Issuer as and when required. Option to Extend Interest Payment Period; Tax Consequences. The Company has the right under the Indenture (as defined herein) to extend, from time to time, the interest payment period on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters. Upon the termination of any such extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the requirements described herein and in the accompanying Prospectus. During any such extended interest payment period, quarterly distributions on the Preferred Securities would be deferred (but would continue to accrue with additional distributions thereon to the extent permitted by law) by the Issuer. In the event that the Company exercises this right, during such period it may not declare or pay dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, S-7 or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such extended interest payment period, together with all previous and further extensions thereof, may not exceed 20 consecutive quarters and that such extended interest payment period may not extend beyond the maturity or redemption date of the Junior Subordinated Debentures. Upon the termination of any extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the foregoing requirements. If the Company should determine to exercise its extension right in the future, the market price of the Preferred Securities is likely to be affected. The Issuer and the Company believe that such an extension of an interest payment period on the Junior Subordinated Debentures is unlikely to occur. See "Certain Terms of the Preferred Securities -- Distributions" and "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period." Should an interest payment period be extended, Preferred Securities holders will continue to recognize interest income for United States Federal income tax purposes. As a result, such holders will be required to include accruing interest in gross income for United States Federal income tax purposes in advance of the actual receipt of such interest. Furthermore, such holders will not receive the related actual interest payments from the Issuer if they dispose of their Preferred Securities prior to the record date for payment of distributions. See "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." Rights Under the Guarantee. The Guarantee will be qual- ified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust Company S-8 will act as indenture trustee under the Guarantee for the purposes of compliance with the Trust Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Preferred Securities and will also be the trustee for the Junior Subordinated Debentures and the Property Trustee (as defined herein). The Guarantee is limited to a guarantee, on a subordinated basis, to the holders of the Preferred Securities, of the payment (but not the collection) of (i) any accrued and unpaid distributions required to be paid on the Preferred Securities, if and only to the extent that the Issuer has funds sufficient to make payment therefor, (ii) the Redemption Price (as defined herein) with respect to Preferred Securities called for redemption by the Issuer, if and only to the extent that the Issuer has funds sufficient to make payment therefor and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with a redemption of all of the Preferred Securities), the lesser of (a) the aggregate Liquidation Amount and all accrued and unpaid distributions on the Preferred Securities to the date of payment, to the extent the Issuer has funds sufficient to make such payment, and (b) the amount of assets of the Issuer remaining available for distribution to holders of the Preferred Securities in liquidation of the Issuer. The holders of a majority in aggregate Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. There are no preconditions to any holder of Preferred Securities instituting a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee. There is no requirement that a holder of Preferred Securities first institute a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. If the Company were to default on its obligations under the Junior Subordinated Debentures, the Issuer would lack available funds for the payment of distributions or amounts payable on redemption of the Preferred Securities or otherwise, and in such event holders of the Preferred Securities would not be able to rely upon the Guarantee for payment of such amounts. In such event, the holders of at least 25% in aggregate Liquidation Amount of the Preferred Securities then outstanding shall have the right to enforce directly the rights of the Issuer under the Junior Subordinated Debentures. See "Description of Guarantee -- Status of the Guarantee" and "Description of Junior Subordinated Debentures -- Subordination" set forth in the accompanying Prospectus. S-9 Special Event Redemption. Upon the occurrence of a Spe- cial Event (as defined herein), the Company has the right to redeem the Junior Subordinated Debentures, in whole but not in part, in which event the Issuer will redeem the Preferred Securi- ties. See "Certain Terms of the Preferred Securities -- Redemp- tion" and "-- Special Event Redemption or Distribution." Recent Tax Law Proposals. If the tax law changed, as a result of the Proposed Legislation as described under "Recent Developments" below or otherwise, so that in the Company's judgment it would be precluded from deducting interest on the Junior Subordinated Debentures, the Company could redeem the Junior Subordinated Debentures, thereby causing a mandatory redemption of the Preferred Securities. The Company presently anticipates that, as permitted by the terms of the Junior Subordinated Debentures and subject to market and other conditions, it would cause such redemption of the Preferred Securities if the tax law changed, as a result of the Proposed Legislation or otherwise, in a manner that would not permit the interest deduction. The Company also has the option of distributing Junior Subordinated Debentures or of leaving the Preferred Securities outstanding should such a tax law change occur as described under "Certain Terms of the Preferred Securities -- Special Event Redemption or Distribution." If the Preferred Securities are redeemed, holders would receive $25 per Preferred Security plus accrued and unpaid distributions to the redemption date. Gain or loss will be recognized on a redemption for cash of Preferred Securities in an amount equal to the difference between the amount realized and the tax basis of a holder of the Preferred Securities in his or her Preferred Securities. Gain or loss recognized by a holder of Preferred Securities on the redemption of Preferred Securities held for more than one year generally will be taxable as long-term capital gain or loss. In addition, the holder would have the ability to reinvest the proceeds received in an alternate investment; however, there can be no assurance that the rate of return on any alternative investment would be as favorable to a holder as an investment in the Preferred Securities. If the Company chose to distribute the Junior Subordinated Debentures to the holders of the Preferred Securities, under current United States Federal income tax law and interpretations, if the Trust is treated as a grantor trust at the time of the distribution, such a distribution should not be treated as a taxable event to holders of the Preferred Securities. Such a tax-free transaction would result in a holder of Preferred Securities retaining an aggregate tax basis in the Junior Subordinated Debentures equal to such holder's aggregate tax basis in the holder's pro rata share of the Junior Subordinated Debentures prior to the distribution. A holder's holding period for such Junior Subordinated Debentures would include the period for which the Preferred Securities were held by such holder. If the Trust S-10 were not treated as a grantor trust at the time of the distribution, the distribution could be a taxable event to holders of the Preferred Securities, in which case the principles discussed above with respect to a redemption of Preferred Securities would apply, and the holders would have a new tax basis and holding period in the Junior Subordinated Debentures. Limited Voting Rights. Holders of Preferred Securities will have limited voting rights, and, except upon the occurrence of an Event of Default (as defined herein) under the Trust Agreement, will not be entitled to vote to appoint, remove or replace the Property Trustee or the Administrative Trustees (as defined herein) or to increase or decrease the number of the Administrative Trustees. Such voting rights are vested exclusively in the Depositor, unless and until an Event of Default has occurred and is continuing. See "Description of Preferred Securities -- Events of Default; Notice" in the accompanying Prospectus. Trading Characteristics of Preferred Securities. Application will be made to have the Preferred Securities approved for listing on the New York Stock Exchange. If approved for listing, the Preferred Securities are expected to trade at a price that takes into account the value, if any, of accrued and unpaid distributions; thus, purchasers will not pay and sellers will not receive any accrued and unpaid interest with respect to their undivided interests in Junior Subordinated Debentures owned through the Preferred Securities that is not included in the trading price of the Preferred Securities. However, interest on the Junior Subordinated Debentures will be included in the gross income of U.S. Holders (as defined herein) of Preferred Securities as it accrues, rather than when it is paid. See "United States Taxation -- Income from Preferred Securities" and "-- Disposition of Preferred Securities." Because the Preferred Securities pay a dividend at a fixed rate based upon the fixed interest rate payable on the Junior Subordinated Debentures, the trading price of the Preferred Securities may decline if interest rates rise. SOUTHWESTERN PUBLIC SERVICE CAPITAL I General Southwestern Public Service Capital I is a statutory business trust formed under the Delaware Business Trust Act pursuant to (i) a Trust Agreement executed by David M. Wilks, President and Chief Operating Officer of the Company, as depositor of the Issuer, and the Property Trustee and (ii) the filing of a S-11 Certificate of Trust with the Delaware Secretary of State on June 5, 1996. Such Trust Agreement will be amended and restated in its entirety (as so amended and restated, the "Trust Agreement") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus Supplement is a part. The Trust Agreement will be qualified as an indenture under the Trust Indenture Act. The Issuer exists for the exclusive purposes of (i) issuing the Preferred Securities and the Common Securities representing trust interests in the Issuer, (ii) purchasing the Junior Subordinated Debentures with the Common Securities and the proceeds from the sale of the Preferred Securities and (iii) engaging only in those other activities necessary or incidental thereto. All of the Common Securities will be owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities, except that upon the occurrence and continuance of an Event of Default under the Trust Agreement, the rights of the holders of the Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinate and junior to the rights of the holders of the Preferred Securities. The Company will acquire Common Securities having an aggregate Liquidation Amount equal to 3% of the total capital of the Issuer. The Issuer will terminate on , _____ unless earlier terminated as provided in the Trust Agreement. The Issuer's business and affairs will be conducted by the Property Trustee and the Administrative Trustees. The holder of the Common Securities, or if an Event of Default has occurred and is continuing, the holders of at least a majority in the aggregate Liquidation Amount of the then outstanding Preferred Securities, will be entitled to appoint, remove or replace the Trustees (as defined herein) of the Issuer. The duties and obligations of the Trustees shall be governed by the Trust Agreement. David M. Wilks, Robert D. Dickerson and James D. Steinhilper, all employees of the Company, will be appointed as Administrative Trustees pursuant to the terms of the Trust Agreement. Under the Trust Agreement, the Administrative Trustees will have certain duties and powers including, but not limited to, the delivery of certain notices to the holders of the Preferred Securities, the appointment of the Paying Agent (as defined in the accompanying Prospectus) and the Registrar (as defined in the accompanying Prospectus) and the registering of transfers of the Preferred Securities. Under the Trust Agreement, Wilmington Trust Company, as the Property Trustee, will have certain duties and powers including, but not limited to, holding legal title to the Junior Subordinated Debentures on behalf of the Trust, the collection of payments in respect of the Junior Subordinated Debentures, maintenance of the Payment Account (as defined in the Trust Agreement), the sending of default notices with S-12 respect to the Preferred Securities and the distribution of the assets of the Trust in the event of a winding up of the Trust. See "Description of Preferred Securities" in the accompanying Prospectus. The Company has agreed to pay all fees and expenses related to the Issuer and the offering of the Preferred Securities pursuant to the Expense Agreement. Accounting Treatment The Trust is a special purpose entity which is effectively controlled by the Company. The financial position, operating results and cash flows of this special purpose entity will be consolidated with the Company. The Junior Subordinated Debentures issued by the Company to the Trust and all other intercompany transactions will be eliminated in consolidation. The Preferred Securities issued by the Trust will be reflected as a separate line item titled "Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust holding solely Subordinated Debt Securities" in the Company's Consolidated Statement of Capitalization. In addition, the Company will include, in a footnote to its financial statements, disclosure that the sole asset of the Trust is Junior Subordinated Debentures, stating the principal amount, interest rate and maturity date of such Junior Subordinated Debentures and include, in an audited footnote to the financial statements, disclosure that (a) the Trust is wholly owned, (b) the sole asset of the Trust is Junior Subordinated Debentures, stating the principal amount, the interest rate and maturity date of such Subordinated Debentures and (c) considered together, the Surety Obligations constitute a full and unconditional guarantee by the Company of the Trust's obligations under the Preferred Securities. RECENT DEVELOPMENTS On March 19, 1996, President Clinton proposed certain tax law changes that would, among other things, generally deny corporate issuers a deduction for interest in respect of certain debt obligations issued on or after December 7, 1995 (the "Proposed Legislation") if such debt obligations have a maximum term of in excess of 20 years and are not shown as indebtedness on the issuer's applicable consolidated balance sheet. In addition, the Proposed Legislation would deny issuers an interest deduction on any debt instrument with a weighted average maturity of more than 40 years. On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint statement (the "Joint Statement") S-13 indicating their intent that certain legislative proposals initiated by the Clinton administration, including the Proposed Legislation, that may be adopted by either of the tax-writing committees of Congress would have an effective date that is no earlier than the date of "appropriate Congressional action." There can be no assurances, however, that the effective date guidance contained in the Joint Statement will be incorporated into the Proposed Legislation, if enacted, or that other legislation enacted after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Junior Subordinated Debentures. If the tax law changed, as a result of the Proposed Legislation or otherwise, so that in the Company's judgment it would be precluded from deducting interest on the Junior Subordinated Debentures, the Company could, subject to receiving an Opinion of Counsel to the effect that a relevant tax law change (as described in the accompanying Prospectus) had occurred, redeem the Junior Subordinated Debentures in whole, thereby causing a mandatory redemption of the Preferred Securities in whole at a price of $25 per Preferred Security, plus accrued but unpaid distributions. The Company presently anticipates that, as permitted by the terms of the Junior Subordinated Debentures and subject to market and other conditions, it would cause such redemption of the Preferred Securities if the tax law changed, as a result of the Proposed Legislation or otherwise, in a manner that would not permit the interest deduction. The Company also has the option, subject to receiving an Opinion of Counsel, of distributing Junior Subordinated Debentures or the option of leaving the Preferred Securities outstanding should such a tax law change occur as described under "Certain Terms of the Preferred Securities -- Special Event Redemption or Distribution." USE OF PROCEEDS The Issuer will use the proceeds from this offering of $100,000,000 million, together with the Common Securities, to purchase the Junior Subordinated Debentures. The Company will use the cash proceeds from the sale of the Junior Subordinated Debentures, net of the Underwriters' compensation and the other expenses of this offering, for the repayment of short-term debt and for general corporate purposes. As of ____________, 1996, approximately $_______ of such short-term indebtedness was outstanding and it had a weighted average interest rate of approximately _____% per annum and maturities within __________ of its date of issuance. S-14 CERTAIN TERMS OF THE PREFERRED SECURITIES General The following summary description of certain terms and provisions of the Preferred Securities sets forth certain portions of the description of the terms and provisions of the Preferred Securities included in the accompanying Prospectus under the heading "Description of Preferred Securities," to which description reference is hereby made. This summary of certain terms and provisions of the Preferred Securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Trust Agreement. The form of the Trust Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus are a part. See "Description of Preferred Securities" in the accompanying Prospectus. Distributions The Preferred Securities represent undivided preferred beneficial interests in the assets of the Issuer, and the distributions on each Preferred Security are payable at the rate set forth on the cover page of this Prospectus Supplement, payable, except in the event of an extension, quarterly in arrears on , , and of each year, commencing ____________. Distributions in arrears after the payment date therefor will accumulate additional distributions thereon (to the extent permitted by law) compounded quarterly at the rate per annum set forth on the cover page of this Prospectus Supplement. The term "distributions" as used herein shall include any such additional distributions to the extent permitted by law. Distributions will accrue from the date of original issuance of the Preferred Securities. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and, for any period shorter than a full monthly period, shall be computed on the basis of the actual number of days elapsed in such period. So long as an Event of Default under the Indenture has not occurred and is continuing, the Company has the right at any time and from time to time to extend the interest payment period on the Junior Subordinated Debentures for not more than 20 consecutive quarters, provided that any such Extension Period shall not extend beyond the maturity date or redemption date of the Junior Subordinated Debentures. During any Extension Period quarterly distributions on the Preferred Securities would be deferred by the Issuer, would continue to accrue, and holders of Preferred Securities would be required to accrue interest income for United S-15 States Federal income tax purposes. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." In the event that the Company exercises this right, during such period it may not declare or pay any dividends or distributions (other than dividends or distributions payable in common stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant effectively requires that an interest payment on the Junior Subordinated Debentures may be extended only if the interest periods on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters or extend beyond the maturity or redemption date of the Junior Subordinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the above requirements. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." S-16 The Company has no current intention of exercising its right to defer payments of distributions on the Preferred Securities by extending the interest payment period on the Junior Subordinated Debentures. Redemption Upon the payment of the Junior Subordinated Debentures, whether at maturity or upon earlier redemption as provided in the Indenture, the proceeds from such payment will be applied by the Property Trustee to redeem a Like Amount (as defined below) of the Common Securities and the Preferred Securities, upon not less than 30 nor more than 90 days' notice, at a redemption price equal to the aggregate Liquidation Amount plus accumulated and unpaid distributions, plus additional distributions thereon to the extent permitted by law, to the redemption date. See "Certain Terms of Junior Subordinated Debentures -- Redemption." The Company has the right to redeem the Junior Subordinated Debentures (a) on or after _____________, _____, in whole or in part, or (b) at any time, in whole but not in part, upon the occurrence of a Tax Event or an Investment Company Event (each as defined below, a "Special Event"), subject to the conditions described under "-- Special Event Redemption or Distribution," below. Special Event Redemption or Distribution If a Special Event shall occur and be continuing with respect to the Issuer or the Preferred Securities, the Company has the right to (i) redeem the Junior Subordinated Debentures in whole (but not in part) and thereby cause a mandatory redemption of the Preferred Securities in whole (but not in part) at the redemption price within 90 days following the occurrence of such Special Event, or (ii) terminate the Issuer and cause the Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for Untied States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of the Issuer. If at any time the Issuer is not or will not be taxed as a grantor trust, but a Tax Event has not occurred, the Company has the right to terminate the Issuer and cause the Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of the Issuer. S-17 Under current United States Federal income tax law and interpretations, if the Issuer is treated as a grantor trust at the time of the distribution, such a distribution should not be a taxable event to holders of the Preferred Securities. Should there be a change in law, a change in legal interpretation, a Special Event or other circumstances, however, the termination could be a taxable event to holders of the Preferred Securities. See "United States Taxation -- Receipt of Junior Subordinated Debentures Upon Liquidation of the Issuer." If the Company does not elect either option (i) or (ii) above, the Preferred Securities will remain outstanding. "Tax Event" means the receipt by the Issuer or the Company, as the case may be, of an Opinion of Counsel (which may be counsel to the Issuer, the Company or an affiliate, and which must be reasonably acceptable to the Property Trustee) experienced in such matters to the effect that a relevant tax law change has occurred after ___________, 1996. For purposes of the preceding sentence a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the publication of any judicial opinion interpreting such laws (and regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or regulations) (including official and unofficial opinions purporting to apply such laws and regulations to other persons who have issued securities similar to the Junior Subordinated Debentures), which amendment, change, proposed amendment or change, opinion or interpretation could, if valid and enacted or applied to the Issuer or the Company, result in (i) the Issuer, either currently or within 90 days of the date thereof, becoming subject to United States Federal income tax with respect to interest received on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States Federal income tax purposes or (iii) the Issuer, either currently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Investment Company Event" means the occurrence of a change in law or regulation or a change in the interpretation or application of any law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will be considered an "investment company" that is required to be registered S-18 under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective after ______________, 1996. "Like Amount" means (i) with respect to a redemption of the Preferred Securities and the Common Securities (together, the "Trust Securities"), Trust Securities having an aggregate Liquidation Amount equal to the principal amount of Junior Subordinated Debentures to be contemporaneously redeemed in accordance with the Indenture and the proceeds of which will be used to pay the redemption price of such Trust Securities and (ii) with respect to a distribution of Junior Subordinated Debentures to holders of Trust Securities in connection with a termination or liquidation of the Issuer upon the bankruptcy, dissolution or liquidation of a holder of Common Securities, the occurrence of a Special Event or in the event that the Issuer is not or will not be taxed as a grantor trust but a Tax Event has not occurred, Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the Trust Securities in exchange for which such Junior Subordinated Debentures are distributed. Rights Under the Guarantee and the Junior Subordinated Debentures The Guarantee will be a full guarantee with respect to the Preferred Securities from the time of issuance of the Preferred Securities, but will not apply to any payments of distributions or other amounts due to the extent the Issuer does not have sufficient available funds to pay such distributions or other amounts due (which would occur in the event that the Company has failed to make a payment of principal or interest on the Junior Subordinated Debentures). There are no preconditions to a holder of Preferred Securities instituting a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee. If the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. To the extent the Company was to default on its obligation to pay amounts payable on the Junior Subordinated Debentures, the Issuer would lack sufficient available funds for the payment of distributions on or amounts payable on redemption of the Trust Securities and, in such event, holders of the Preferred Securities would not be able to rely on the Guarantee for payment of such amounts. Instead, the remedy of a holder of Preferred Securities would be to enforce the rights of the Issuer under the Junior Subordinated Debentures held by such Issuer. The above mechanisms and obligations relating to the Guarantee and the Junior Subordinated Debentures and the obligations of the Company under the other Surety Obligations, taken together, constitute a S-19 full and unconditional guarantee by the Company of payments due on the Preferred Securities. See "Certain Terms of the Guarantee" and "Certain Terms of the Junior Subordinated Debentures." CERTAIN TERMS OF THE GUARANTEE General The following summary description of the Guarantee sets forth certain portions of the description of the terms and provisions of the Guarantee included in the accompanying Prospectus under the heading, "Description of Guarantee," to which description reference is hereby made. This summary of certain terms and provisions of the Guarantee does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Guarantee. The form of Guarantee has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus are a part. The Company will fully guarantee, on a subordinated basis, the obligations of the Issuer with respect to the Preferred Securities; provided that the Guarantee will not apply to any payment of distributions if and to the extent that the Issuer does not have funds sufficient to make such payments. If the Company does not make interest payments on the Junior Subordinated Debentures held by the Issuer, it is expected that the Issuer will not pay distributions on the Preferred Securities. The Guarantee will rank subordinate and junior in right of payment to all liabilities of the Company (except trade credit and any liabilities that may be made pari passu with or subordinate to the Guarantee expressly by their terms). See "Description of the Guarantee -- Status of the Guarantee" in the accompanying Prospectus. Events of Default An event of default under the Guarantee will occur upon the failure of the Company to perform any of its payment obligations thereunder. If the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. The Guarantee is a guarantee of payment, not of collection. S-20 Termination of the Guarantee The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of all Preferred Securities, the distribution of Junior Subordinated Debentures to holders of Preferred Securities in exchange for all of the Preferred Securities or upon payment in full of the amounts payable upon liquidation of the Issuer. CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES General The following summary description of the Junior Subordinated Debentures sets forth certain portions of the description of the terms and provisions of the Junior Subordinated Debentures included in the accompanying Prospectus under the heading "Description of Junior Subordinated Debentures," to which description reference is hereby made. This summary of certain terms and provisions of the Junior Subordinated Debentures does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Indenture, including the Supplemental Indenture. The forms of Indenture and Supplemental Indenture have been filed as exhibits to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus are a part. Concurrently with the issuance of the Preferred Securities, the Issuer will invest the proceeds thereof, together with the Common Securities, in the Junior Subordinated Debentures issued by the Company to the Issuer. The Junior Subordinated Debentures will bear interest at the annual rate of %, payable quarterly in arrears, except in the event of an extension, on , , , and of each year, commencing _______. Interest which is accrued and unpaid after the quarterly payment date therefor will bear additional interest on the amount thereof (to the extent permitted by law) at the rate per annum of %, compounded quarterly. The term "Interest" as used herein shall include quarterly interest payments, interest on quarterly interest payments in arrears and Additional Interest (as defined below), as applicable. The Junior Subordinated Debentures will be issued under the Indenture and the Supplemental Indenture. The Junior Subordinated Debentures will mature on , 20 . The Junior Subordinated Debentures will be unsecured and will rank junior and be subordinate in right of payment to all Senior Indebtedness of the Company. See "Description of Junior Subordinated Debentures -- Subordination" in the accompanying Prospectus. S-21 Option to Extend Interest Payment Period The Company has the right at any time and from time to time, so long as an Event of Default under the Indenture has not occurred and is continuing, to extend the interest payment period for the Junior Subordinated Debentures for up to 20 consecutive quarters; provided that no Extension Period shall extend beyond the stated maturity date or date of redemption of the Junior Subordinated Debentures. At the end of the Extension Period, the Company is obligated to pay all interest then accrued and unpaid (together with interest thereon to the extent permitted by law). During any Extension Period, the Company will not declare or pay any dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities, including other indebtedness, such as notes or debentures, ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment (other than pro rata payments under the Guarantee and other than payments upon redemptions of capital stock pursuant to any mandatory or optional sinking fund provisions) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant requires that an interest payment on the Junior Subordinated Debentures may be extended only if the interest payments on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any Extension Period, the Company may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity or redemption date of the Junior Subordinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, S-22 the Company may select a new Extension Period subject to the above requirements. So long as the Property Trustee shall be the sole holder of the Junior Subordinated Debentures, the Company is required to give the Property Trustee and the Debenture Trustee notice of its selection of such Extension Period at least one Business Day prior to the date the Property Trustee or the Company is required to give notice to any national securities exchange on which any of the Preferred Securities are listed or to other applicable self-regulatory organization or to holders of the Preferred Securities on the record date, but in any event not less than one Business Day prior to such record date. The Debenture Trustee will be required to give notice of the Company's selection of such Extension Period to the holders of the Preferred Securities and the Administrative Trustees. Redemption The Junior Subordinated Debentures are redeemable prior to maturity at the option of the Company (i) at any time on or after the date set forth on the cover page of this Prospectus Supplement, in whole or in part, and (ii) if a Special Event occurs and is continuing, in whole, but not in part, in each case at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the redemption date. The Junior Subordinated Debentures will be subject to optional redemption in whole, but not in part, upon the termination and liquidation of the Issuer pursuant to an order for the dissolution, termination or liquidation of the Issuer entered by a court of competent jurisdiction. For so long as the Trust is the holder of all Junior Subordinated Debentures outstanding, the proceeds of any redemption described in this section shall be used by the Issuer to redeem the Preferred Securities and the Series A Common Securities in accordance with their terms. The Company shall not redeem the Junior Subordinated Debentures in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Junior Subordinated Debentures outstanding for all quarterly interest periods on or prior to the Redemption Date. UNITED STATES TAXATION General The following is a summary of certain United States Federal income tax considerations that may be relevant to prospective S-23 purchasers of Preferred Securities and represents the opinion of Cahill Gordon & Reindel, counsel to the Company, insofar as it relates to matters of law and legal conclusions. This section is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations thereunder and current administrative rulings and court decisions, all of which are subject to change. Subsequent changes may cause tax consequences to investors to vary substantially from the consequences described below. Unless otherwise stated, this summary deals only with Preferred Securities held as capital assets and not with special classes of holders, such as dealers in securities or currencies, life insurance companies, persons holding Preferred Securities as a hedge against or which are hedged against currency risks or as a part of a straddle, or persons whose functional currency is not the United States dollar. POTENTIAL INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS. While the Company believes, based upon the advice of its counsel, that the Junior Subordinated Debentures will be treated as indebtedness for United States Federal income tax purposes, holders of Preferred Securities should note that the Internal Revenue Service (the "IRS") may attempt to treat the Junior Subordinated Debentures as equity rather than indebtedness for tax purposes. If the IRS were successful in such attempt, the Junior Subordinated Debentures would be subject to redemption at the option of the Company as described under "Description of Preferred Securities -- Redemption." Income from Preferred Securities In connection with the issuance of the Preferred Securities, Cahill Gordon & Reindel will render its opinion generally to the effect that under then current law, and assuming full compliance with the terms of the Trust Agreement and the Indenture (and certain other documents), the Issuer will be classified for United States Federal income tax purposes as a grantor trust and not as an association taxable as a corporation. As a consequence, each holder of Preferred Securities will be considered the owner of a pro rata portion of the Junior Subordinated Debentures held by the Issuer. As a further consequence, each holder of Preferred Securities will be required to include in gross income his or her pro rata share of the income accrued on the Junior Subordinated Debentures held by the Issuer. S-24 Such income should not exceed distributions received by the holders of Preferred Securities on the Preferred Securities except in the case of an extension of the interest payment period as described under "Description of Preferred Securities - -- Distributions." No portion of such income will be eligible for the dividends-received deduction. Potential Extension of Interest Payment Period and Original Issue Discount Under the Indenture, the Company has the option to extend from time to time the interest payment period on the Junior Subordinated Debentures to a period not exceeding 20 consecutive quarters but not beyond the maturity date or redemption date of the Junior Subordinated Debentures. The Company's option to extend the interest payment period (even if not exercised) will cause the Junior Subordinated Debentures, from the date of issuance, to be treated as issued with "original issue discount" for United States Federal income tax purposes. Accordingly, a holder of Preferred Securities will accrue interest income (i.e., original issue discount) under a constant yield basis over the term of the Junior Subordinated Debentures (including any Extension Period), regardless of the receipt of cash with respect to the period to which such income is attributable. Holders of Preferred Securities during an Extension Period will include interest in gross income in advance of the receipt of cash, and any holders of Preferred Securities who dispose of Preferred Securities prior to the record date for the payment of distributions will include such interest in gross income, but will not receive any cash related thereto from the Issuer. The tax basis of a Preferred Security will be increased by the amount of any original issue discount that is included in income without the receipt of cash, and will be decreased when and if such cash is subsequently received by the holder of the Preferred Security. Disposition of Preferred Securities Gain or loss will be recognized on a sale, including a redemption for cash, of Preferred Securities in an amount equal to the difference between the amount realized and the tax basis of a holder of the Preferred Securities in his or her Preferred Securities. Gain or loss recognized by a holder of Preferred Securities on the sale or exchange of Preferred Securities held for more than one year generally will be taxable as long-term capital gain or loss. S-25 United States Alien Holders For purposes of this discussion, a "United States Alien Holder" is any holder or beneficial owner who or which is (i) a nonresident alien individual or (ii) a foreign corporation, foreign partnership, foreign estate or foreign trust, in any such case not subject to United States Federal income tax on a net income basis in respect of the Preferred Securities. Under present United States Federal income tax law, subject to the discussion below with respect to backup withholding: (i) Payments by the Issuer or any of its Paying Agents to any United States Alien Holder will not be subject to United States withholding tax provided that (a) the beneficial owner of the Preferred Securities does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company, (b) the beneficial owner of the Preferred Securities is not a "controlled foreign corporation" for United States tax purposes that is related to the Company through stock ownership, and (c) either (1) the beneficial owner of the Preferred Securities certifies to the Issuer or its agent, under penalties of perjury, that it is a United States Alien Holder and provides its name and address or (2) the holder of the Preferred Securities is a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution"), and such statement has been received from the beneficial owner by such financial institution or by a financial institution intermediary between it and the beneficial owner, and such financial institution furnishes the Issuer with a copy thereof; and (ii) a United States Alien Holder of the Preferred Securities will not be subject to United States Federal income or withholding tax on any gain realized on the sale or exchange of the Preferred Securities unless (a) such person is present in the United States for 183 days or more in the taxable year of sale and (b) such person has a "tax home" in the United States or certain other requirements are met. Backup Withholding and Information Reporting In general, information requirements will apply to payments to noncorporate United States holders of the proceeds of the sale of the Preferred Securities within the United States, and "backup withholding" at a rate of 31% will apply to such payments S-26 if the seller fails to provide a correct taxpayer identification number. Payments of the proceeds from the sale by a United States Alien Holder of Preferred Securities made to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a "controlled foreign corporation" for United States tax purposes or a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payments. Payments of the proceeds from the sale of Preferred Securities to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. The IRS has issued proposed regulations which, if enacted in their current form, would require backup withholding on payments with respect to the Junior Subordinated Debentures that are made outside the United States if the payor has actual knowledge that the recipient is a United States Holder. The proposed regulations are proposed to be effective for payments made after December 31, 1997, and current law would remain in effect until then. United States Holders should consult with their tax advisors as to compliance with the new rules so as to avoid possible backup withholding on payments after 1997. Receipt of Junior Subordinated Debentures upon Liquidation of the Issuer Under certain circumstances as described in "Description of Preferred Securities -- Special Event Redemption or Distribution," the Company may cause the Issuer to be terminated and the Junior Subordinated Debentures to be distributed to the holders of Preferred Securities in liquidation of such holders' interests in the Issuer. Under current United States Federal income tax law and interpretations, if the Trust is treated as a grantor trust at the time of the distribution, such a distribution should not be treated as a taxable event to holders of the Preferred Securities. Such a tax-free transaction would result in a holder of Preferred Securities retaining an aggregate tax basis in the Junior Subordinated Debentures equal to such holder's aggregate tax basis in the holder's pro rata share of the Junior Subordinated Debentures prior to the distribution. A holder's holding period for such Junior Subordinated Debentures would include the period for which the Preferred Securities were held by such holder. S-27 If the Trust were not treated as a grantor trust at the time of the distribution, the distribution could be a taxable event to holders of the Preferred Securities, in which case the principles discussed above under "-- Disposition of the Preferred Securities" would apply, and the holders would have a new tax basis and holding period in the Junior Subordinated Debentures. UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, the Company and the Issuer have agreed that the Issuer will issue and sell to each of the underwriters named below (collectively, the "Underwriters") and the Underwriters have severally agreed to purchase from the Issuer, the respective number of Preferred Securities set forth opposite its name below: Number of Preferred Underwriter Securities ----------- ---------- _________ Total ...................... 4,000,000 ========= Subject to the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all the Preferred Securities offered hereby, if any are taken. The Underwriters propose to offer the Preferred Securities in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $ per Preferred Security. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per Preferred Security to certain brokers and dealers. After the Preferred Securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives of the Underwriters. S-28 In view of the fact that the proceeds from the sale of the Preferred Securities (together with the delivery by the Issuer to the Company of the Common Securities) will be used to purchase the Junior Subordinated Debentures issued by the Company, the Underwriting Agreement provides that the Company will pay as Underwriters' compensation for the Underwriters arranging the investment therein of such proceeds, an amount of $ per Preferred Security or ($ per Preferred Security sold to certain institutions) for the accounts of the several Underwriters. The Company and the Issuer have agreed, during the period beginning from the date of the Underwriting Agreement and continuing to and including the earlier of (i) the date on which the distribution of the Preferred Securities ceases, as determined by the Underwriters, or (ii) 30 days after the issuance of the Preferred Securities, not to offer, sell, contract to sell or otherwise dispose of any Preferred Securities, any other interests of the Issuer or any other issuer of a series of Preferred Securities or the Company which are substantially similar to the Preferred Securities (including any Guarantee of such securities) or any securities convertible into or exchangeable for Preferred Securities, preferred stock or such substantially similar securities of the Issuer or the Company, without the prior written consent of the representatives of the Underwriters. Prior to this offering, there has been no market for the Preferred Securities. Application will be made to have the Preferred Securities approved for listing on the New York Stock Exchange. In order to meet one of the requirements for listing the Preferred Securities on the New York Stock Exchange, the Underwriters will undertake to sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial holders. If approved for listing, trading of the Preferred Securities on the New York Stock Exchange is expected to commence within a fourteen-day period after the initial delivery of the Preferred Securities. The representatives have advised the Company that they intend to make a market in the Preferred Securities prior to the commencement of trading on the New York Stock Exchange, but are not obligated to do so and may discontinue any such market-making at any time without notice. The Company and the Issuer have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to make contributions in respect thereof. Certain of the Underwriters engage in transactions with, and from time to time have performed services for, the Company in the ordinary course of business. S-29 SUBJECT TO COMPLETION, DATED AUGUST 12, 1996 PROSPECTUS $100,000,000 SOUTHWESTERN PUBLIC SERVICE CAPITAL I TRUST PREFERRED SECURITIES Fully and Unconditionally Guaranteed by SOUTHWESTERN PUBLIC SERVICE COMPANY -------------------- Southwestern Public Service Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Issuer"), may offer, from time to time, its preferred securities (the "Preferred Securities") representing preferred undivided beneficial interests in the assets of the Issuer. Southwestern Public Service Company, a New Mexico corporation (the "Company"), will be the sole owner of the beneficial interests represented by common securities (the "Common Securities") of the Issuer. The payment of periodic cash distributions with respect to the Preferred Securities and payments on liquidation or redemption with respect to such Preferred Securities are each guaranteed by the Company pursuant to several contractual arrangements of the Company (the "Surety Obligations") as more fully described herein. The Company's obligations under its guarantee (the "Guarantee") for the benefit of holders of Preferred Securities will be subordinate and junior in right of payment to all Senior Indebtedness of the Company. Concurrently with the issuance by the Issuer of its Preferred Securities, such Issuer will invest the proceeds thereof and any contributions made in respect of the Common Securities in a corresponding series of the Company's junior subordinated deferrable interest debentures (the "Junior Subordinated Debentures") having terms corresponding to the Issuer's Preferred Securities. The Junior Subordinated Debentures will be unsecured and subordinate and junior in right of payment to the Senior Indebtedness of the Company. The Junior Subordinated Debentures held by the Issuer will be its sole asset and payments of principal and interest under such Junior Subordinated Debentures will be its only revenue. Upon the occurrence of certain events, the Company may redeem the Junior Subordinated Debentures or may terminate the Issuer and cause the Junior Subordinated Debentures to be distributed to the holders of the corresponding Preferred Securities in liquidation of their interest in such Issuer. The Preferred Securities may be offered in amounts, at prices and on terms to be determined at the time of offering; provided, that the aggregate initial public offering price of all Preferred Securities shall not exceed $100,000,000. Specific terms of the Preferred Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement with respect to such series, including, without limitation and where applicable, the specific title, aggregate amount, dividend rate or rates (or method of determining such rate or rates), the initial public offering price and any other rights, preferences, privileges, limitations and restrictions. The Prospectus Supplement relating to the Preferred Securities will contain information concerning certain United States Federal income tax considerations, if applicable to the Preferred Securities. The Preferred Securities may be sold to or through underwriters or dealers as designated from time to time. The names of such dealers or under- writers and any applicable commissions or discounts will be set forth in the Prospectus Supplement with respect to such Preferred Securities. See "Plan of Distribution." -------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------- The date of this Prospectus is _______, 1996. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. -2- AVAILABLE INFORMATION Southwestern Public Service Company (the "Company") is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission") which may be inspected and copied at the offices of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, New York 10048, and copies of such material can be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates. (The Commission maintains a site on the World Wide Web containing reports, proxy materials, information statements and other items. The address is http://www.sec.gov.) Certain securities of the Company are listed on the New York, Chicago and Pacific Stock Exchanges. Reports, proxy and information statements, and other information concerning the Company can be inspected at such exchanges. The Company and the Issuer have filed with the Commission a registration statement on Form S-3 (herein, together with all amendments and exhibits thereto, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. No separate financial statements of the Issuer are included herein. The Company considers that such financial statements would not be material to holders of the Preferred Securities because: (i) all of the Common Securities of the Issuer will be owned by the Company, a reporting company under the Exchange Act; (ii) the Issuer has no independent operations, but exists for the sole purpose of issuing the Preferred Securities and investing the proceeds thereof (plus the Common Securities) in the Junior Subordinated Debentures; and (iii) the obligations of the Issuer under the Preferred Securities are fully and unconditionally guaranteed by the Company. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission (File No. 1-3789) pursuant to the the Exchange Act are incorporated herein by reference as of their respective dates of filing and shall be deemed to be a part hereof: -3- 1. The Company's Annual Report on Form 10-K for the year ended August 31, 1995 (the "1995 Form 10-K"). 2. The Company's Quarterly Report on Form 10-Q for the quarters ended November 30, 1995 (the "November Quarterly Report"), February 29, 1996 (the "February Quarterly Report") and May 31, 1996 (the "May Quarterly Report"). 3. The Company's Current Reports on Form 8-K filed February 2, 1996, February 26, 1996 and July 1, 1996. 4. Joint Proxy Statement/Prospectus for the Annual Meeting held January 31, 1996 included in the Registration State- ment on Form S-4 of New Century Energies, Inc. (Registration No. 33-64951). All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of this offering shall also be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the request of any such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this Prospectus (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to Secretary, Southwestern Public Service Company, Tyler at Sixth, Amarillo, Texas 79101. THE COMPANY The Company, incorporated under the laws of the State of New Mexico in 1921, is principally engaged in the generation, transmission, distribution and sale of electric energy in portions of Texas, New Mexico, Oklahoma and Kansas. The electric properties comprise an interconnected system. A major portion of the Company's electric operating revenues is derived from operations in Texas. The Company has two wholly owned non-utility subsidiaries, Utility Engineering Corporation and Quixx Corporation. The principal executive offices of the Company are located at Tyler at Sixth, Amarillo, Texas 79101 (Tel: 806-378-2121). -4- At the annual meeting of the Company's shareholders held on January 31, 1996, the shareholders approved the proposed "merger of equals" of the Company and Public Service Company of Colorado ("PSCo") (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, upon satisfaction or waiver of the terms and conditions thereof, the Company and PSCo will become wholly owned subsidiaries of a new holding company called New Century Energies, Inc. The Company and PSCo will maintain their separate identities and continue to serve customers in their respective service areas. The Company's obligations, such as guarantees, debt and any preferred stock (including the Guarantee and the Junior Subordinated Debentures) of the Company outstanding at the time of effectiveness of the merger will remain outstanding obligations, debt and preferred stock of the Company and the terms and conditions thereof will not change. The transaction is subject to various conditions including the receipt of approvals from various state and federal regulators. THE ISSUER Southwestern Public Service Capital I is a statutory business trust formed under Delaware law pursuant to (i) a trust agreement executed by David M. Wilks, President and Chief Operating Officer of the Company (together with his successors, the "Depositor"), as the depositor of the Issuer, and the Issuer Trustees (as defined herein) and (ii) the filing of a certificate of trust with the Delaware Secretary of State. Such trust agreement will be amended and restated in its entirety (as so amended and restated, the "Trust Agreement") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus is a part. The Trust Agreement will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Issuer exists for the exclusive purpose of (i) issuing its Preferred Securities and Common Securities, (ii) purchasing the Junior Subordinated Debentures with the Common Securities and the proceeds from the sale of the Preferred Securities and (iii) engaging only in those other activities necessary or incidental thereto. All of the Common Securities will be owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities, except that upon the occurrence and continuance of an Event of Default (as defined herein) under the Trust Agreement, the rights of the holders of the corresponding Common Securities to payment in respect of distributions and payments upon liquidation, redemption or other acquisition of Common Securities will be subordinated to the rights of the holders of Preferred Securities. The Company will acquire Common Securities of the Issuer in an aggregate Liquidation Amount equal to 3% of the total -5- capital of the Issuer and, at that time, also become the Depositor. The Issuer will have a term of more than 20 and not less than 50 years, as specified in the applicable Prospectus Supplement, but may terminate earlier as provided in the Trust Agreement. The Issuer's business and affairs is conducted by its trustees, each appointed by the Company as holder of the Common Securities: Wilmington Trust Company (the "Property Trustee") and three individual trustees (the "Administrative Trustees") who are employees or officers of or affiliated with the Company (collectively, the "Issuer Trustees"). The Depositor of the Issuer or the holders of a majority in Liquidation Amount of the Preferred Securities and Common Securities, if an event of default under the Trust Agreement has occurred and is continuing, will be entitled to appoint, remove or replace the Issuer Trustees. Unless an event of default under the Trust Agreement shall have occurred and is continuing, the holders of the Preferred Securities and Common Securities shall not have the right to vote to appoint, remove or replace the Administrative Trustees, which voting rights are vested exclusively in the Depositor of the Issuer. The duties and obligations of each of the Issuer Trustees are governed by the Trust Agreement. The Company has agreed to pay all fees and expenses related to the Issuer and the offering of the Preferred Securities and has agreed to pay, directly or indirectly, all ongoing costs, expenses and liabilities, limited to the extent provided herein, of the Issuer. The principal executive office of the Issuer is Tyler at Sixth, Amarillo, Texas 79101, Attention: Secretary (Tel: (806) 378-2121). RECENT DEVELOPMENTS On March 19, 1996, President Clinton proposed certain tax law changes that would, among other things, generally deny corporate issuers a deduction for interest in respect of certain debt obligations issued on or after December 7, 1995 (the "Proposed Legislation") if such debt obligations have a maximum term of in excess of 20 years and are not shown as indebtedness on the issuer's applicable consolidated balance sheet. In addition, the Proposed Legislation would deny issuers an interest deduction on any debt instrument with a weighted average maturity of more than 40 years. On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating their intent that certain legislative proposals initiated by the Clinton administration, including the Proposed Legislation, that may be adopted by either of the tax-writing committees of Congress would have an effective date that is no earlier than the -6- date of "appropriate Congressional action." There can be no assurances, however, that the effective date guidance contained in the Joint Statement will be incorporated into the Proposed Legislation, if enacted, or that other legislation enacted after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Junior Subordinated Debentures. If the tax law changed, as a result of the Proposed Legislation or otherwise, so that in the Company's judgment it would be precluded from deducting interest on the Junior Subordinated Debentures, the Company could, subject to receiving an Opinion of Counsel to the effect that a relevant tax law change (as described in the accompanying Prospectus) had occurred, redeem the Junior Subordinated Debentures in whole, thereby causing a mandatory redemption of the Preferred Securities in whole at a price of $25 per Preferred Security, plus accrued but unpaid distributions. The Company presently anticipates that, as permitted by the terms of the Junior Subordinated Debentures and subject to market and other conditions, it would cause such redemption of the Preferred Securities if the tax law changed, as a result of the Proposed Legislation or otherwise, in a manner that would not permit the interest deduction. The Company also has the option, subject to receiving an Opinion of Counsel, of distributing Junior Subordinated Debentures or the option of leaving the Preferred Securities outstanding should such a tax law change occur as described under "Description of Preferred Securities -- Special Event Redemption or Distribution." USE OF PROCEEDS The Issuer will use the proceeds from the Offering of its Preferred Securities, together with its Common Securities, to purchase Junior Subordinated Debentures. The proceeds received by the Company from the sale of the Junior Subordinated Debentures will be used as described in the Prospectus Supplement by which such securities are offered. EARNINGS RATIOS The Company's Ratio of Earnings to Fixed Charges for each of the periods indicated is as follows: -7- Twelve Months Ended ------------------- May 31, August 31, 1996 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges: 4.59 5.10 4.76 4.82 4.53 4.67 The Company's Ratios for future periods will be included in the Company's Reports on Form 10-K and 10-Q. Such Reports are incorporated by reference into this Prospectus at the time they are filed. DESCRIPTION OF PREFERRED SECURITIES General An original trust agreement between David M. Wilks, President and Chief Operating Officer of the Company, as Depositor, and Wilmington Trust Company, as the Property Trustee, has been used to authorize and create the Issuer. The original trust agreement is filed as an exhibit to the Registration Statement of which this Prospectus is a part. The Preferred Securities and the Common Securities of the Issuer (together, the "Issuer Securities") will be issued by the Administrative Trustees on behalf of the Issuer pursuant to the terms of the Trust Agreement (as amended and restated from the original trust agreement). The Preferred Securities represent undivided preferred beneficial interests in the assets of the Issuer and entitle the holders thereof to a preference over the Common Securities of such Issuer, in certain circumstances, with respect to distributions and amounts payable on redemption or liquidation as well as to other benefits as described in the Trust Agreement. The following summary of certain provisions of the Trust Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the Trust Agreement and the Trust Indenture Act. Wherever particular sections or defined terms of the Trust Agreement are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Trust Agreement unless otherwise stated. All of the Common Securities of the Issuer will be owned by the Company. The Common Securities of the Issuer rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities of the such Issuer except as described under "-- Subordination of Common Securities." (Section 4.03). Legal title to the Junior Subordinated Debentures will be held in the name of the Property Trustee and held in trust for the benefit of the -8- holders of the Issuer Securities. (Section 2.09). The Guarantee is a full and unconditional guarantee on a subordinated basis with respect to the Preferred Securities but does not guarantee payment of distributions or amounts payable on redemption or liquidation of the Preferred Securities when the Issuer does not have funds sufficient to make such payments. The Preferred Securities will initially be offered in denominations of $25 (based on Liquidation Amount) and integral multiples of $25 in excess thereof. Liquidation Amount The amount payable on the Preferred Securities in the event of any liquidation of the Issuer is $25 per Preferred Security (the "Liquidation Amount"), plus accumulated and unpaid distributions unless, in connection with such liquidation, the Junior Subordinated Debentures are distributed to the holders of the Preferred Securities. Distributions The distributions payable on the Preferred Securities will be fixed at the rate per annum set forth in the Prospectus Supplement. Distributions in arrears after the quarterly payment date therefor will accumulate additional distributions thereon compounded quarterly at the same rate per annum, to the extent permitted by law. The term "distributions" as used herein includes any such additional distributions (the "Additional Amounts"), unless otherwise stated, with respect to the Preferred Securities. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and, for any period shorter than a full month, shall be computed on the basis of the actual number of days elapsed in such period. (Section 4.01(b)). See "Description of Junior Subordinated Debentures -- Additional Interest." Distributions on the Preferred Securities will be cumulative, will accrue from the date of the initial issuance thereof, and will be payable quarterly in arrears, on the payment dates set forth in the applicable Prospectus Supplement of each year, except in the event of an extension of the interest payment period by the Company on the corresponding series of Junior Subordinated Debentures. In the event that any date on which distributions are otherwise payable on Preferred Securities is not a Business Day, payment of the distributions payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect to any such delay) except that, if such Business Day is in the next succeeding calendar -9- year, payment of such distribution shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date (each date on which distributions are otherwise payable in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall mean any day other than (x) a Saturday or a Sunday, (y) a day on which banks in New York are authorized or obligated by law or executive order to remain closed or (z) a day on which the Corporate Trust Office of the Property Trustee or the principal office of the Company is closed for business. (Section 1.01 and 4.01(a)). So long as an Event of Default under the Deferrable Interest Subordinated Debenture Indenture (the "Indenture") has not occurred and is not continuing, the Company has the right under the Indenture, as supplemented by a supplemental indenture relating to the Junior Subordinated Debentures (a "Supplemental Indenture"), to extend, at any time and from time to time, the interest payment period on each series of Junior Subordinated Debentures issued thereunder for a period not exceeding 20 consecutive quarters, with the consequence that quarterly distributions on the corresponding Preferred Securities would be deferred (but would continue to accrue distributions thereon, including additional distributions payable on unpaid distributions to the extent permitted by law at the rate per annum set forth in the Prospectus Supplement, compounded quarterly) by the Issuer during any such extended interest payment period; provided that any such extension period shall not extend beyond the maturity date or redemption date of the Junior Subordinated Debentures. During any extension period quarterly distributions on the Preferred Securities would be deferred by the Issuer, would continue to accrue, and holders of Preferred Securities would be required to accrue interest income for United States Federal income tax purposes. See "Description of Junior Subordinated Debentures -- Option to Extend Interest Payment Period" herein and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount" in the accompanying Prospectus Supplement. In the event the Company exercises this right, during such period the Company may not declare or pay any dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payments with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments -10- made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant requires that an interest payment period on the Junior Subordinated Debentures may be extended only if the interest payment periods on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such extended interest payment period, together with all previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity or the redemption date of the series of the Junior Subordinated Debentures in question. Upon the termination of any extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest payment period subject to the foregoing requirements. See "Description of Junior Subordinated Debentures -- Interest" and "-- the Company's Option to Extend Interest Payment Periods" herein and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount" in the accompanying Prospectus Supplement. It is anticipated that the income of the Issuer available for distribution to the holders of the Preferred Securities will be limited to the payments under the Junior Subordinated Debentures which the Issuer will purchase with the Common Securities and the proceeds from the issuance and sale of the Preferred Securities. See "Description of Junior Subordinated Debentures." If the Company does not make interest payments on the Junior Subordinated Debentures, the Property Trustee will not have funds available to pay distributions on the Preferred Securities. The payment of distributions (if and to the extent an Issuer has funds sufficient to make such payments) is guaranteed on a subordinated basis by the Company to the extent set forth herein under "Description of Guarantee. "The Company's obligations under the Guarantee, the Trust Agreement, the Expense Agreement, the Junior Subordinated Debentures and the Indenture constitute, in the -11- aggregate, a full and unconditional guarantee with respect to the Preferred Securities. See "Relationship Among the Preferred Secu- rities, the Junior Subordinated Debentures and the Guarantee." Distributions on the Preferred Securities will be payable to the holders thereof as they appear on the register of the Issuer on the relevant record dates, which, as long as the Preferred Securities remain in book-entry-only form, will be one Business Day prior to the relevant Distribution Date. Subject to any applicable laws and regulations and the provisions of the Trust Agreement, each such payment will be made as described under "-- Book-Entry-Only Issuance -- The Depository Trust Company" below. In the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the relevant Distribution Date. (Section 4.01(d)). Redemption Upon the repayment of any series of Junior Subordinated Debentures, whether at maturity or upon earlier redemption as provided in the Indenture, the proceeds from such repayment shall be applied by the Property Trustee to redeem a Like Amount (as defined herein) of Issuer Securities, upon not less than 30 nor more than 90 days' notice, at a redemption price equal to the aggregate Liquidation Amount plus accumulated and unpaid distributions, plus additional distributions thereon, if any, to the extent permitted by law, to the redemption date (the "Redemption Price"). See "Description of Junior Subordinated Debentures -- Optional Redemption." The Company will have the right to redeem the Junior Subordinated Debentures (a) on or after a date to be specified in the Prospectus Supplement, in whole or in part, or (b) at any time, in whole but not in part, upon occurrence of a Tax Event or an Investment Company Event (each as defined below, a "Special Event"), subject to the conditions described under "-- Special Event Redemption or Distribution" and "Description of Junior Subordinated Debentures - -- Optional Redemption." Special Event Redemption or Distribution If a Special Event shall occur and be continuing with respect to the Issuer or the Preferred Securities of the Issuer, the Company has the right to (i) redeem the corresponding Junior Subordinated Debentures in whole, but not in part, and thereby cause a mandatory redemption of such Preferred Securities in whole, but not in part, at the Redemption Price within 90 days following the occurrence of such Special Event, or (ii) terminate -12- the Issuer and cause the corresponding Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of such Issuer. If at any time the Issuer is not or will not be taxed as a grantor trust, but a Tax Event has not occurred, the Depositor has the right to terminate such Issuer and cause the corresponding Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities of such Issuer. Under current United States Federal income tax law and interpretations, if the Issuer is treated as a grantor trust at the time of the distribution, such a distribution should not be a taxable event to holders of the Preferred Securities. Should there be a change in law, a change in legal interpretation, a Special Event or other circumstances, however, the termination could be a taxable event to holders of the Preferred Securities of an Issuer. See "United States Taxation -- Receipt of Junior Subordinated Debentures Upon Liquidation of the Issuer" in the accompanying Prospectus Supplement. If the Company does not elect either option (i) or (ii) above, the Preferred Securities will remain outstanding. "Tax Event" means the receipt by the Issuer or the Company, as the case may be, of an Opinion of Counsel (which may be counsel to the Issuer, the Company or an affiliate, and which must be reasonably acceptable to the Property Trustee) experienced in such matters to the effect that a relevant tax law change has occurred after a date specified in the accompanying Prospectus Supplement. For purposes of the preceding sentence, a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the publication of any judicial opinion interpreting such laws (and regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or regulations) (including official and unofficial opinions purporting to apply such laws and regulations to other persons who have issued securities similar to the Junior Subordinated Debentures), which amendment, change, proposed amendment or change, opinion or interpretation could, if valid and enacted or applied to an Issuer or the Company, result in (i) such Issuer, either currently or within 90 days of the date thereof, becoming subject to United States Federal income tax with respect to interest -13- received on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States Federal income tax purposes or (iii) the Issuer, either currently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Investment Company Event" means the occurrence of a change in law or regulation or a change in the interpretation or application of any law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective after a date specified in the accompanying Prospectus Supplement. "Like Amount" means (i) with respect to a redemption of Issuer Securities, Issuer Securities having an aggregate Liquidation Amount equal to the principal amount of corresponding Junior Subordinated Debentures to be contemporaneously redeemed in accordance with the Indenture and the proceeds of which will be used to pay the Redemption Price of such Issuer Securities and (ii) with respect to a distribution of Junior Subordinated Debentures to holders of the Preferred Securities in connection with the termination or liquidation of the Issuer upon the bankruptcy, dissolution or liquidation of a holder of the Common Securities, the occurrence of a Special Event or in the event that the Issuer is not or will not be taxed as a grantor trust but a Tax Event has not occurred, Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of the holders to whom such series of Junior Subordinated Debentures is distributed. Redemption Procedures Preferred Securities redeemed on each date fixed for redemption (the "Redemption Date") shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of the corresponding Junior Subordinated Debentures. Redemptions of Preferred Securities shall be made, and the Redemption Price shall be deemed payable, on each Redemption Date only to the extent that an Issuer has funds sufficient for the payment of such Redemption Price. (Section 4.02(d)). See "-- Subordination of Common Securities." -14- If the Property Trustee gives a notice of redemption in respect of Preferred Securities of a particular series (which notice will be conditioned upon the redemption of the related series of Junior Subordinated Debentures), then, by 12:00 noon, New York time, on the Redemption Date, the Property Trustee will, so long as such Preferred Securities are in book-entry-only form, irrevocably deposit with The Depository Trust Company ("DTC") funds sufficient to pay the applicable Redemption Price and, at the direction of the Depositor, will give DTC irrevocable instructions and authority to pay the Redemption Price to the holders of such Preferred Securities. See "-- Book-Entry-Only Issuance -- The Depository Trust Company." If such Preferred Securities are no longer in book-entry-only form, the Property Trustee will irrevocably deposit with the Paying Agent for such Preferred Securities funds sufficient to pay the applicable Redemption Price and will give such Paying Agent irrevocable instructions and authority to pay the Redemption Price to the holders thereof upon surrender of their certificates evidencing Preferred Securities. Notwithstanding the foregoing, distributions payable on or prior to the Redemption Date for any Preferred Securities called for redemption shall be payable to the holders of such Preferred Securities on the relevant record date for the related Distribution Date. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of holders of such Preferred Securities so called for redemption will cease, except the right of the holders of such Preferred Securities to receive the Redemption Price, but without interest on such Redemption Price, and such Preferred Securities will cease to be outstanding. In the event that any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Preferred Securities called for redemption is not paid either by the Issuer or by the Company pursuant to the Guarantee described herein under "Description of Guarantee," distributions on such Preferred Securities will continue to accrue at the rate set forth on the face of such securities, from the original Redemption Date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. Failure to deposit the Redemption Price with the Property Trustee (and/or irrevocably direct the Property Trustee to apply money held by it to the redemption of Preferred Securities) in the case of an optional redemption shall not be an Event of Default but shall be deemed to be a rescission of the call for redemption. (Section 4.02(e)). -15- Subject to applicable law (including, without limitation, United States Federal securities law), the Company or its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement. Payment of the Redemption Price on Preferred Securities to holders of such Preferred Securities shall be made to the record holders thereof as they appear on the register for such Preferred Securities on the relevant record date, which shall be one Business Day prior to the relevant Redemption Date, provided, however, that in the event that such Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the Redemption Date. (Section 4.02(f)). If less than all the outstanding Issuer Securities are to be redeemed on a Redemption Date, then the aggregate amount payable shall be allocated 3% to the Common Securities and 97% to the Preferred Securities. The particular Preferred Securities to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Property Trustee from the outstanding Preferred Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 and integral multiples in excess thereof) of the aggregate Liquidation Amount of Preferred Securities of a denomination larger than $25. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities selected for partial redemption and, in the case of any such Preferred Securities selected for partial redemption, the aggregate Liquidation Amount thereof to be redeemed. For all purposes of the Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of a series of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of the Preferred Securities that has been or is to be redeemed. (Section 4.02(g)). Subordination of Common Securities Payment of distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, Issuer Securities, as applicable, shall be made pro rata based on the aggregate Liquidation Amount of both the Preferred Securities and the Common Securities; provided, however, that if on any Distribution Date or Redemption Date an Event of Default (as defined herein, see "-- Events of Default; Notice," below) under the Indenture shall have occurred and be continuing, with respect to the Preferred Securities, no payment of any distribution (including Additional -16- Amounts, if applicable) on, or the Redemption Price of, any Common Security corresponding thereto, and no other payment on account of the redemption, liquidation or other acquisition of the corresponding Common Securities shall be made unless payment in full in cash of all accumulated and unpaid distributions (including Additional Amounts, if applicable) on all outstanding Preferred Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all such outstanding Preferred Securities called for redemption, shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full in cash of all distributions (including Additional Amounts, if applicable) on, or the Redemption Price of such Preferred Securities then due and payable. (Section 4.03(a)). In the case of any Event of Default under the Trust Agreement, the holder of the Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under such Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under the Trust Agreement have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of the Preferred Securities and not the holder of the Common Securities, and only the holders of such Preferred Securities will have the right to direct the Property Trustee to act on their behalf. (Section 4.03(b)). Liquidation Distribution Upon Dissolution Pursuant to the Trust Agreement, the Issuer shall be liquidated on the first to occur of: (i) the expiration of the term of the Trust; (ii) the bankruptcy, dissolution or liquidation of a holder of Common Securities; (iii) the Depositor has elected to cause the Trust to be dissolved after the occurrence of a Special Event or in the event that the Trust is not or will not be taxed as a grantor trust but a Tax Event has not occurred; (iv) the redemption of all of the Preferred Securities; and (v) an order for dissolution of the Trust issued by a court of competent jurisdiction. (Section 9.01 and 9.02). If an early termination occurs as described in clause (iii) of the immediately preceding paragraph, the Issuer shall be liquidated as expeditiously as practicable by having the Property Trustee distribute, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of -17- such distribution, to each holder of Preferred Securities and Common Securities a Like Amount of Junior Subordinated Debentures held by such Issuer (a "Final Distribution"). However, in the event that the Property Trustee determines that such Final Distribution is impractical, the holders of such Issuer Securities will be entitled to receive, out of the assets of the Issuer available for distribution to holders after satisfaction of all liabilities of creditors, an amount equal to the aggregate of the stated Liquidation Amount of $25 per Issuer Security plus accrued and unpaid distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because the Issuer has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by such Issuer on the Issuer Securities shall be paid on a pro rata basis. However, if an Event of Default has occurred and is continuing, the holders of the Common Securities will be entitled to receive distributions upon any such dissolution only after the holders of the Preferred Securities. If the Junior Subordinated Debentures are distributed to the holders of the corresponding Preferred Securities, the Company will use reasonable efforts to have such Junior Subordinated Debentures listed on such stock exchanges, if any, on which the Preferred Securities are then listed. If the Company defaults on its payment obligations under the Indenture, a holder will have the right to take action directly against the Company for enforcement of payment of principal of or interest on the Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such holder. If an early termination occurs as described in clause (ii) of the immediately preceding paragraph, a liquidating trustee (the "Liquidating Trustee") may be appointed by a majority of the aggregate Liquidation Amount of the Issuer Securities or by a court of competent jurisdiction. Any such Liquidating Trustee shall (unless otherwise instructed by a court of competent jurisdiction) make a Final Distribution or, if deemed appropriate by such Liquidating Trustee, make a Liquidation Distribution, in substantially the same manner as described above. (Section 9.04). Events of Default; Notice The occurrence of an "Event of Default" as defined in Section 501 of the Indenture (see "Description of Junior Subordinated Debentures -- Events of Default") constitutes an "Event of Default" under the Trust Agreement. Within five Business Days after the occurrence of any Event of Default actually known to the Property Trustee, the Property Trustee shall transmit notice of such Event of Default to the holders of the Preferred Securities, the Administrative Trustees -18- and the Depositor, unless such Event of Default shall have been cured or waived. (Section 8.02). Unless an Event of Default shall have occurred and be continuing, any Trustee with respect to the Issuer Securities may be removed at any time by act of the Depositor of the Issuer. If an Event of Default has occurred and is continuing, any Trustee with respect to the Issuer Securities may be removed at such time by act of the holders of a majority in aggregate Liquidation Amount of the outstanding Issuer Securities, delivered to such Trustee (in its individual capacity and on behalf of the relevant Issuer). No resignation or removal of a Trustee and no appointment of a successor Trustee shall be effective until the acceptance of appointment by the successor Trustee in accordance with the provisions of the Trust Agreement. (Section 8.10). If an Event of Default has occurred and is continuing, the Preferred Securities shall have a preference over the corre- sponding Common Securities upon dissolution of the relevant Issuer as described above. See "-- Liquidation Distribution Upon Dissolution." Merger or Consolidation of a Trustee Any corporation into which either the Property Trustee or any Administrative Trustee that is not a natural person may be merged or with which it may be consolidated or any corporation resulting from any merger, conversion or consolidation to which any such Trustee shall be a party shall be the successor to such Trustee under the Trust Agreement, provided such corporation is otherwise qualified and eligible. (Section 8.12). Voting Rights Except as provided below and under "Description of Guarantee -- Amendments and Assignments" and as otherwise required by law, the holders of the Preferred Securities will have no voting rights. (Section 6.01(a)). So long as any Junior Subordinated Debentures are held by the Issuer, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to the Junior Subordinated Debentures, (ii) waive any past default which is waivable under Section 513 of the Indenture, (iii) exercise any right to rescind or annul any declaration that the principal of all the Junior Subordinated Debentures shall be due and payable or (iv) consent to any amendment, modification of termination of the -19- Indenture or the Junior Subordinated Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the holders of at least a majority in aggregate Liquidation Amount of the outstanding Issuer Securities; provided, however, that where a consent under the Indenture would require the consent of each holder of Junior Subordinated Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior consent of each holder of the Issuer Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the holders of the Issuer Securities, except pursuant to a subsequent vote of the outstanding Issuer Securities. The Property Trustee shall notify all holders of Issuer Securities of any notice of default received from the Debenture Trustee. In addition to obtaining the foregoing approvals of the holders of the Issuer Securities, prior to taking any of the foregoing actions, the Property Trustee shall obtain an Opinion of Counsel experienced in such matters to the effect that the Issuer will not be classified as an association taxable as a corporation for United States Federal income tax purposes on account of such action. (Section 6.01(b)). If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the holders of the Issuer Securities, whether by way of amendment to the Trust Agreement relating to such Issuer Securities or otherwise, or (ii) the dissolution, winding-up or termination of the Issuer, other than pursuant to the Trust Agreement, then the holders of the outstanding Issuer Securities will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the approval of the holders of at least a majority in aggregate Liquidation Amount of such outstanding Issuer Securities. (Section 6.01(c)). No amendment to the Trust Agreement may be made if, as a result of such amendment, the Issuer would be classified as an association taxable as a corporation for United States Federal income tax purposes. (Section 6.01(c)). Any required approval of the holders of Issuer Securities may be given at a meeting of the holders of Issuer Securities convened for such purpose or pursuant to the written consent of such holders. The Administrative Trustees will cause a notice of any meeting at which holders of such Issuer Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each holder of record of such Issuer Securities in the manner set forth in the Trust Agreement (Section 6.02). -20- No vote or consent of the holders of Issuer Securities will be required for the Issuer to redeem and cancel Issuer Securities in accordance with the Trust Agreement. Notwithstanding that holders of Issuer Securities are entitled to vote or consent under any of the circumstances described above, any of the Issuer Securities that are owned by the Company, any Trustee or any affiliate of the Company or any Trustee, shall, for purposes of such vote or consent, be treated as if they were not outstanding. Co-Property Trustees and Separate Property Trustees Unless an Event of Default under the Trust Agreement shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property (as defined in the Trust Agreement) may at the time be located, the Depositor and the Administrative Trustees shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint one or more persons approved by the Property Trustee either to act as co-property trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such Trust Property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in such capacity, any property, title, right or power deemed necessary or desirable, subject to the provisions of the Trust Agreement. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request to do so, or in case an Event of Default under the Indenture has occurred and is continuing, the Administrative Trustees and the Property Trustee shall have power to make such appointment. (Section 8.09). Payment and Paying Agents Payments in respect of the Preferred Securities shall be made to DTC, which shall credit the relevant accounts at DTC on the applicable Distribution Dates or, if the Preferred Securities are not held by DTC, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on the securities register. The Paying Agent shall initially be Wilmington Trust Company. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that Wilmington Trust Company chooses no -21- longer to be the Paying Agent, the Administrative Trustees shall appoint a successor acceptable to the Property Trustee and the Company to act as Paying Agent (which shall be a bank or trust company or the Company). (Section 4.04 and 5.08). Book-Entry-Only Issuance--The Depository Trust Company DTC will act as securities depository for the Preferred Securities. The Preferred Securities will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global Preferred Security certificates will be issued, representing in the aggregate the total number of Preferred Securities, and will be deposited with Wilmington Trust Company, as custodian for DTC. 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 the securities that its participants ("Participants") deposit with it. DTC facilitates the settlement of securities transactions among Participants through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers, securities dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants, as well as by the New York Stock Exchange, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers, securities dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The underwriters with respect to the Preferred Securities may be Direct or Indirect Participants. The rules applicable to DTC and its Participants are on file with the Commission. Purchases of Preferred Securities within the DTC system must be made by or through Direct Participants, which will receive a credit for the Preferred Securities on DTC's records. The ownership interest of each actual purchaser of each Preferred Security ("Beneficial Owner") is, in turn, recorded on a Direct or Indirect Participant's records, as the case may be. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as -22- periodic statements of their holdings, from the respective Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Securities. Transfers of ownership interests in the Preferred Securities are also effected 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 Preferred Securities, except in the event that use of the book-entry system for the Preferred Securities is discontinued. DTC has no knowledge of the actual Beneficial Owners of the Preferred Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Preferred Securities are credited, which may or may not be the Beneficial Owners. The Participants are 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 the arrangements made among them, subject to any statutory or regulatory requirements as may be in effect from time time. Redemption notices, if any, will be sent to DTC. If less than all of the Preferred Securities of a particular series are being redeemed, DTC's practice is to determine by lot the amount of the Preferred Securities held by each Direct Participant in such series to be redeemed. Although voting with respect to the Preferred Securities is limited to the holders of record of the Preferred Securities, in those cases where a vote is required neither DTC nor Cede & Co. will itself consent or vote with respect to any Preferred Securities. Under its usual procedures, DTC would mail an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants (identified in a listing attached to the Omnibus Proxy) to whose accounts the Preferred Securities are credited on the record date. Distribution payments on the Preferred Securities will be made by the Issuer to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings as shown on DTC's records, unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participants and not of -23- DTC, the Issuer or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of distributions to DTC is the responsibility of the Issuer, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of the Direct or Indirect Participants in whose accounts the Preferred Securities are held, respectively. DTC may discontinue providing its services as securities depositary with respect to the Preferred Securities at any time by giving reasonable notice to the Issuer. If DTC stops providing such services and a successor securities depositary is not obtained, Preferred Security certificates must be printed and delivered. Additionally, the Administrative Trustees (with the consent of the Company) could decide to discontinue use of the system of book-entry transfers through DTC (or a successor depositary). In that event, definitive certificates for the Preferred Securities would be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company and the Issuer believe to be reliable. Neither the Company nor the Issuer have responsibility for the performance by DTC or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. Registrar and Transfer Agent Wilmington Trust Company will act as Securities Registrar and transfer agent for the Issuer Securities. (Section 5.04). Registration of transfers of Issuer Securities will be effected without charge by or on behalf of the Issuer, but upon payment (with the giving of such indemnity as the Issuer or the Company may require) in respect of any tax or other governmental charges which may be imposed in connection therewith. (Section 5.04). The Securities Registrar will not be required to register or cause to be registered any transfer of Issuer Securities after they have been called for redemption. (Section 5.04). Information Concerning the Property Trustee The Property Trustee undertakes to perform only such duties as are specifically set forth in the Trust Agreement and, -24- after an Event of Default under the Indenture, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Preferred Securities or Junior Subordinated Debentures unless the Property Trustee is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. (Section 8.01). Modification of the Trust Agreement From time to time, the Company and the Trustees may, without the consent of any holders of the Preferred Securities, amend the Trust Agreement for specified purposes, including, among other things, (i) to cure ambiguities, correct or supplement any provision of the Trust Agreement which may be inconsistent with any other provision thereof or to make any other provisions with respect to matters or questions arising under the Trust Agreement which shall not be inconsistent with the other provisions of the Trust Agreement, or (ii) to ensure that the Trust will not be classified for United States Federal income tax purposes as an association taxable as a corporation and will not be required to register as an "investment company" under the 1940 Act; provided, however, that such amendment or action shall not adversely affect the rights of any holder of the Issuer Securities. The Trust Agreement contains provisions permitting the Company and the Trustees, with the consent of the holders of not less than a majority in aggregate Liquidation Amount of the outstanding Issuer Securities related thereto and upon receipt of an appropriate Opinion of Counsel, to modify the Trust Agreement in a manner affecting the rights of the holders of such Issuer Securities; provided that no such modification may, without the consent of the holder of each such outstanding Issuer Security affected by the proposed modification (i) change the amount or timing of any distribution on such Issuer Securities or otherwise adversely affect the amount of any distribution required to be made in respect of such Issuer Securities as of a specified date, (ii) restrict the right of any holder of such Issuer Securities to institute suit for the enforcement of any payment under such Trust Agreement or (iii) change the percentage of Issuer Securities required to consent to any modification to the Trust Agreement. (Section 10.02). Governing Law The Trust Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware. (Section 10.05). -25- Miscellaneous The Administrative Trustees are authorized and directed to conduct the affairs of the Issuer and to operate the Issuer so that the Issuer will not be deemed to be an "investment company" required to be registered under the 1940 Act or be taxed as a corporation for United States Federal income tax purposes and so that the Junior Subordinated Debentures will be treated as indebtedness of the Company for United States Federal income tax purposes. In this connection, the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the Issuer or the Trust Agreement, that the Administrative Trustees determine in their discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect the interest of the holders of the Preferred Securities. (Section 2.07). Holders of the Preferred Securities have no preemptive rights. DESCRIPTION OF GUARANTEE General Set forth below is certain information concerning the Guarantee that will be executed and delivered by the Company for the benefit of the holders from time to time of Preferred Securities. The Guarantee will be qualified as an indenture under the Trust Indenture Act. Wilmington Trust Company will act as indenture trustee (the "Guarantee Trustee") under the Guarantee for purposes of compliance with the Trust Indenture Act. The terms of the Guarantee will be those set forth in such Guarantee and those made part of such Guarantee by the Trust Indenture Act. This summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Guarantee, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part, and of the Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Preferred Securities. Whenever particular provisions of or defined terms in the Guarantee are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Guarantee unless otherwise stated. The Company will agree, on a subordinated basis, to the extent set forth below, to make the Guarantee Payments (as defined below) in full to the holders of the Preferred Securities (without -26- duplication of amounts theretofore paid by the Issuer with respect thereto), as and when due, regardless of any defense, right of set-off or counterclaim that such Issuer may have or assert other than the defense of payment. (Section 5.1). The following payments with respect to the Preferred Securities, to the extent not paid by or on behalf of the Issuer (the "Guarantee Payments"), will be subject to the related Guarantee (without duplication): (i) any accrued and unpaid distributions required to be paid on the Preferred Securities, if and only to the extent that the Issuer has funds sufficient to make such payment; (ii) the Redemption Price with respect to any such Preferred Securities called for redemption by the Issuer, if and only to the extent that the Issuer has funds sufficient to make such payment; and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of such Issuer (other than in connection with a redemption of all of the corresponding Preferred Securities), the lesser of (a) the aggregate Liquidation Amount and all accrued and unpaid distributions on such Preferred Securities to the date of payment, to the extent the Issuer has funds sufficient to make such payment, and (b) such amount of assets of such Issuer remaining available for distribution to holders of such Preferred Securities in liquidation of such Issuer. (Section 1.1). The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of the Preferred Securities or by causing the Issuer to pay such amounts to such holders. (Section 5.1). The Guarantee will be a guarantee on a subordinated basis with respect to the Preferred Securities from the time of the issuance of such Preferred Securities, but will not apply (i) to any payment of distributions if and to the extent that the Issuer does not have funds sufficient to make such payments or (ii) to the collection of payment. If the Company does not make interest payments on a series of Junior Subordinated Debentures held by the Issuer, it is expected that such Issuer will not pay distributions on such Preferred Securities. The Guarantee will rank subordinate and junior in right of payment to all liabilities of the Company (except trade credit and any liabilities made pari passu with, or subordinate to, the Guarantee by their terms). See "-- Status of the Guarantee." With respect to the Preferred Securities, the mechanisms and obligations relating to the Guarantee, the Indenture and the Junior Subordinated Debentures and the obligation of the Company under the Trust Agreement to pay all obligations, costs and expenses (other than obligations of the Trust to pay to holders of the Preferred Securities the amounts due such holders pursuant to the terms of the Preferred Securities) of the Issuer (the "Expense Agreement") taken together, are a full and unconditional -27- subordinated guarantee by the Company of payment due of such Preferred Securities. See "Description of Junior Subordinated Debentures" and "Relationship Among the Preferred Securities, the Junior Subordinated Debentures and the Guarantee". Amendments and Assignments Except with respect to any changes that do not adversely affect the rights of the holders of Preferred Securities (in which case no consent of such holders will be required), the terms of the Guarantee may be changed only with the prior approval of the holders of not less than a majority in aggregate Liquidation Amount of such outstanding Preferred Securities. All guarantees and agreements contained in the Guarantee will be binding upon the successors, assigns, receivers, trustees and representatives of the Company, and shall inure to the benefit of the holders of the corresponding Preferred Securities then outstanding. (Sections 8.1 and 8.2). Events of Default An event of default under the Guarantee will occur upon the failure of the Company to perform any of its payment obligations thereunder. (Section 1.1). The holders of a majority in aggregate Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. (Section 5.4). Any holder of the Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. (Section 5.4). Information Concerning the Guarantee Trustee The Guarantee Trustee, other than during the occurrence and continuance of a default by the Company in the performance of the Guarantee, undertakes to perform only such duties as are specifically set forth in the Guarantee and, after default with respect to the Guarantee, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee at the request of any holder of Preferred Securities unless the Guarantee Trustee is offered -28- reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. (Sections 3.1 and 3.2). Termination of the Guarantee The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of all Preferred Securities, the distribution of Junior Subordinated Debentures to the holders of such Preferred Securities in exchange for all of such Preferred Securities or upon payment in full of the amounts payable upon liquidation of the Issuer. Notwithstanding the foregoing, the Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Securities must restore payment of any sums paid under such Preferred Securities or the Guarantee. (Section 7.1). Status of the Guarantee The Guarantee will constitute an unsecured obligation of the Company and will rank subordinate and junior in right of payment to all Senior Indebtedness (as defined below) of the Company. (Section 6.1). The Trust Agreement provides that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Guarantee. The Guarantee will rank pari passu with any similar guarantees issued by the Guarantor on behalf of the holders of Preferred Securities issued by any other issuer holding Junior Subordinated Debentures issued under the Indenture. (Section 6.2). The Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly against the Guarantor to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity). (Section 5.5). Governing Law The Guarantee will be governed by and construed in accordance with the laws of the State of New York. (Section 8.5). DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES General Set forth below is a description of certain terms of the Junior Subordinated Debentures which the Issuer will purchase with -29- its Common Securities and the proceeds of the issuance and sale of such Issuer's Preferred Securities. The following summary does not purport to be complete and is subject in all respects to, and is qualified in its entirety by reference to, the Indenture, as supplemented by a supplemental indenture creating the series of Junior Subordinated Debentures (the "Supplemental Indenture"), from the Company to Wilmington Trust Company, as trustee with respect to the Junior Subordinated Debentures (the "Debenture Trustee"), the forms of which are filed as exhibits to the Registration Statement of which this Prospectus is a part, and the Trust Indenture Act. Whenever particular provisions of or defined terms in the Indenture or the Supplemental Indenture are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Indenture unless otherwise stated. Concurrently with the issuance of Preferred Securities, the Issuer will invest the proceeds thereof in a corresponding series of Junior Subordinated Debentures newly issued by the Company. The Junior Subordinated Debentures will mature on a date that is more than 20 and less than 50 years from the date of issuance, as specified in the Prospectus Supplement. The Junior Subordinated Debentures will be unsecured subordinated obligations of the Company issued under the Indenture. The Junior Subordinated Debentures will be in a principal amount equal to the aggregate stated Liquidation Amount of the Preferred Securities plus the Company's concurrent investment in the Common Securities and will rank pari passu with any other series of Junior Subordinated Debentures that may be issued. The Indenture does not limit the aggregate principal amount of Junior Subordinated Debentures which may be issued thereunder. Optional Redemption The Company will have the right, at any time and from time to time, as set forth in the Supplemental Indenture, to redeem the Junior Subordinated Debentures, in whole or in part, at a redemption price as set forth in such Supplemental Indenture, together with any accrued but unpaid interest thereon, including any Additional Interest (as defined below) to the redemption date. If a Special Event shall occur and be continuing, the Company shall have the right to redeem any series of Junior Subordinated Debentures in whole but not in part, at 100% of the principal amount thereof plus any accrued and unpaid interest on such Junior Subordinated Debentures, including any Additional Interest, if any, to the redemption date fixed for redemption for such series. (Section 102 of the Supplemental Indenture). -30- For so long as the Issuer is the holder of all the outstanding Junior Subordinated Debentures, the proceeds of any such redemption will be used by such Issuer to redeem Preferred Securities and the Common Securities in accordance with their terms. The Company may not redeem Junior Subordinated Debentures in part unless all accrued and unpaid interest thereon (including any Additional Interest) has been paid in full on all outstanding Junior Subordinated Debentures for all interest periods terminating on or prior to the redemption date. (Section 102 of the Supplemental Indenture). Any optional redemption of Junior Subordinated Debentures shall be made upon not less than 30 nor more than 90 days' notice to the holders thereof. If at the time of mailing of any notice of redemption the Company shall not have deposited with the Debenture Trustee (and/or irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Debentures) an amount in cash sufficient to redeem all of the Junior Subordinated Debentures to be redeemed, including accrued interest to such redemption date, such notice shall state that the proposed redemption to which such notice relates is subject to the deposit of such amount with the Debenture Trustee on or before the redemption date. Failure to have so deposited such amount (or directed such payment) shall not constitute an Event of Default but shall be deemed to be a rescission of the call for redemption. (Section 1204). After notice of redemption is given and the Company having on or before the redemption date deposited with the Debenture Trustee (and/or having irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Debentures) an amount in cash sufficient to redeem all of the Junior Subordinated Debentures to be redeemed, the Junior Subordinated Debentures so to be redeemed will, on the redemption date, become due and payable and from and after such date, such Junior Subordinated Debentures will cease to bear interest. (Section 1206). The Junior Subordinated Debentures will be subject to optional redemption in whole, but not in part, upon the termination and liquidation of the Issuer holding such series of Junior Subordinated Debentures pursuant to an order for the dissolution, termination or liquidation of such Issuer entered by a court of competent jurisdiction. For so long as the Issuer is the holder of all Junior Subordinated Debentures, the proceeds of any redemption described in this section shall be used by such Issuer to redeem its Preferred Securities and the Common Securities in accordance with their terms. -31- The Company shall not redeem the Junior Subordinated Debentures in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Junior Subordinated Debentures outstanding for all interest periods on or prior to the redemption date. Distributions of Debentures Under certain circumstances involving the termination of the Issuer, Junior Subordinated Debentures held by such Issuer may be distributed to the holders of the Preferred Securities in liquidation of the Issuer, after satisfaction of all liabilities to creditors of the Issuer as provided by applicable law. If distributed to holders of Preferred Securities in liquidation, the Junior Subordinated Debentures will initially be issued in the form of one or more global securities, and DTC, or any successor depositary for the Preferred Securities, will act as depositary for the Junior Subordinated Debentures. It is anticipated that the depositary arrangements for the Junior Subordinated Debentures, if distributed, would be substantially identical to those in effect for the Preferred Securities. Neither the Company, the Debenture Trustee, any Paying Agent nor any other agent of the Company or the Debenture Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of persons holding Junior Subordinated Debentures in the form of a global security for the Junior Subordinated Debentures or for maintaining, supervising or reviewing any records relating to such holders. A global security shall be exchangeable for Junior Subordinated Debentures registered in the names of persons other than DTC or its nominee only if (i) DTC notifies the Company that it is unwilling or unable to continue as a depositary for such global security and no successor depositary shall have been appointed, or if at any time DTC ceases to be a clearing agency registered under the Exchange Act at a time when DTC is required to be so registered to act as such depositary, (ii) the Company in its sole discretion determines that such global security shall be so exchangeable, or (iii) there shall have occurred and be continuing an Event of Default with respect to such global security. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for definitive certificates registered in such names as DTC shall direct. It is expected that such instructions will be based upon directions received by DTC from its Participants with respect to the ownership of beneficial interests in such global security. In the event that Junior Subordinated Debentures are issued in definitive form, such Junior Subordinated Debentures will be issued in denominations of $25 and integral -32- multiples thereof and may be transferred or exchanged at the offices described below. Payments on Junior Subordinated Debentures represented by a global security will be made to DTC, as the depositary for the Junior Subordinated Debentures. In the event Junior Subordinated Debentures are issued in definitive form, principal and interest will be payable, the transfer of the Junior Subordinated Debentures will be registrable, and Junior Subordinated Debentures will be exchangeable for Junior Subordinated Debentures of other denominations of a like aggregate principal amount, at the corporate office of the Debenture Trustee in Wilmington, Delaware, or at the offices of any paying or transfer agent appointed by the Company, provided that payment of interest may be made, at the option of the Company, by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the Junior Subordinated Debentures are issued in certificated form, the record dates for payment of interest will be the 15th day preceding the end of each quarter. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights and other matters, see "Description of Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust Company." If the Junior Subordinated Debentures are distributed to the holders of Preferred Securities upon the liquidation of the Issuer, the Company will use its best efforts to list the Junior Subordinated Debentures on such stock exchanges, if any, as the Preferred Securities are then listed. Interest The Junior Subordinated Debentures shall bear interest at the rate per annum set forth in the applicable Supplemental Indenture and from the date specified therein. Such interest shall be payable in arrears on the dates of each year specified in the Supplemental Indenture (each, an "Interest Payment Date"), subject to certain exceptions, to the person in whose name such Junior Subordinated Debentures are registered, at the close of business on the Business Day next preceding such Interest Payment Date. (Section 307 of the Indenture and Section 101 of the Supplemental Indenture). It is anticipated that the Junior Subordinated Debentures issued with respect to an issue of Preferred Securities will be held in the name of the Property Trustee in trust for the benefit of the holders of the Issuer Securities. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and, for any period shorter than a full monthly period, shall be -33- computed on the basis of the actual number of days elapsed in such period. (Section 310). In the event that any date on which interest is payable on the Junior Subordinated Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. (Section 101 of the Supplemental Indenture). Interest which is accrued and unpaid after the Interest Payment Date therefor will bear additional interest on the amount thereof (to the extent permitted by law) at the rate specified for the Junior Subordinated Debentures. The term "Interest" as used herein shall include interest payments, interest on interest payments in arrears and Additional Interest, as applicable. The Company's Option to Extend Interest Payment Periods The Company shall have the right, at any time and from time to time while the Junior Subordinated Debentures are outstanding, so long as an Event of Default has not occurred or is continuing, to extend the interest payment period on such Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters (the "Extension Period") during which period interest will compound quarterly. At the end of any such Extension Period, the Company must pay all interest then accrued and unpaid (together with interest thereon at the rate specified for such Junior Subordinated Debentures to the extent permitted by applicable law). During any such Extension Period, the Company may not declare or pay any dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, -34- make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant requires that an interest payment period on the Junior Subordinated Debentures may be extended only if the interest payment periods on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters or extend beyond the maturity date or redemption date of such Junior Subordinated Debentures. Upon the termination of any such Extension Period and the payment of all amounts then due, the Company may select a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. So long as the Property Trustee shall be the sole holder of the Junior Subordinated Debentures, the Company must give the Property Trustee, the Administrative Trustees and the Debenture Trustee notice of its selection of such Extension Period at least one Business Day prior to the earlier of (i) the date that the distribution on the Preferred Securities is payable or (ii) the date the Administrative Trustees are required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Preferred Securities of the record date for the payment of such distribution or the date such distribution is payable, but in any event not less than one Business Day prior to such record date. The Debenture Trustee will be required to give prompt notice of the Company's selection of such Extension Period to the holders of the Preferred Securities and the Administrative Trustees. (Section 101 of the Supplemental Indenture). Right of Set-Off Notwithstanding anything to the contrary in the Indenture, the Company shall have the right to set-off any payment it is otherwise required to make thereunder to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Guarantee. (Section 311). -35- Additional Interest If at any time the Issuer shall be required to pay any interest on distributions in arrears in respect of the Preferred Securities pursuant to the terms thereof, the Company will pay as interest to such Issuer, as the holder of the corresponding Junior Subordinated Debentures, an amount of additional interest ("Additional Interest Attributable to Deferral") equal to interest on distributions in arrears. Accordingly, in such circumstances the Company will, to the fullest extent permitted by applicable law, pay interest upon interest in order to provide for quarterly compounding on such Junior Subordinated Debentures. In addition, if the Issuer is required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority, then, in each case, the Company will also pay such amounts as shall be required so that the net amounts received and retained by such Issuer after paying such taxes, duties, assessments or governmental charges will be not less than the amounts such Issuer would have received had no such taxes, duties, assessments or governmental charges been imposed ("Additional Interest Attributable to Taxes," and, together with Additional Interest Attributable to Deferral, "Additional Interest"). (Section 101 of the Indenture and Section 101 of the Supplemental Indenture). Subordination The Junior Subordinated Debentures will be subordinate and junior in right of payment to the prior payment, in full in cash or cash equivalents, of all Senior Indebtedness (as defined below). (Sections 101 and 1101). In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company or to its assets, or (b) any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company (except a distribution in connection with a consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following conveyance, transfer or lease of its properties and assets substantially as an entirety to another corporation upon the terms and conditions described below under "--Consolida- tion, Merger and Sale"), the holders of all Senior Indebtedness will be entitled to receive payment in full in cash or cash equivalents of all amounts due or to become due thereon, before the holders of Junior Subordinated Debentures are entitled to receive any payment on account of the principal of or interest on the -36- Junior Subordinated Debentures; and any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the holders of the Junior Subordinated Debentures or the Debenture Trustee would be entitled but for the provisions of the Indenture relating to subordination shall be paid by the liquidating trustee or agent or other person making such payment or distribution directly to the holders of Senior Indebtedness ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness to the extent necessary to make payment in full in cash or cash equivalents of all Senior Indebtedness remaining unpaid. In the event that, notwithstanding the foregoing, the Debenture Trustee or any holder of the Junior Subordinated Debentures shall have received payment or distribution of assets of the Company of any kind or character (excluding certain permitted subordinated securities) before all Senior Indebtedness is paid in full or payment thereof provided for, then such payment or distribution will be paid over or delivered to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person making payment or distribution of the assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or cash equivalents. (Section 1102). The Company is prohibited from making payments on account of the principal of or interest on the Junior Subordinated Debentures or on account of the purchase or redemption or other acquisition of the Junior Subordinated Debentures if there shall have occurred and be continuing: (a) a default in any payment with respect to any Senior Indebtedness or (b) any other event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof. (Section 1103). In the event that the Company makes any payment to the Debenture Trustee or any holder of Junior Subordinated Debentures, which payment is prohibited by the foregoing, then such payment is required to be paid over to the representative of the holders of the Senior Indebtedness then outstanding to the extent necessary to pay in full, in cash or cash equivalents, all Senior Indebtedness. (Section 1103). Subject to the payment in full of all Senior Indebtedness, the holders of the Junior Subordinated Debentures shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments and distributions of assets of the Company applicable to the Senior Indebtedness until the Junior Subordinated Debentures are paid in full. (Section 1105). If the Company fails to make any payment on the Junior Subordinated Debentures when due or within any applicable grace -37- period, such failure will constitute an Event of Default under the Indenture. See "--Events of Default." As of May 31, 1996, the Senior Indebtedness of the Company was approximately $771 million. The term "Senior Indebtedness" shall mean the principal of, interest on and any other payment due pursuant to any of the following, whether outstanding at the date of execution of any Supplemental Indenture or thereafter incurred, created or assumed: (a) all indebtedness of the Company on a consolidated basis (other than any obligations to trade creditors) evidenced by notes, debentures, bonds or other securities sold by the Company for money borrowed and capitalized lease obligations; (b) all indebtedness of others of the kinds described in the preceding clause (a) assumed by or guaranteed in any manner by the Company or in effect guaranteed by the Company; (c) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company and all obligations of the Company under any title retention agreement (but excluding trade accounts payable); (d) certain obligations of the Company for the reimbursement of any obligor on any letter of credit, banker's acceptance, security purchase facility, surety bond or similar credit transaction entered into in the ordinary course of business of the Company; and (e) all renewals, extensions or refundings of indebted- ness of the kinds described in any of the preceding clauses (a) through (d); unless, in the case of any particular indebtedness, capitalized lease obligation, guarantee, renewal, extension or refunding, the instrument creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebtedness, capitalized lease obligation, guarantee, renewal, extension or refunding is made pari passu with or subordinate to the Junior Subordinated Debentures. (Section 101). Notwithstanding the foregoing, the Junior Subordinated Debentures will rank pari passu with each other series of Junior Subordinated Debentures that may be issued under the Indenture. -38- The Indenture does not limit the aggregate amount of Senior Indebtedness that may be issued. Certain Covenants The Junior Subordinated Debentures will not be secured by any properties or assets and will represent unsecured debt of the Company. Unless otherwise indicated in a Prospectus Supplement, the covenants contained in the Indenture and the Junior Subordinated Debentures do not afford holders of the Junior Subordinated Debentures special protection in the event of a highly leveraged or other transaction involving the Company that may adversely affect holders of the Junior Subordinated Debentures. In the Indenture, the Company covenants that it will not declare or pay any dividends or distributions (other than dividends or distributions payable in common stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payments with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures) if at such time (i) there shall have occurred any event of which the Company has actual knowledge that (a) with the giving of notice or the lapse of time, or both, would constitute an Event of Default with respect to such Junior Subordinated Debentures and (b) which the Company shall not have taken reasonable steps to cure, (ii) the Company shall have given notice of its selection of an Extension Period as provided in the Indenture, and such Extension Period, or any extension thereof, shall have commenced and be continuing, or (iii) the Company shall be in default with respect to its payment of any obligations under the Guarantee. Notwithstanding the foregoing, the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher -39- ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. (Section 1005). The Company also covenants (i) not to transfer ownership of Common Securities of the Issuer to which Junior Subordinated Debentures have been issued to any person other than an affiliate of the Company as permitted under the Indenture; provided that no such transfer will result in (x) such Issuer being considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, or (y) the Issuer not being taxed as a grantor trust for United States Federal income tax purposes, (ii) not to voluntarily dissolve, wind up or terminate the Issuer, except in connection with the distribution of the Junior Subordinated Debentures to the holders of the Preferred Securities of such Issuer in liquidation of such Issuer or in connection with certain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use its reasonable efforts, consistent with the terms and provisions of the Trust Agreement, to cause such Issuer to remain a grantor trust and otherwise not to be classified as an association taxable as a corporation for United States Federal income tax purposes. (Section 1005). Events of Default The Indenture will provide that any one or more of the following described events with respect to Junior Subordinated Debentures that has occurred and is continuing constitutes an "Event of Default" with respect to the Junior Subordinated Debentures: (a) failure for 30 days to pay any interest on the Junior Subordinated Debentures, including any Additional Interest in respect thereof, when due (subject to the deferral of any due date in the case of an Extension Period); (b) failure to pay any principal on the Junior Subordinated Debentures when due whether at maturity, upon redemption, by declaration of acceleration or otherwise; except that, in the case of an optional redemption, the failure to redeem any Junior Subordinated Debenture which is the result of the Company's failure to deposit on or before the redemption date with the Debenture Trustee (and/or having irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Debentures) an amount in cash sufficient to redeem -40- all of the Junior Subordinated Debentures to be redeemed, shall not be an Event of Default, but shall be deemed a rescission of the call for redemption; (c) failure to observe or perform in any material respect any other covenant relating to such series of Junior Subordinated Debentures contained in the Indenture for 90 days after written notice to the Company from the Debenture Trustee or the holders of at least 25% in principal amount of the outstanding Junior Subordinated Debentures; or (d) certain events in bankruptcy, insolvency or reor- ganization of the Company. (Section 501). If an Event of Default has occurred and is continuing, the holders of a majority in outstanding principal amount of the Junior Subordinated Debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee. (Section 512). The Debenture Trustee or the holders of not less than 25% in aggregate outstanding principal amount of the Junior Subordinated Debentures may declare the principal and interest due and payable immediately upon an Event of Default. In addition, the holders of at least 25% in aggregate Liquidation Amount of the Preferred Securities shall have such right. The holders of a majority in outstanding principal amount of the Junior Subordinated Debentures may annul such declaration and waive the default if the default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any Additional Interest has been deposited with the Debenture Trustee. (Section 502). The holders of a majority in outstanding principal amount of the Junior Subordinated Debentures may, on behalf of the holders of all the Junior Subordinated Debentures, waive any past default, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debenture. (Section 513). The Company is required to file annually with the Debenture Trustee a certificate as to whether or not the Company is in compliance with all the conditions and covenants applicable to it under the Indenture. (Section 1004). Unless otherwise provided in a Prospectus Supplement, a voluntary or involuntary dissolution of the Issuer prior to the -41- redemption or maturity of the Junior Subordinated Debentures held by such Issuer will not constitute an Event of Default with respect to such Junior Subordinated Debentures. If the Issuer is dissolved, an event the possibility of which the Company and the Issuer consider to be remote, any of the following, among other things, could occur: (i) a distribution of the Junior Subordinated Debentures held by such Issuer to the holders of the Preferred Securities, (ii) a cash distribution to the holders of such Preferred Securities out of the sale of assets of such Issuer, after satisfaction of all liabilities to creditors, or (iii) a permitted redemption at par of the Junior Subordinated Debentures, and a consequent redemption of a like amount of such Preferred Securities, at the option of the Company under the circumstances described under "--Optional Redemption" or (iv) the rollover of Trust Property (as defined in the Trust Agreement) into another entity with similar characteristics. Form, Exchange and Transfer The Junior Subordinated Debentures, if issued in certificated form, will be issuable only in registered form, without coupons and only in denominations of $25 and integral multiples thereof. (Section 302). Subject to the terms of the Indenture, Junior Subordinated Debentures may be presented for registration of transfer or exchange (duly endorsed or accompanied by satisfactory instruments of transfer) at the office of the securities 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 Junior Subordinated Debentures, 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 securities registrar or such transfer agent, as the case may be, being satisfied with the documents of transfer, title and identity of the person making the request. The Company has appointed the Debenture Trustee as the initial securities registrar. (Section 305). The Company may at any time designate additional transfer agents, rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts. (Section 1002). If the Junior Subordinated Debentures are to be redeemed in part, the Company will not be required to issue, register the transfer of or exchange any Junior Subordinated Debentures during a period beginning at the opening of business 15 days before the day of mailing of the notice of redemption for such Junior Subordinated Debentures that may be selected for redemption and ending -42- at the close of business on the day of such mailing. (Section 305). Payment and Paying Agents Payment of interest on a Junior Subordinated Debenture on any interest payment date will be made to the person in whose name such Junior Subordinated Debenture (or one or more predecessor Junior Subordinated Debentures) is registered at the close of business on the regular record date for such interest. (Section 307). Principal of and any interest on the Junior Subordinated Debentures 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 by check mailed to the address of the person entitled thereto as such address appears in the securities register or by wire transfer. The corporate trust office of the Debenture Trustee in the City of Wilmington, Delaware is designated as the Company's initial sole Paying Agent for payments with respect to the Junior Subordinated Debentures. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts. (Section 1002). Supplemental Indentures, Modification of the Indenture From time to time the Company and the Debenture Trustee may, without the consent of the holders of the Junior Subordinated Debentures, amend, waive or supplement the Indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act, or making any other change that does not adversely affect the rights of any holder of Junior Subordinated Debentures. (Section 901). The Indenture will contain provisions permitting the Company and the Debenture Trustee, with the consent of the holders of not less than a majority in principal amount of the Junior Subordinated Debentures, to modify the Indenture in a manner affecting the rights of the holders of such Junior Subordinated Debentures; provided that no such modification may, without the consent of the holder of each outstanding Junior Subordinated Debenture so affected, (i) change the fixed maturity of the Junior Subordinated Debentures, reduce the principal amount thereof, or reduce the rate or extend the time for payment of interest thereon (otherwise than as permitted under the Indenture), (ii) reduce the percentage of the principal amount of Junior Subordinated Debentures, the holders of which are required to consent to any such modification -43- of the Indenture or (iii) modify certain provisions of the Indenture relating to the waiver of past defaults or compliance by the Company with certain covenants set forth therein. The Indenture also requires the consent of the holders of the affected Preferred Securities, if any, in respect of certain amendments to or termination of the Indenture and in respect to compliance by the Company with certain covenants in the Indenture. (Section 902). In addition, the Company and the Debenture Trustee may execute, without the consent of any holders of Junior Subordinated Debentures, Supplemental Indentures for the purpose of creating new series of Junior Subordinated Debentures. (Section 901). Consolidation, Merger and Sale The Company may not consolidate with, merge into, or convey, transfer or lease its properties and assets substantially as an entirety to, any person (a "Successor Person"), and may not permit any person to merge into, or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless: (i) the Successor Person (if any) is a corporation, partnership, trust or other entity organized and validly existing under the laws of any United States jurisdiction and assumes the Company's obligations on the Junior Subordinated Debentures, the Indenture, the Guarantee and the Expense Agreement; (ii) immediately after giving effect to the transaction and treating any indebtedness which becomes an obligation of the Company or any subsidiary as a result of the transaction as having been incurred by it at the time of the transaction, no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing; (iii) such transaction does not give rise to any breach or violation of the Trust Agreement or the Guarantee; and (iv) the Company has delivered to the Debenture Trustee an Officers' Certificate and an Opinion of Counsel as to certain matters. (Section 801). Satisfaction and Discharge Under the terms of the Indenture, the Company will be discharged from any and all obligations in respect of the Junior Subordinated Debentures (except, in each case, for certain obligations to register the transfer or exchange of such Junior Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated Debentures and hold moneys or U.S. Government Obligations (as defined in the Indenture) for payment in trust) if the Company deposits with the Debenture Trustee, in trust, moneys or U.S. Government Obligations in an amount sufficient to pay all the principal of, and interest on, such Junior Subordinated Debentures on the dates such payments are due in accordance with the terms of such Junior Subordinated Debentures. (Section 401). -44- Governing Law The Indenture, any Supplemental Indenture and the Junior Subordinated Debentures will be governed by, and construed in accordance with, the laws of the State of New York. (Section 112). Miscellaneous The Company will have the right at all times to assign any of its rights or obligations under the Indenture to a direct or indirect wholly-owned subsidiary of the Company, provided that, in the event of any such assignment, the Company will remain liable for such obligations. Subject to the foregoing, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. (Section 109). RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE As long as payments of interest and other payments are made when due on the Junior Subordinated Debentures, such payments will be sufficient to cover distributions and other payments due on the Preferred Securities because: (i) the aggregate principal amount of the Junior Subordinated Debentures will be equal to the sum of the aggregate stated Liquidation Amount of the Issuer Securities; (ii) the interest rate and interest and other payment dates on the Junior Subordinated Debentures will correspond to the distribution rate and distribution and other payment dates on the Preferred Securities; (iii) the Expense Agreement entered into by the Company pursuant to the Trust Agreement provide that the Company shall pay for all, and the Issuer shall not be obligated to pay, directly or indirectly, for any, costs, expenses or liabilities of such Issuer, including any income taxes, duties and other governmental charges, and all costs and expenses with respect thereto, to which such Issuer may become subject, except for United States withholding taxes and such Issuer's payment obligations to holders of the Preferred Securities under such Preferred Securities; and (iv) the Trust Agreement further provides that the Trustees shall not cause or permit the Issuer to, among other things, engage in any activity that is not consistent with the limited purposes of the Issuer. The Company's obligations under the Guarantee, the Trust Agreement, the Expense Agreement, the Junior Subordinated Debentures and the Indenture constitute, in the aggregate, a full and unconditional guarantee with respect to the Preferred Securities. -45- Payments of distributions and other amounts due on Preferred Securities (to the extent the Issuer has funds sufficient for the payment of such distributions) are guaranteed by the Company as and to the extent set forth under "Description of Guarantee." If and to the extent that the Company does not make payments on the Junior Subordinated Debentures, the Issuer will not pay distributions or other amounts due on the Preferred Securities. A holder of a Preferred Security to which such Guarantee applies may institute a legal proceeding directly against the Company to enforce such holder's rights under such Guarantee without first instituting a legal proceeding against the Issuer of such Preferred Security or any other person or entity. In addition, if the Company defaults on its obligations under the Indenture, the holders of at least 25% in the aggregate Liquidation Amount of the Preferred Securities then outstanding shall have the right to enforce the rights of the Issuer under the Junior Subordinated Debentures. The Preferred Securities will evidence the rights of the holders thereof to the benefits of the Issuer, a trust that exists for the sole purpose of issuing its Issuer Securities and investing the proceeds of its Preferred Securities in the corresponding Junior Subordinated Debentures of the Company, while the Junior Subordinated Debentures represents indebtedness of the Company. A principal difference between the rights of a holder of a Preferred Security and a holder of a Junior Subordinated Debenture is that a holder of a Junior Subordinated Debenture will accrue, and (subject to the permissible extensions of the interest payment period) is entitled to receive, interest on the principal amount of Junior Subordinated Debentures held, while a holder of Preferred Securities is only entitled to receive distributions if and to the extent the Issuer has funds sufficient for the payment of such distributions. Upon any voluntary or involuntary dissolution, winding-up or termination of the Issuer involving the distribution of Junior Subordinated Debentures, the holders of Preferred Securities will be entitled to receive, out of assets legally available for distribution to such holders, the Final Distribution or a Liquidation Distribution; provided, however, that if an Event of Default under the Trust Agreement shall have occurred and be continuing, the holders of the Common Securities shall be entitled to receive, out of assets legally available for distribution to such holders, distributions only after the holders of the Preferred Securities. See "Description of the Preferred Securities -- Liquidation Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of the Company, the Issuer, -46- as a holder of Junior Subordinated Debentures, would be a subordinated creditor of the Company, subordinated in right of payment to all Senior Indebtedness, but entitled to receive payment in full of principal and interest before any stockholders of the Company receive any payments or distributions. Since the Company has agreed to pay for all costs, expenses and liabilities of the Issuer (other than United States withholding taxes and other than the Issuer's obligations to the holders of Preferred Securities under the Preferred Securities, which obligations are independently covered by the Guarantee), the positions of a holder of Preferred Securities and a holder of Junior Subordinated Debentures relative to other creditors and to stockholders of the Company in the event of a liquidation or bankruptcy of the Company would be substantially the same. A default or event of default under any Senior Indebtedness will not constitute a default or Event of Default under the Junior Subordinated Debentures. However, in the event of payment defaults under, or acceleration of, Senior Indebtedness, the subordination provisions of the Junior Subordinated Debentures provide that no payments may be made in respect of the Junior Subordinated Debentures until such Senior Indebtedness has been paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on the Junior Subordinated Debentures would constitute an Event of Default under the Indenture. PLAN OF DISTRIBUTION The Preferred Securities may be sold in a public offering to or through underwriters or dealers designated from time to time. The Issuer may sell its Preferred Securities as soon as practicable after the effectiveness of the Registration Statement of which this Prospectus is a part. The names of any underwriters or dealers involved in the sale of the Preferred Securities in respect of which this Prospectus is delivered, the number of Preferred Securities to be purchased by any such underwriters or dealers and the applicable commissions or discounts will be set forth in the applicable Prospectus Supplement. Underwriters may offer and sell Preferred Securities at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Preferred Securities, underwriters will be deemed to have received compensation from the Company and the Issuer in the form of underwriting discounts or commissions. -47- Underwriters may sell Preferred Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters. Any underwriting compensation paid by the Company to underwriters in connection with the offering of the Preferred Securities, and any discounts, concessions or commissions allowed by such underwriters to participating dealers, will be set forth in the applicable Prospectus Supplement. Underwriters and dealers participating in the distribution of Preferred Securities may be deemed to be underwriters, and any discounts and commissions received by them, and any profit realized by them on resale of such Preferred Securities, may be deemed to constitute underwriting discounts and commissions under the Securities Act. Underwriters and dealers may be entitled, pursuant to their agreement with the Company and the Issuer, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by the Company for certain expenses. In connection with the offering of the Preferred Securities, the Issuer thereof may grant to the underwriters an option to purchase additional Preferred Securities to cover over-allot- ments, if any, at the initial public offering price (with an additional underwriting commission), as set forth in the applicable Prospectus Supplement. Underwriters and dealers may engage in transactions with, or perform services for, the Company, the Issuer and any of their respective affiliates. The Issuer's Preferred Securities will be a new issue of securities and will have no established trading market. Any underwriters to whom the Issuer's Preferred Securities are sold by such Issuer for public offering and sale may make a market in such Preferred Securities, but such underwriters will not be obligated to do so and may discontinue any market-making at any time without notice. Such Preferred Securities may or may not be listed on a national securities exchange. No assurance can be given as to the liquidity of or the existence of meaningful trading markets for any Preferred Securities. LEGAL OPINIONS Certain legal matters in connection with the Preferred Securities are being passed upon for the Company and the Issuer by Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P., Amarillo, Texas, and Cahill Gordon & Reindel, a partnership including a -48- professional corporation, New York, New York, and for the Issuer by Richards, Layton & Finger, special Delaware counsel to the Company and the Issuers. Cahill Gordon & Reindel and Richards, Layton & Finger are not passing upon the incorporation of the Company and are relying upon the opinions of Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. as to matters of New Mexico and Texas law; Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma as to matters of Oklahoma law; and Foulston & Siefkin, Topeka, Kansas as to matters of Kansas law. Gary W. Wolf, a partner in the law firm of Cahill Gordon & Reindel, is a director of the Company. EXPERTS The consolidated financial statements of Southwestern Public Service Company and subsidiaries as of August 31, 1995 and 1994 and for the years then ended included in the Company's 1995 Form 10-K, which is incorporated herein by reference, have been audited by Deloitte & Touche LLP ("Deloitte & Touche"), independent certified public accountants, as stated in their report, which is also incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. With respect to any unaudited interim financial information included in the Company's quarterly reports on Form 10-Q that are or will be incorporated herein by reference, Deloitte & Touche applies limited procedures in accordance with professional standards for reviews of such information. As stated in any of its reports that are included in the Company's quarterly reports on Form 10-Q that are or will be incorporated herein by reference, Deloitte & Touche did not audit and did not express an opinion on such interim financial information. Accordingly, the degree of reliance on any of Deloitte & Touche's reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche is not subject to the liability provisions of Section 11 of the Securities Act for any of its reports on such unaudited interim financial information because those reports are not "reports" or a "part" of the Registration Statement filed under the Securities Act with respect to the Preferred Securities or the Junior Subordinated Debentures prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act. The consolidated financial statements of Southwestern Public Service Company and subsidiaries for the year ended August 31, 1993 included in the Company's 1995 Form 10-K, which is incorporated herein by reference, are incorporated herein in reliance upon the report of KPMG Peat Marwick LLP, independent -49- certified public accountants, included in the 1995 Form 10-K, and upon the authority of that firm as experts in accounting and auditing. To the extent that a firm of certified public accountants audits and reports on the financial statements of the Company issued at future dates, and consents to the use of their report thereon, such financial statements also will be incorporated by reference herein in reliance upon their report and said authority. The statements and legal conclusions as to all matters of law in the Company's 1995 Form 10-K, the November Quarterly Report, the February Quarterly Report, the May Quarterly Report and this Prospectus (except as to matters of Kansas and Oklahoma law and United States Federal income tax matters in such documents) have been reviewed by Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. Statements and legal conclusions as to matters of Oklahoma law in such documents have been reviewed by Rainey, Ross, Rice & Binns. Statements and legal conclusions as to matters of Kansas law in such documents have been reviewed by Foulston & Siefkin. Statements and legal conclusions in the accompanying Prospectus Supplement as to United States Federal income tax matters have been reviewed by Cahill Gordon & Reindel. All such statements and legal conclusions are set forth in such documents and incorporated by reference herein or set forth herein in reliance upon said firms, respectively, as experts. -50- No dealer, salesman, or any other person has been authorized to give 4,000,000 any information or to make any PREFERRED SECURITIES representations other than those contained in this Prospectus, including any prospectus supplement in connection with the offer contained in this Prospectus, and, if given or made, such information or SOUTHWESTERN PUBLIC representations must not be relied SERVICE CAPITAL I upon as having been authorized by the Company or any underwriter, (Liquidation Amount dealer, or agent. This Prospectus $25 per Preferred does not constitute an offer to Security) sell or a solicitation of an offer to buy any of these securities in ___% Trust any jurisdiction to any person to Preferred Securities, whom it is unlawful to make such Series A offer or solicitation in such juris- diction. Neither the delivery of Fully and this Prospectus nor any sale made Unconditionally hereunder shall, under any circum- Guaranteed by stances, create any implication that there has been no change in SOUTHWESTERN PUBLIC the affairs of the Company since SERVICE COMPANY the date hereof. --------------- TABLE OF CONTENTS Prospectus Supplement Page Prospectus Summary.................. S-6 Risk Factors ....................... S-7 Southwestern Public Service Capital I.......................... S-11 Recent Developments................. S-13 Use of Proceeds..................... S-14 Certain Terms of the Preferred Securities ............. S-15 Certain Terms of the Guarantee ........................ S-20 Certain Terms of the Junior Subordinated Debentures .......... S-21 United States Taxation ............. S-23 Underwriting ....................... S-28 Prospectus Available Information............... 3 -51- Incorporation of Certain Documents by Reference............ 3 The Company......................... 4 The Issuer.......................... 5 Recent Developments................. 6 Use of Proceeds..................... 7 Earnings Ratios..................... 7 Description of Preferred Securities........................ 8 Description of Guarantee............ 26 Description of Junior Subordinated Debentures........... 29 Relationship Among the Preferred Securities, the Junior Subordinated Debentures and the Guarantee................. 45 Plan of Distribution................ 47 Legal Opinions...................... 48 Dated , 1996 Experts............................. 49 -52- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Set forth below is an estimate (except for the Securities and Exchange Commission registration fee) of the fees and expenses payable by the Company in connection with the distribution of the Preferred Securities. Securities and Exchange Commission Registration Fee ........................................ $ 34,482.76 Listing Fee ............................................... 50,000.00 Counsel Fees and Expenses ................................. 220,000.00 Services of Independent Accountants ....................... 40,000.00 Trustee's Fees and Expenses ............................... 25,000.00 Printing Expenses, including Engraving .................... 150,000.00 Rating Agency Fees ........................................ 100,000.00 Blue Sky Fees and Expenses ................................ 10,000.00 Miscellaneous Expenses .................................... 10,517.24 --------- Total ......................................... $ 640,000.00 -------------- Item 15. Idemnification of Directors and Officers. Section 53-11-4.1 of the New Mexico Business Corporation Act (the "NMBCA") empowers a corporation to indemnify any officer or director against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the person in connection with any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, if the person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to a criminal proceeding, had no reasonable cause to believe the person's conduct was unlawful. This section empowers a corporation to maintain insurance or furnish similar protection, including, but not limited to, providing a trust fund, a letter of credit, or self-insurance, on behalf of any officer or director against any liability asserted against the person in such capacity whether or not the corporation would have the power to indemnify the person against such liability under the provisions of this section. II-1 The indemnification authorized by Section 53-11-4.1 is not exclusive of any other rights to which an officer or director may be entitled under the articles of incorporation, the bylaws, an agreement, a resolution of shareholders or directors or otherwise. Article Sixth of the Restated Articles of Incorporation of the Company provides that a director of the Company shall not be personally liable to the Company or to the shareholders for monetary damages for a breach of fiduciary duty as a director unless such director has breached or failed to perform the duties of his or her office in accordance with the NMBCA, and the breach or failure to perform constitutes negligence, willful misconduct, or recklessness. Article IV of the Bylaws of the Company requires the Company, to the fullest extent permitted by the NMBCA, to pay or reimburse expenses, liabilities, and losses incurred by an officer or director involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative by reason of the fact that such person is or was serving as an officer or director of the Company. The Bylaws also require the Company to pay or reimburse all covered expenses to an officer or director promptly upon receipt of a written claim and, where the claimant seeks an advancement of expenses, an undertaking by or on behalf of the person to repay such amounts if it should ultimately be determined by a court of final jurisdiction that such person is not entitled to indemnification. The Company has entered into indemnity agreements with each officer and director of the Company. These contracts provide for the advancement of expenses (including attorneys' fees) incurred or to be incurred by an officer or director in connection with a proceeding. The contracts also provide for indemnification of such persons against expenses, liabilities, and losses. Pursuant to each director's indemnity agreement, the Company keeps in effect a letter of credit in the face amount of $5,000,000 obtained from a commercial bank for the benefit of all directors who are a party to an indemnity agreement. A director who has incurred or may incur expenses in connection with a proceeding prior to the final disposition of such a proceeding for any reason may request an independent trustee to draw upon the letter of credit for the payment or advancement II-2 of such expenses. Upon such request, the trustee will draw upon the letter of credit and deliver such funds to such director. The Company is insured up to $25,000,000 against loss in excess of $200,000 because of any claim made against the Company or its officers or directors and alleged to have been caused by any negligent act, error, omission, or breach of duty by its officers or directors. The insurance is subject to certain exclusions. Item 16. Exhibits. Reference is made to the Exhibit Index filed as part of this Registration Statement. Item 17. Undertakings. 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, as amended (the "Securities Act"); (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 being 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% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; II-3 (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 (1)(i) and (1)(ii) do not apply if the Registration Statement is on Form S-3 or Form S-8, and 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 (the "1934 Act") that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, 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. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, 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 Securities 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 II-4 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 Securities Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Southwestern Public Service Company, the Registrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, there- under duly authorized, in the City of Amarillo, and the State of Texas, on the 12th day of August, 1996. SOUTHWESTERN PUBLIC SERVICE COMPANY (Registrant) By: * -------------------------------- Bill D. Helton Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- Principal Executive and Chairman of the August 12, 1996 Financial Officer and Board and Chief Director: Executive Officer * - ----------------------------- Bill D. Helton Principal Accounting Officer: Executive Vice August 12, 1996 President, Accounting and Corporate Development /s/ Doyle R. Bunch II - ----------------------------- Doyle R. Bunch II Directors: Gene H. Bishop* ) C. Coney Burgess* ) J. C. Chambers* ) Danny H. Conklin* ) Giles M. Forbess* ) Directors August 12, 1996 R. R. Hemminghaus* ) Don Maddox* ) J. Howard Mock* ) Shirley Bird Perry* ) David M. Wilks* ) Gary W. Wolf* ) *The undersigned, by signing his name hereto, does sign and execute this Amendment No. 1 to the Registration Statement pursuant to the Powers of Attorney executed by the above-named officers and directors of the Company and which are being filed herewith with the Securities and Exchange Commission on behalf of such officers and directors. By: /s/ Doyle R. Bunch II -------------------------- Doyle R. Bunch II Attorney-in-Fact Pursuant to the requirements of the Securities Act of 1933, as amended, Southwestern Public Service Capital I, the Registrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Amarillo, and the State of Texas, on the 12th day of August, 1996. SOUTHWESTERN PUBLIC SERVICE CAPITAL I (Registrant) By: /s/David M. Wilks ---------------------------- David M. Wilks, President and Chief Operating Officer of Southwestern Public Service Company, as Depositor INDEX TO EXHIBITS Exhibit Number Exhibit - ------ ------- ** 1(a) - Form of Underwriting Agreement relating to the Preferred Securities. ** 4(a) - Form of Indenture. ** 4(b) - Form of Supplemental Indenture. 4(c) - Form of Debenture (included in Exhibit 4(b)). 4(d) - Form of Preferred Security (included as Exhibit G to Exhibit 4(h)). ** 4(e) - Form of Guarantee Agreement. * 4(f) - Certificate of Trust for Southwestern Public Service Capital I. * 4(g) - Trust Agreement for Southwestern Public Service Capital I. ** 4(h) - Form of Amended and Restated Trust Agreement. ** 5(a) - Opinion of Hinckle, Cox, Eaton, Coffield & Hensley, L.L.P. relating to the legality of the Debentures and the Guarantee. ** 5(b) - Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred Securities of Southwestern Public Service Capital I. ** 8 - Opinion of Cahill Gordon & Reindel, as to tax matters. 10 - Form of Expense Agreement (included as Exhibit F in Exhibit 4(h)). 12 - Statements re Computation of Ratios of Earnings to Fixed Charges (incorporated by reference to exhibit 12 Form 10-K for 1995 and exhibit 12 Form 10-Q for quarter ended May 31, 1996). ** 15 - Letter re Unaudited Interim Financial Information. **23(a) - Consent of Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. (included in Exhibit 5(a)). **23(b) - Consent of Richards, Layton & Finger (included in Exhibit 5(b)). **23(c) - Consent of Cahill Gordon & Reindel (included in Exhibit 8). **23(d) - Consent of Foulston & Siefkin. **23(e) - Consent of Rainey, Ross, Rice & Binns. * 23(f) - Consent of Deloitte & Touche LLP, independent certified public accountants. * 23(g) - Consent of KPMG Peat Marwick LLP, independent certified public accountants. * 24 - Powers of Attorney. Exhibit Number Exhibit - ------ ------- **25(a) - Statement of Eligibility under the Trust Indenture Act of 1939 (on Form T-1) of Debenture Trustee. **25(b) - Statement of Eligibility under the Trust Indenture Act of 1939 (on Form T-1) of Property Trustee. **25(c) - Statement of Eligibility under the Trust Indenture Act of 1939 (on Form T-1) of Guarantee Trustee. - -------------------- * Previously filed. ** Filed herewith. -2- EX-1 2 UNDERWRITING AGREEMENT Preferred Securities Southwestern Public Service Capital I ____% Trust Preferred Securities, Series A (liquidation amount $25 per preferred security) guaranteed on a subordinated basis by Southwestern Public Service Company --------------------------- Underwriting Agreement ____________, 199_ [NAMES OF REPRESENTATIVES] As representatives of the several Underwriters named in Schedule I hereto Ladies and Gentlemen: Southwestern Public Service Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), and Southwestern Public Service Company, a New Mexico corporation, as depositor of the Trust and as guarantor (the "Guarantor"), propose, subject to the terms and conditions stated herein, that the Trust issue and sell to the Underwrit- ers named in Schedule I hereto (the "Underwriters"), an aggre- gate of $________ _____ % Trust Preferred Securities (liquida- tion amount $25 per preferred security) representing beneficial interests in the Trust (the "Securities"), guaranteed on a sub- ordinated basis by the Guarantor as to the payment of distribu- tions, and as to payments on liquidation or redemption, to the extent set forth in a guarantee agreement (the "Guarantee") between the Guarantor and Wilmington Trust Company, as trustee (the "Guarantee Trustee"). The Trust is to purchase, with the proceeds of the Securities and with its Common Securities (liquidation amount $25 per common security) (the "Common Secu- rities"), an aggregate of $___________ ___% Junior Subordinated Debentures, Series A, Due ____ (the "Subordinated Debentures") of the Guarantor, to be issued pursuant to an Indenture (the "Indenture") between the Guarantor and Wilmington Trust Com- pany, as trustee (the "Debenture Trustee"). The payments made by the Guarantor on the Subordinated Debentures are established at a level sufficient to permit the Trust, upon receipt of such payments, to make payments on the Securities in accordance with their tenor. -2- A registration statement on Form S-3 (File No. 333-05289) in respect of the Securities, the Subordinated Debentures and the Guarantee (collectively, the "Registered Securities") has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"); such registration statement, in the form heretofore delivered to you and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, to you for each of the other Underwriters, have been declared effective by the Commis- sion in such form; no other document with respect to such reg- istration statement or document incorporated by reference therein has heretofore been filed, or transmitted for filing, with the Commission (any preliminary prospectus included in such registration statement or thereafter filed with the Com- mission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act, being hereinafter called a "Pre- liminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including at the time it was declared effective the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the "Registration Statement"; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus"; any ref- erence herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorpo- rated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amend- ment or supplement to any Preliminary Prospectus or the Pro- spectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospec- tus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by ref- erence in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Regis- tration Statement shall be deemed to refer to and include any annual report of the Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). -3- 1. Each of the Trust and the Guarantor jointly and severally represents and warrants to, and agrees with, each of the Underwriters that: (a) When the Registration Statement became effective, the Registration Statement complied in all material respects, and, when the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, the Prospectus will comply in all material respects, with the provisions of the Act, and that neither will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not mis- leading; provided, however, that neither the Trust nor the Guarantor makes any warranty or represen- tation with respect to any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon and in conformity with information furnished in writ- ing by or on behalf of any Underwriter through you to the Trust or the Guarantor expressly for use with reference to the Underwriter in the Registra- tion Statement or Prospectus; (b) The documents incorporated by reference in the Prospectus comply in all material respects with the requirements of the Exchange Act and any additional documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading; (c) The Trust has been duly created and is validly existing as a statutory business trust in good standing under the Business Trust Act of the State of Delaware with the power and authority to own property and conduct its business as described in the Prospectus, and has conducted and will con- duct no business other than the transactions con- templated by this Agreement and as described in -4- the Prospectus; the Trust is not a party to or bound by any agreement or instrument other than this Agreement, the Amended and Restated Trust Agreement (the "Trust Agreement") between the Guarantor and the trustees named therein (the "Trustees") and the agreements and instruments contemplated by the Trust Agreement and the Pro- spectus; the Trust has no liabilities or obliga- tions other than those arising out of the transac- tions contemplated by this Agreement and the Trust Agreement and described in the Prospectus; and the Trust is not a party to or subject to any action, suit or proceeding of any nature; (d) All of the outstanding beneficial inter- ests in the Trust have been duly authorized and issued, are fully paid and non-assessable and con- form to the descriptions thereof contained in the Prospectus; (e) The Common Securities have been duly authorized by the Depositor of the Trust and upon delivery by the Trust to the Guarantor against payment therefor as described in the Prospectus, will be duly and validly issued and non-assessable beneficial interests in the Trust and will conform to the description thereof contained in the Pro- spectus; the issuance of the Common Securities is not subject to preemptive or other similar rights; and at the Time of Delivery, all of the issued and outstanding Common Securities of the Trust will be directly owned by the Guarantor free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; (f) The Securities have been duly authorized by the Depositor of the Trust, and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and non- assessable beneficial interests in the Trust and will conform in all material respects to the description thereof contained in the Prospectus; and the holders of the Securities (the "Securityholders") will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the -5- State of Delaware (subject to the obligations of the Securityholders under the Trust Agreement to make certain payments to the Trust to defray expenses such as any applicable transfer and stamp taxes and to provide security or indemnity in con- nection with the replacement of destroyed, lost or stolen certificates or in connection with direct- ing the Property Trustee under the Trust Agreement to exercise its rights and powers at the request of Securityholders); and (g) The Guarantee, the Subordinated Deben- tures, the Trust Agreement and the Indenture (the Guarantee, the Subordinated Debentures, the Trust Agreement and the Indenture being collectively referred to as the "Guarantor Agreements") have each been duly authorized and when validly exe- cuted and delivered by the Guarantor and, in the case of the Guarantee, by the Guarantee Trustee, in the case of the Trust Agreement, by the Trust- ees (as defined in the Trust Agreement) and, in the case of the Indenture, by the Debenture Trus- tee, and, in the case of the Subordinated Deben- tures, when validly issued by the Guarantor and validly authenticated and delivered by the Deben- ture Trustee, will constitute valid and legally binding obligations of the Guarantor, enforceable in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, fraudu- lent conveyance, reorganization, moratorium and other similar laws relating to or affecting credi- tors' rights generally, general equitable princi- ples (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; the Trust Agreement, the Inden- ture and the Guarantee have been duly qualified under the Trust Indenture Act of 1939, as amended; the Subordinated Debentures are entitled to the benefits of the Indenture; and the Guarantor Agreements will conform to the descriptions thereof in the Prospectus. 2. Subject to the terms and conditions herein set forth, the Trust and the Guarantor agree that the Trust shall issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at a purchase price of $25 per preferred -6- security, the number of Securities set forth opposite the name of such Underwriter in Schedule I hereto. As compensation to the Underwriters for their commit- ments hereunder, and in view of the fact that the proceeds of the sale of the Securities will be used by the Trust to pur- chase the Subordinated Debentures of the Guarantor, the Guaran- tor hereby agrees to pay at the Time of Delivery (as defined in Section 4 hereof) to ____________________, for the accounts of the several Underwriters, an amount equal to $0._______ per Security sold to [noninstitutional purchasers] and $0._______ per Security sold to [institutional purchasers] for the Securi- ties to be delivered at the Time of Delivery. 3. Upon the authorization by you of the release of the Securities, the several Underwriters propose to offer the Securities for sale upon the terms and conditions set forth in the Prospectus. 4. (a) The Securities to be purchased by each Underwriter hereunder, in definitive form, and in such autho- rized denominations and registered in such names as ____________________ may request upon at least forty-eight hours' prior notice to the Guarantor, shall be delivered by or on behalf of the Trust to ____________________, through the facilities of The Depository Trust Company ("DTC"), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor, by certified or official bank check or checks, payable to the order of the Trust, in [Federal (same day)] [New York Clearing House (next day)] funds. The Trust will cause the certificates represent- ing the Securities to be made available for checking and pack- aging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the "Designated Office"). The time and date of such delivery and payment shall be, with respect to Securities, 9:30 a.m., New York time, on _________, 199_ or such other time and date as ____________________ and the Guar- antor may agree upon in writing. Such time and date for deliv- ery of the Securities is herein called the "Time of Delivery." At the Time of Delivery, the Guarantor will pay, or cause to be paid, the commission payable at such Time of Deliv- ery to the Underwriters under Section 2 hereof by certified or official bank check or checks, payable to the order of ____________________, in [same day] [New York Clearing House (next day)] funds. -7- (b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Sec- tion 6 hereof, including the cross-receipt for the Securities and the checks specified in subsection (a) above, will be delivered at the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, NY 10005 (the "Closing Location"), and the Securities will be delivered at the Designated Office, all at the Time of Delivery. A meeting will be held at the Closing Location at 2:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pur- suant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking insti- tutions in New York are generally authorized or obligated by law or executive order to close. 5. The Trust and the Guarantor jointly and sever- ally agree with each of the Underwriters: (a) As soon as possible after the execution and delivery of this Agreement to file, or mail for filing, the Prospectus with the Commission pursuant to its Rule 424 under the Act and, if and when required at any time after such execution and delivery, to file amendments to the applications the Guarantor has previously filed with any state regulatory agencies having jurisdiction to govern the Guarantor's issuance of its securities setting forth, among other things, the necessary informa- tion with respect to the price and the terms of the Securities and the terms of offering of the Securities; (b) To file no amendment or supplement to the Registration Statement or Prospectus (other than a required filing under the Exchange Act) subsequent to the execution of this Agreement and prior to the Time of Delivery to which you object in writing; (c) To furnish such proper information as may be required and otherwise to cooperate in qualifying the Securities for sale under the laws of such jurisdictions as you may designate and in determining their eligibility for investment under -8- the laws of such jurisdictions; provided that nei- ther the Trust nor the Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (d) To the extent not previously furnished to you, to furnish to you two signed copies of the Registration Statement, as initially filed with the Commission, of all amendments thereto, and of all documents incorporated by reference therein (including all exhibits filed therewith, other than exhibits which have previously been furnished to you), two signed copies of each consent and certificate of independent accountants and of each other person who by his profession gives authority to statements made by him and who is named in the Registration Statement as having prepared, certi- fied or reviewed any part thereof, and to furnish to you sufficient unsigned copies of the foregoing (other than exhibits, including consents filed as exhibits, to the Registration Statement) for dis- tribution of a copy to you and to each of the other Underwriters; (e) To deliver to the Underwriters without charge in New York City as soon as practicable after the execution and delivery of this Agreement and thereafter from time to time to furnish to the Underwriters, without charge, as many copies of the Prospectus in final form and any documents incorporated by reference therein at or after the date thereof (or as amended or supplemented, if the Trust and the Guarantor shall have made any amendment or supplement after the effective date of the Registration Statement) as you or the respective Underwriters may reasonably request for the purposes contemplated by the Act; (f) To advise you promptly (confirming such advice in writing) of any official request made by the Commission for amendments to the Registration Statement or Prospectus or for additional informa- tion with respect thereto, or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effectiveness of the Registration Statement and, if such order -9- should be entered by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible, or of the suspension of qualification of the Securities for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; (g) To apply the net proceeds from the sale of the Securities in the manner set forth in the Prospectus; (h) In the case of the Guarantor, to furnish to you during a period of five years from the Time of Delivery (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year, (ii) from time to time, copies of any reports or other com- munications which it shall file with the Commis- sion or any governmental agency substituted there- for under the Exchange Act or sent to its stock- holders, or holders of the Securities, and (iii) such other information as you may from time to time reasonably request regarding the financial condition and operations of the Guarantor; (i) To furnish to any other Underwriter cop- ies of such of the financial statements, reports or other information referred to in the foregoing subparagraphs (h)(i) and (ii) as such Underwriter may, from time to time during the period you are entitled to receive them, request; (j) To advise the Underwriters of the hap- pening of any event known to the Trust or the Guarantor within the time during which a prospec- tus relating to the Securities is required to be delivered under the Act which, in the judgment of the Trust or the Guarantor, would require the mak- ing of any change in the Prospectus or any amended or supplemented Prospectus or in the information incorporated by reference therein so that as thereafter delivered to purchasers such Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, -10- not misleading, and on request to prepare and fur- nish to the Underwriters and to dealers and other persons designated by you such amendments or sup- plements (including appropriate filings under the Exchange Act) to the Prospectus as may be neces- sary to reflect any such change, provided that the Trust and the Guarantor shall be so obligated only so long as they are notified of unsold allotments (failure by the Underwriters to so notify the Trust and the Guarantor cancels their obligation under this Section 5(j)); (k) In the case of the Guarantor, as soon as practicable, to make generally available to its security holders an earnings statement (as contem- plated by Rule 158 under the Act) covering a period of twelve months after the effective date of the Registration Statement; (l) To furnish to you as early as practi- cable prior to the Time of Delivery, but no later than two business days prior thereto, a copy of the latest available unaudited interim consoli- dated financial statements, if any, of the Guaran- tor which have been read by the Guarantor's inde- pendent public accountants as stated in their let- ter to be furnished pursuant to Section 7(a) of this Agreement; (m) If a public offering of the Securities is to be made, not to offer, sell, contract to sell or otherwise dispose of any securities, any other beneficial interests of the Trust, or any preferred securities or any other securities of the Trust or the Guarantor, as the case may be, that are substantially similar to the Securities (including any guarantee of such securities) or any securities that are convertible into or exchangeable for, or that represent the right to receive securities, preferred securities or any such substantially similar securities of either the Trust or the Guarantor for a period of thirty days after the Time of Delivery without your con- sent; and -11- (n) To use its best efforts to list, subject to notice of issuance, the Securities on the New York Stock Exchange. 6. The Guarantor covenants and agrees with each of the Underwriters that it will pay the following: (i) the fees and expenses of counsel for the Underwriters, and to reimburse the Underwriters for their reasonable out-of- pocket expenses incurred in contemplation of the performance of this Agreement, in the event that the Securities are not delivered to and taken up and paid for by the Underwriters hereunder for any reason whatsoever except the failure or refusal of any Underwriter to take up and pay for Securities for some reason not permitted by the terms of this Agree- ment, the Underwriters agreeing to pay the fees and expenses of counsel for the Underwriters in any other event, (ii) the fees and expenses in connection with preparation and filing of the Registration Statement, each Preliminary Prospectus and the Prospectus, any documents incorporated by reference therein at or after the date thereof and any amendments or supplements thereto, and the printing or reproduction and furnishing of copies of each thereof to the Underwriters and to dealers, (iii) the fees and expenses relating to the issue, sale and delivery of the Securities (other than transfer taxes), (iv) the cost of printing or producing this Agreement, the Trust Agreement, the Guarantee and the opin- ions and letters referred to in Section 7(a) hereof, (v) all expenses in connection with the qualification of the Securi- ties for sale and determination of their eligibility for investment under state laws as aforesaid, including the rea- sonable legal fees and all filing fees and disbursements of counsel for the Underwriters and all other filing fees, and the printing or reproduction and furnishing of copies of the "Blue Sky Survey" and the "Legal Investment Survey" to the Underwriters and to dealers, (vi) the fees charged by secu- rities ratings services for rating the Securities, (viii) all fees and expenses in connection with the listing of the Securities on the New York Stock Exchange and the cost of registering the Securities under Section 12 of the Exchange Act, (ix) all fees and expenses of the Trustees, the Deben- ture Trustee and the Guarantor Trustee, and (ix) the fees and expenses incident to the performance of the Trust's and the Guarantor's other obligations hereunder; 7. The obligations of the Underwriters hereunder, as to the Securities to be delivered at the Time of Delivery, shall be subject, in their discretion, to the condition that -12- all representations and warranties and other statements of the Trust and the Guarantor herein are, at and as of the Time of Delivery, true and correct in all material respects and the following additional conditions: (a) That, at the Time of Delivery, you shall receive the signed opinions of Hinkle, Cox, Eaton, Coffield & Hensley and Cahill Gordon & Reindel, counsel for the Guarantor; such other counsel to the Guarantor as you may reasonable request; Richards, Layton & Finger, special Delaware counsel to the Trust and the Guarantor; and counsel for the Underwriters, substantially in the forms heretofore furnished to you, addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); and that, at the Time of Delivery, you shall receive the signed letters of the independent public accountants of the Company, substantially in the form heretofore furnished to you and in substance satisfactory to you addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); (b) That, at or before 5:30 P.M. on the date hereof, or at such later time and day as you may have from time to time consented to in writing or by telephone, confirmed in writing, the orders of the New Mexico Public Utility Commission, neces- sary to permit the issue, sale and delivery of the Securities shall have been issued; at the Time of Delivery such orders shall be in full force and effect; and prior to such Time of Delivery no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act by the Commission and at such Time of Delivery no proceedings therefor shall be pend- ing or threatened; (c) That, at the time the Registration Statement became effective, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that at the Time of Delivery the Prospectus shall not con- tain an untrue statement of a material fact or -13- omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon, and in conformity with, informa- tion furnished in writing by or on behalf of any Underwriter through you to the Trust or the Guar- antor expressly for use with reference to such Underwriter in the Registration Statement or Prospectus; (d) That, subsequent to the respective dates as of which information is given in the Registra- tion Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for fil- ing, pursuant to Rule 424 under the Act, and prior to the Time of Delivery, in your opinion no mate- rial adverse change, or any development involving a prospective material adverse change, in the con- dition of the Guarantor, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time); (e) That the Trust and the Guarantor shall have performed all of their obligations under this Agreement which are to be performed by the terms hereof at or before the Time of Delivery; and (f) That the Guarantor shall, at the Time of Delivery, deliver to you (with reproduced or con- formed copies thereof for each of the other Under- writers) a signed certificate of two of its execu- tive officers stating that, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospec- tus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the Time of Delivery, no mate- rial adverse change, or any development involving a prospective material adverse change, in the con- dition of the Guarantor, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time) and also covering -14- the matters set forth in (c) and (e) of this Section 7; and (g) The Securities to be sold by the Trust at the Time of Delivery shall have been duly listed, subject to notice of issuance, on the New York Stock Exchange. 8. The obligations of the several Underwriters hereunder shall be subject to termination in your absolute dis- cretion, if, at any time prior to the Time of Delivery, trading in securities on the New York Stock Exchange shall have been suspended (other than a temporary suspension to provide for an orderly market) or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if after the execution of this Agreement the United States shall have declared war in accor- dance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such mag- nitude in its effect on the financial markets of the United States as, in your judgment, to make it impracticable to market the Securities. If you elect to terminate this Agreement as provided in this Section 8, the Trust, the Guarantor and each other Underwriter shall be notified promptly in writing or by tele- phone, confirmed in writing. If the sale to the Underwriters of the Securities as herein contemplated is not carried out by the Underwriters for any reason permitted hereunder or if such sale is not carried out because the Trust and the Guarantor shall be unable to com- ply with any of the terms thereof, the Trust and the Guarantor shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 6, 9(a) and 9(c) hereof), and the Underwriters shall be under no obli- gation or liability to the Company (except to the extent pro- vided in Sections 9(b) and 9(c) hereof) or to one another under this Agreement. 9. (a) The Trust and the Guarantor agree, jointly and severally, to indemnify and hold harmless each Underwriter, and any person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any loss, expense, liability or claim which -15- arises out of or is based upon any alleged untrue statement of a material fact in the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus, or arises out of or is based upon any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not mislead- ing. The foregoing shall not cover any such loss, expense, liability or claim, however, which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Trust or the Guarantor expressly for use with reference to the Under- writer in, any such documents or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in any such docu- ments or necessary to make such information not misleading. If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Trust and the Guarantor pursuant to the foregoing paragraph, such Underwriter shall promptly notify the Trust and the Guarantor in writing or by telephone, confirmed in writing, of the institution of such action and the Trust and the Guaran- tor shall assume the defense of such action, including the employment of counsel and payment of expenses. Such Under- writer or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Under- writer or such controlling person unless the employment of such counsel shall have been authorized in writing by the Trust and the Guarantor in connection with the defense of such action or the Trust and the Guarantor shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Trust or the Guarantor (in which case the Trust and the Guarantor shall not have the right to direct the defense of such action on behalf of the indem- nified party or parties), in any of which events such fees and expenses of one counsel for all indemnified parties selected by you shall be borne by the Trust and the Guarantor. Anything in this paragraph to the contrary notwithstanding, neither the Trust nor the Guarantor shall be liable for any settlement of any such claim or action effected without its written consent. The Trust's and the Guarantor's indemnity agreements contained in this Section 9(a) and their warranties and representations -16- contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or controlling person, and shall survive any termination of this Agreement or the issuance and delivery of the Securities. The Trust and the Guarantor agree promptly to notify the Underwriters of the commencement of any litigation or proceedings against the Trust or the Guarantor or any of their officers or directors in connection with the issue and sale of the Securities or with such Registration Statement or Prospectus. (b) Each Underwriter warrants and represents that the information furnished in writing by or on behalf of such Underwriter through you to the Trust or the Guarantor expressly for use with reference to such Underwriter in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus does not contain an untrue statement of a material fact and does not omit to state a mate- rial fact in connection with such information required to be stated in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus or necessary to make such information not misleading. Each Underwriter, in addition to other information furnished by such Underwriter or on its behalf through you to the Trust or the Guarantor in writing expressly for use with reference to such Underwriter in the Registration Statement and Prospectus, hereby furnishes to the Trust and the Guarantor in writing expressly for use with reference to such Underwriter the state- ments with respect to the terms of offering of the Securities by the Underwriters set forth on the cover page of the Prospec- tus Supplement and under "underwriting" therein. Each Underwriter severally agrees to indemnify and hold harmless the Trust and the Guarantor, the Guarantor's directors and officers, each trustee of the Trust and each per- son, if any, who controls the Trust or the Guarantor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any loss, expense, liability or claim which arises out of or is based upon any alleged untrue state- ment of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Under- writer through you to the Trust or the Guarantor expressly for use with reference to such Underwriter in, the Registration Statement, any prospectus contained in the Registration State- ment at the time it became effective or the Prospectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state a material fact in -17- connection with such information required to be stated in such documents or necessary to make such information not misleading. If any action is brought against the Trust, the Guar- antor or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing para- graph, the Trust, the Guarantor or such person shall promptly notify such Underwriter in writing or by telephone, confirmed in writing, of the institution of such action and such Under- writer shall assume the defense of such action, including the employment of counsel and payment of expenses. The Trust, the Guarantor or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Trust, the Guar- antor or such person unless the employment of such counsel shall have been authorized in writing by such Underwriter in connection with the defense of such action or such Underwriter shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those avail- able to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses for all indemnified parties of one counsel selected by the Guarantor shall be borne by such Underwriter. Anything in this paragraph to the contrary not- withstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written con- sent of such Underwriter. The indemnity agreement on the part of each Underwriter contained in this Section 9(b) and its war- ranties and representations contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Trust, the Guarantor or such per- son, and shall survive any termination of this Agreement or the issuance and delivery of the Securities. Each Underwriter agrees promptly to notify the Trust and the Guarantor of the commencement of any litigation or proceedings against such Underwriter in connection with the issue and sale of the Secu- rities or with such Registration Statement or Prospectus. (c) If the indemnification provided for in Section 9(a) or 9(b) above is unavailable in respect of any losses, expenses, liabilities or claims referred to therein, then the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses except to the extent that contribution is not -18- permitted under the Act or the Exchange Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Securities (taking into account the portion of the proceeds of the offer- ing realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable con- siderations appropriate under the circumstances. The Trust, the Guarantor and the Underwriters and such controlling persons agree that it would not be equitable if the amount of such con- tribution were determined by pro rata or per capita allocation (even if the Underwriters and such controlling persons were treated as one entity for such purpose). The contribution agreement contained in this Section 9(c) shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or the Trust or the Guarantor or any of its officers or directors or any controlling person and shall survive any termination of this Agreement or the issuance and delivery of the Securities. 10. If any Underwriter shall default in its obliga- tion to take up and pay for the Securities to be purchased by it hereunder and if the number of Securities which all Under- writers so defaulting shall have so failed to take up and pay for does not exceed 10% of the total number of Securities, the non-defaulting Underwriters shall take up and pay for (in addi- tion to the number of Securities they are obligated to purchase pursuant to this Agreement) the number of Securities agreed to be purchased by all such defaulting Underwriters, as herein provided. Such Securities shall be taken up and paid for by such non-defaulting Underwriter or Underwriters in such number as you may designate with the consent of each Underwriter so designated or, in the event no such designation is made, such Securities shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the number of Securities set opposite the names of all such non-defaulting Underwriters in Schedule I hereto. Without relieving any defaulting Underwriter of its obligations hereunder, the Trust and the Guarantor agree with the non-defaulting Underwriters that they will not sell any Securities hereunder unless all of the Securities are purchased by the Underwriters (or by substituted Underwriters selected by you with the approval of the Trust and the Guarantor or selected by the Trust and the Guarantor with your approval). -19- If a new underwriter or underwriters are substituted by the Underwriters or by the Trust and the Guarantor for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Trust, the Guarantor or you will have the right to postpone the Time of Delivery for a period of not exceeding five business days in order that necessary changes in the Registration Statement and Prospectus and other documents may be effected. The term Underwriter as used in this Agreement will refer to and include any underwriter substituted under this Section 10 with like effect as if such substituted underwriter had originally been named in Schedule I hereto. 11. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you. All statements, requests, notices and agreements shall be in writing, and if to the Underwriters shall be deliv- ered or sent by mail, telex or facsimile transmission to you as the representatives in care of _________________________________________________________, Attention: _______________________; and if to the Trust or the Guarantor by mail to it at the address of the Trust or the Guarantor set forth in the Registration Statement, Attention: Secretary; provided, however that any notice to an Underwriter pursuant to Section 9(b) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address as supplied to the Trust and the Guarantor by you upon request. Any such statements, requests, notices or agree- ments shall take effect upon receipt thereof. 12. The Agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Trust and the Guarantor, and the controlling persons, directors and officers referred to in Section 9 hereof, and their respective successors, assigns, executors and administrators, and no other person shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation (including, without limitation, any purchaser of the Securities from an Underwriter or any subsequent holder thereof) any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. -20- The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any Shares from any Underwriter or any subsequent holder thereof. 13. This Agreement shall be governed by, and con- strued in accordance with the laws of the State of New York. 14. This Agreement may be executed in any number of counterparts, which, taken together, shall constitute one and the same instrument. -21- If the foregoing is in accordance with your under- standing, please sign and return to us eight counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters, on the one hand, and the Trust and the Guarantor, on the other. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority granted to you by such Underwriters but without war- ranty on your part as to the authority of the signers thereof. Very truly yours, Southwestern Public Service Capital I By: [Southwestern Public Service Company,] as Depositor By: ----------------------------------- Name: Title: Southwestern Public Service Company By: ----------------------------------- Name: Title: Accepted as of the date hereof: By: ----------------------------------- -22- SCHEDULE I Total Number of Securities Underwriters to be purchased Total....................................... --------------- EX-4.A 3 INDENTURE Exhibit 4(a) SOUTHWESTERN PUBLIC SERVICE COMPANY TO WILMINGTON TRUST COMPANY, AS TRUSTEE --------------------------- INDENTURE DATED AS OF __________, 1996 --------------------------- DEFERRABLE INTEREST SUBORDINATED DEBENTURES Certain Sections of this Indenture relating to Sections 310 through 318 of the Trust Indenture Act of 1939: Trust Indenture Indenture Act Section Section Section 310(a)(1)............................ 609 (a)(2)............................ 609 (a)(3)............................ Not Applicable (a)(4)............................ Not Applicable (b)............................... 608, 610 Section 311(a)............................... 613 (b)............................... 613 Section 312(a)............................... 701, 702(a) (b)............................... 702(b) (c)............................... 702(c) Section 313(a)............................... 703(a) (b)............................... 703(a) (c)............................... 703(a) (d)............................... 703(b) Section 314(a)............................... 704 (b)............................... Not Applicable (c)(1)............................ 102 (c)(2)............................ 102 (c)(3)............................ Not Applicable (d)............................... Not Applicable (e)............................... 101, 102 Section 315(a)............................... 601 (b)............................... 602 (c)............................... 601 (d)............................... 601 (e)............................... 514 Section 316(a)............................... 101 (a)(1)(A)......................... 502, 512 (a)(1)(B)......................... 513 (a)(2)............................ Not Applicable (b)............................... 508 (c)............................... 104(c) Section 317(a)(1)............................ 503 (a)(2)............................ 504 (b)............................... 1003 Section 318(a)............................... 107 - --------------------- Note: This reconciliation and tie shall not, for any purposes, be deemed to be a part of this Indenture. TABLE OF CONTENTS Page ---- ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions.................................... 1 SECTION 102. Compliance Certificates and Opinions..................................... 10 SECTION 103. Form of Documents Delivered to Trustee...................................... 11 SECTION 104. Acts of Holders; Record Dates.................. 11 SECTION 105. Notices, Etc. to Trustee and the Company...................................... 13 SECTION 106. Notice to Holders; Waiver...................... 13 SECTION 107. Conflict with Trust Indenture Act.............. 14 SECTION 108. Effect of Headings and Table of Contents..................................... 14 SECTION 109. Successors and Assigns......................... 14 SECTION 110. Separability Clause............................ 14 SECTION 111. Benefits of Indenture.......................... 15 SECTION 112. GOVERNING LAW.................................. 15 SECTION 113. Legal Holidays................................. 15 ARTICLE TWO FORM OF SECURITIES SECTION 201. Forms Generally................................ 15 SECTION 202. Form of Legend for Global Securities................................... 16 SECTION 203. Form of Trustee's Certificate of Authentication............................... 16 ARTICLE THREE THE SECURITIES SECTION 301. Amount Unlimited; Issuable in Series....................................... 17 SECTION 302. Denominations.................................. 20 SECTION 303. Execution, Authentication, Delivery and Dating................................... 21 SECTION 304. Temporary Securities........................... 22 SECTION 305. Registration, Registration of Transfer and Exchange........................ 23 -i- Page ---- SECTION 306. Mutilated, Destroyed, Lost and Sto- len Securities............................... 26 SECTION 307. Payment of Interest; Interest Rights Preserved............................. 27 SECTION 308. Persons Deemed Owners.......................... 28 SECTION 309. Cancellation................................... 29 SECTION 310. Computation of Interest........................ 29 SECTION 311. Right of Set-Off............................... 29 SECTION 312. CUSIP Numbers.................................. 29 ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture.................................... 30 SECTION 402. Application of Trust Money..................... 31 ARTICLE FIVE REMEDIES SECTION 501. Events of Default.............................. 32 SECTION 502. Acceleration of Maturity; Rescis- sion and Annulment........................... 34 SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............. 35 SECTION 504. Trustee May File Proofs of Claim............... 36 SECTION 505. Trustee May Enforce Claims Without Possession of Securities..................... 36 SECTION 506. Application of Money Collected................. 37 SECTION 507. Limitation on Suits............................ 37 SECTION 508. Unconditional Right of Holders to Receive Principal and Interest............... 38 SECTION 509. Restoration of Rights and Remedies............. 39 SECTION 510. Rights and Remedies Cumulative................. 39 SECTION 511. Delay or Omission Not Waiver................... 39 SECTION 512. Control by Holders............................. 39 SECTION 513. Waiver of Past Defaults........................ 40 SECTION 514. Undertaking for Costs.......................... 40 SECTION 515. Waiver of Stay or Extension Laws............... 41 ARTICLE SIX THE TRUSTEE SECTION 601. Certain Duties and Responsibilities............ 41 SECTION 602. Notice of Defaults............................. 43 -ii- Page ---- SECTION 603. Certain Rights of the Trustee.................. 43 SECTION 604. Not Responsible for Recitals or Issuance of Securities....................... 45 SECTION 605. May Hold Securities............................ 45 SECTION 606. Money Held in Trust............................ 45 SECTION 607. Compensation and Reimbursement................. 45 SECTION 608. Disqualification; Conflicting Interests................................... 46 SECTION 609. Corporate Trustee Required; Eligibility.................................. 46 SECTION 610. Resignation and Removal; Appoint- ment of Successor............................ 47 SECTION 611. Acceptance of Appointment by Successor.................................... 49 SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................... 51 SECTION 613. Preferential Collection of Claims Against Company.............................. 51 ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................... 51 SECTION 702. Preservation of Information; Commu- nications to Holders......................... 52 SECTION 703. Reports by Trustee............................. 52 SECTION 704. Reports by Company............................. 52 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. Company May Consolidate, Etc. Only on Certain Terms............................. 53 SECTION 802. Successor Substituted.......................... 54 ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 901. Supplemental Indentures Without Consent of Holders........................... 55 SECTION 902. Supplemental Indentures with Con- sent of Holders.............................. 56 SECTION 903. Execution of Supplemental Indentures................................... 57 -iii- Page ---- SECTION 904. Effect of Supplemental Indentures............... 57 SECTION 905. Conformity with Trust Indenture Act............ 58 SECTION 906. Reference in Securities to Supple- mental Indentures............................ 58 ARTICLE TEN COVENANTS; REPRESENTATIONS AND WARRANTIES SECTION 1001. Payment of Principal and Interest.............. 58 SECTION 1002. Maintenance of Office or Agency................ 58 SECTION 1003. Money for Payments on Securities to Be Held in Trust............................. 59 SECTION 1004. Statement by Officers as to Default............ 60 SECTION 1005. Additional Covenants........................... 61 ARTICLE ELEVEN SUBORDINATION OF SECURITIES SECTION 1101. Securities Subordinate to Senior Indebtedness................................. 62 SECTION 1102. Payment Over of Proceeds upon Dis- solution, etc................................ 62 SECTION 1103. No Payment When Senior Indebtedness in Default................................... 64 SECTION 1104. Payment Permitted if No Default................ 65 SECTION 1105. Subrogation to Rights of Holders of Senior Indebtedness.......................... 65 SECTION 1106. Provisions Solely to Define Rela- tive Rights.................................. 66 SECTION 1107. Trustee to Effectuate Subordination............ 67 SECTION 1108. No Waiver of Subordination Provisions................................... 67 SECTION 1109. Notice to Trustee.............................. 68 SECTION 1110. Reliance on Judicial Order or Cer- tificate of Liquidating Agent................ 69 SECTION 1111. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of Trustee's Rights.......................... 69 SECTION 1112. Article Applicable to Paying Agents............ 70 -iv- Page ---- ARTICLE TWELVE REDEMPTION OF SECURITIES SECTION 1201. Applicability of Article....................... 70 SECTION 1202. Election to Redeem; Notice to Trustee...................................... 70 SECTION 1203. Selection by Trustee of Securities to Be Redeemed............................... 71 SECTION 1204. Notice of Redemption........................... 71 SECTION 1205. Deposit of Redemption Price.................... 72 SECTION 1206. Securities Payable on Redemption Date......................................... 73 SECTION 1207. Securities Redeemed in Part.................... 73 ANNEX A Form of Amended and Restated Trust Agreement.................................... A-1 -v- INDENTURE, dated as of _________, 1996, between Southwestern Public Service Company, a corporation duly orga- nized and existing under the laws of the State of New Mexico (herein called the "Company") having its principal office at Tyler at Sixth, Amarillo, Texas 79101, and Wilmington Trust Company, as Trustee (herein called the "Trustee"). Unless otherwise defined herein, with respect to a given series of debentures, all capitalized terms used herein shall have the meanings ascribed to them in the Amended and Restated Trust Agreement, the form of which is attached as Annex A hereto. RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its debentures (herein called the "Securi- ties"), to be issued in one or more series to evidence the loans to be made to the Company of the proceeds from the issu- ance from time to time by one or more business trusts (each a "Trust" and, collectively, the "Trusts") of preferred benefi- cial interests in such Trusts (the "Preferred Securities") and common beneficial interests in such Trusts (the "Common Securities"). All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the pur- chase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of each series thereof, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions. For all purposes of this Indenture, except as other- wise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the mean- ings assigned to them in this Article and include the plural as well as the singular; -2- (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; and (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Additional Interest" means the sum of Additional Interest Attributable to Deferral and Additional Interest Attributable to Taxes. "Additional Interest Attributable to Deferral" means interest that shall accrue on any interest on the Securities that is in arrears or not paid during an Extension Period. "Additional Interest Attributable to Taxes" means, if a Trust is required to pay any taxes, duties or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority, such amounts as shall be required so that the net amounts received by such Trust and available for distribution to hold- ers of Trust Securities by such Trust after paying such taxes, duties or governmental charges shall not be less than the amounts such Trust would have received had no such taxes, duties or governmental charges been imposed. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "con- trolled" have meanings correlative to the foregoing. "Board of Directors" means either the board of direc- tors of the Company or any duly authorized committee of that -3- board or any Officer of the Company who has been authorized by the Board to act on its behalf by a Board Resolution. "Board Resolution" means a copy of a resolution cer- tified by the Secretary or an Assistant Secretary of the Com- pany to have been duly adopted by the Board of Directors, and delivered to the Trustee. "Business Day" means a day other than (w) a Saturday or a Sunday, (x) a day on which banks in New York are autho- rized or obligated by law or executive order to remain closed, (y) a day on which the Corporate Trust Office of the Trustee, or the principal office of the Property Trustee under the Trust Agreement, is closed for business or (z) a day on which the principal office of the Company is closed for business. "Commission" means the Securities and Exchange Com- mission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such suc- cessor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman, its President or a Vice President and delivered to the Trustee. "Corporate Trust Office" means the principal office of the Trustee in Wilmington, Delaware at which at any particu- lar time its corporate trust business shall be administered and which at the date of this Indenture is 1100 North Market Street, Wilmington, Delaware 19890. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the -4- 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 Sec- tion 501. "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, as amended from time to time. "Extension Period" has the meaning specified in Sec- tion 301. "Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United States Code, as amended from time to time. "Global Security" means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 202 (or such other legend as contemplated by Section 301). "Holder" means a Person in whose name a Security is registered in the Securities Register. "Indenture" means this instrument as originally exe- cuted or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pur- suant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental inden- ture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supple- mental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301. "Interest Payment Date", when used with respect to any installment of interest on any Security, means the date specified in such Security as the fixed date on which an installment of interest with respect to such Security is due and payable. "Investment Company Event" means with respect to an issuance of Securities of a particular issue, the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency, or regulatory authority (a "Change -5- in 1940 Act Law") to the effect that a Trust is or will be con- sidered an "investment company" that is required to be regis- tered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective after the date specified in the prospectus supplement or in the authorizing Board Resolution with respect to the related issuance of Pre- ferred Securities. "Maturity", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Officers' Certificate" means a certificate signed by (i) the Chairman, the President, a Vice President, or the Trea- surer of the Company and (ii) the Secretary or an Assistant Secretary of the Company and delivered to the Trustee; pro- vided, however, that such certificate may be signed by two of the officers or directors listed in clause (i) above in lieu of being signed by one of such officers or directors listed in such clause (i) and one of the officers listed in clause (ii) above. One of the officers signing an Officers' Certificate given pursuant to Section 1004 shall be the principal execu- tive, financial or accounting officer of the Company. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each officer signing the Offic- ers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opin- ion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. -6- "Opinion of Counsel" means a written opinion of coun- sel, who may be counsel for the Company, and who shall be rea- sonably acceptable to the Trustee. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities thereto- fore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or deliv- ered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money or U.S. Government Obligations in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursu- ant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 1001, or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in deter- mining whether the Holders of the requisite principal amount of Securities have given or concurred in any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any Affiliate of the Company (other than a Trust to which such Securities have been issued) shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direc- tion, notice, consent or waiver, only Securities the ownership of which by the Company or an Affiliate of the Company the Trustee has actual knowledge of shall be so disregarded. "Parent Guarantee" means any guarantee that the Com- pany may enter into with a Trust for the benefit of the holders of the Preferred Securities of such Trust. "Paying Agent" means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company. The Paying Agent shall initially be Wilmington Trust Company. -7- "Person" means any individual, corporation, partner- ship, joint venture, trust, limited liability company or corpo- ration, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authen- ticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Preferred Securities" has the meaning specified in the Recitals to this Indenture. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemp- tion by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed by or pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Representative" means an indenture trustee or other trustee, agent or representative for an issue of Senior Indebtedness. "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the execu- tive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secre- tary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust offi- cer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily per- forming 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 famil- iarity with the particular subject. -8- "Securities" has the meaning specified in the Recit- als to this Indenture and more particularly means any Securi- ties authenticated and delivered under this Indenture. "Securities Register" and "Securities Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness" means the principal of, pre- mium, if any, interest on and any other payment due pursuant to any of the following, whether outstanding at the date hereof or hereafter incurred, created or assumed: (i) all indebtedness of the Company on a consolidated basis (other than any obliga- tions to trade creditors) evidenced by notes, debentures, bonds or other securities sold by the Company for money borrowed and capitalized lease obligations; (ii) all indebtedness of others of the kinds described in the preceding clause (i) assumed or guaranteed in any manner by the Company or in effect guaranteed by the Company; (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all condi- tional sale obligations of the Company and all obligations of the Company under any title retention agreement (but excluding trade accounts payable); (iv) certain obligations of the Com- pany for the reimbursement of any obligor on any letter of credit, banker's acceptance, security purchase facility, surety bond or similar credit transaction entered into in the ordinary course of business of the Company; and (v) all renewals, exten- sions or refundings of indebtedness of the kinds described in any of the preceding clauses (i), (ii), (iii) or (iv), unless, in the case of any particular indebtedness, capitalized lease obligation, guarantee, renewal, extension or refunding, the instrument creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebted- ness, renewal, extension or refunding is subordinated to or is pari passu with the Securities. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the prin- cipal, together with any accrued and unpaid interest (including Additional Interest), of such Security or such installment of interest is due and payable. -9- "Subsidiary" means any Person a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "Voting Stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Tax Event" means, with respect to an issuance of Securities of a particular series, the receipt by a Trust or the Company, as the case may be, of an Opinion of Counsel expe- rienced in such matters to the effect that a relevant tax law change has occurred after the date specified in the prospectus supplement or in the authorizing Board Resolution with respect to the related issuance of Preferred Securities. For purposes of the preceding sentence a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the publication of any judicial opinion interpret- ing such laws (and regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or reg- ulations) (including official and unofficial opinions purport- ing to apply such laws and regulations to other Persons who have issued securities similar to the Securities), which amend- ment, change, proposed amendment or change, opinion or inter- pretation could, if valid and enacted or applied to such Trust or the Company, result in (i) such Trust, either currently or within 90 days of the date thereof, becoming subject to United States federal income tax with respect to interest received on the Securities, (ii) interest payable by the Company on the Securities attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States federal income tax purposes or (iii) such Trust, either currently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Trust Agreement" means any agreement establishing a Trust, as the same may be amended, modified, supplemented or restated. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was -10- executed; provided, however, that in the event the Trust Inden- ture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such suc- cessor Trustee, and if at any time there is more than one such person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of Amer- ica, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a spe- cific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such deposi- tory receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific pay- ment of principal of or interest on the U.S. Government Obliga- tion evidenced by such depository receipt. "Vice President", when used with respect to the Com- pany or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". SECTION 102. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Inden- ture, the Company shall furnish to the Trustee such certifi- cates and opinions as may be required under the Trust Indenture -11- Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture. SECTION 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Per- son, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Com- pany 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 represen- tations with respect to the matters upon which such officer's certificate or opinion is based are erroneous. Any such cer- tificate 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 mat- ters 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 instru- ment. SECTION 104. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Inden- ture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar -12- tenor signed by such Holders in person or by their agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instru- ment 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 exe- cution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Inden- ture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affida- vit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual sign- ing such instrument or writing acknowledged to him the execu- tion thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursu- ant to Section 701) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. (d) The ownership of Securities shall be proved by the Securities Register. -13- (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Secu- rity shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. SECTION 105. Notices, Etc. to Trustee and the Company. Any request, demand, authorization, direction, notice, consent, waiver or Act or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trus- tee at its Corporate Trust Office, Attention: Corporate Trust Administration, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this Indenture, Atten- tion: Secretary, or at any other address previously fur- nished in writing to the Trustee by the Company. SECTION 106. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder's address as it appears in the Securities Register, not later than the latest date (if any), and not ear- lier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in a notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any man- ner, such notice may be waived in writing by the Person enti- tled to receive such notice, either before or after the event, -14- and such waiver shall be the equivalent of such notice. Waiv- ers 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 impracti- cable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 107. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or con- flicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Inden- ture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so mod- ified or to be excluded, as the case may be. SECTION 108. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. Successors and Assigns. The Company will have the right at all times to assign any of its rights or obligations under this Indenture to (a) a direct or indirect wholly owned Subsidiary, provided that, in the event of any such assignment, the Company will remain liable for all such obligations and (b) to any other Person in accordance with the provisions of Article Eight of this Indenture. This Indenture may not otherwise be assigned by the parties hereto. Subject to the foregoing, this Inden- ture is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns. 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 provi- sions shall not in any way be affected or impaired thereby. -15- SECTION 111. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness, the holders of Preferred Securities (to the extent provided herein) and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 112. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 113. Legal Holidays. In any case where any Interest Payment Date, Redemp- tion Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest on or prin- cipal of the Securities shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such pay- ment of interest on or principal of the Securities, as the case may be, shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity. ARTICLE TWO FORM OF SECURITIES SECTION 201. Forms Generally. The Securities of each series shall be in substan- tially the forms established by or pursuant to a Board Resolu- tion or in one or more indentures supplemental hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary or as may, consistently herewith, be determined by -16- the officers executing such Securities, as evidenced by their execution of such Securities. If the form of Securities of any series is established by action taken pursuant to a Board Reso- lution, 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 deliv- ery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. The definitive Securities shall be printed, litho- graphed, engraved or produced by any combination of these or other methods, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. SECTION 202. Form of Legend for Global Securities. Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REG- ISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. SECTION 203. Form of Trustee's Certificate of Authentication. The Trustee's certificate of authentication shall be in substantially the following form: -17- This is one of the Securities of the series desig- nated therein referred to in the within-mentioned Indenture. ------------------------------, as Trustee By: --------------------------- Authorized Signatory ARTICLE THREE THE SECURITIES SECTION 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issu- ance of Securities of any series, (1) the title of the Securities of the series (which shall distinguish the Securities of such series from Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Inden- ture (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 1207 and except for any Securities which, pur- suant to Section 303, are deemed never to have been authenticated and delivered hereunder); (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered -18- at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of any Securities of the series is payable; (5) the rate or rates at which any Securi- ties of the series shall bear interest, if any, the extent to which Additional Interest Attribut- able to Deferral, if any, shall be payable in respect of any Securities of such series, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable, the Regular Record Date for any such interest payable on any Interest Payment Date and the right, if any, of the Company to extend the interest payment periods and the duration of such extension (an "Extension Period"); (6) the place or places where the principal of and any premium and interest on any Securities of the series shall be payable; (7) the period or periods within which, the price or prices at which and the terms and condi- tions 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 Resolu- tion, the manner in which any election by the Com- pany to redeem the Securities shall be evidenced; (8) the obligation, if any, of the Company to redeem or repurchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof, and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursu- ant to such obligation; (9) if other than denominations of $25 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable; -19- (10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined; (11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of deter- mining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of "Out- standing" in Section 101; (12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or cur- rency units other than that or those in which such Securities are stated to be payable, the currency,currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined); (13) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; (14) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and in such case, the respective Depositaries desig- nated for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 202 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305, in which any such Global Security may be exchanged -20- in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof; (15) any addition to or change in the Events of Default which apply to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and pay- able pursuant to Section 502; (16) any addition to or change in the cove- nants set forth in Article Ten which applies to Securities of the series; and (17) any other terms of the series (which terms shall not be inconsistent with the provi- sions of this Indenture, except as permitted by Section 901(5)). All Securities of any one series shall be substan- tially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and deliv- ered to the Trustee at or prior to the delivery of the Offic- ers' Certificate setting forth the terms of the series. The Securities shall be subordinated in right of pay- ment to Senior Indebtedness as provided in Article Eleven. SECTION 302. Denominations. The Securities of each series shall be issuable only in registered form, without coupons, and only in denominations as shall be specified as contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall -21- be issuable in denominations of $25 and any integral multiple thereof. SECTION 303. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman, its President or one of its Vice Pres- idents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signa- ture 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 indi- viduals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securi- ties of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authenti- cation and delivery of such Securities; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities. If the form or terms of the Securi- ties 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 Secu- rities, 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 Resolutions as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities have been established by or pursuant to Board Resolu- tions as permitted by Section 301, that such terms have been established in conformity with the pro- visions of this Indenture; and (3) that such Securities, when authenticated and delivered by the Trustee and issued by the -22- Company in the manner and subject to any condi- tions 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 Secu- rities or this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursu- ant 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 manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. SECTION 304. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, -23- substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at any office or agency of the Company designated pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securi- ties of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of any authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. SECTION 305. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant Section 1002 being herein sometimes collectively referred to as the "Securities Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of trans- fers of Securities. The Trustee is hereby appointed "Securi- ties Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security of a series at an office or agency of the Company des- ignated pursuant to Section 1002 for such purpose for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated trans- feree or transferees, one or more new Securities of the same series of any authorized denominations and of a like aggregate principal amount. -24- At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surren- dered 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 trans- fer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registra- tion of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed, by the Holder thereof or such Holder's attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1207 not involving any transfer. If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company will not be required to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities that may be selected for redemption and ending at the close of business on the day of such mailing. The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities: (1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security -25- or a nominee thereof and delivered to such Deposi- tary 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 reg- istered, 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 Glo- bal Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act as such Depositary, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security, (C) the Company in its sole discretion determines that such Global Security shall be so exchange- able, 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 contem- plated 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 Securi- ties issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct. (4) Every Security authenticated and deliv- ered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Sec- tion, Section 304, 306, 906 or 1207 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof. -26- SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trus- tee, the Company shall execute, and the Trustee shall authenti- cate 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 indem- nity 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 exe- cute, and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Secu- rity, pay such Security. Upon the issuance of any new Security under this Sec- tion, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of muti- lated, destroyed, lost or stolen Securities. -27- SECTION 307. Payment of Interest; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Secu- rity 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 Securi- ties) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the rele- vant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below: (1) the Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Com- pany shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the 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 Trus- tee for such deposit prior to the date of the pro- posed payment, such money when deposited to be held in trust for the benefit of the Persons enti- tled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Spe- cial 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 Com- pany, shall cause notice of the proposed payment -28- of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at such Holder's address as it appears in the Securities Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securi- ties) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and, if so listed, upon such notice as may be required by such exchange, if, after notice given by the Com- pany to the Trustee of the proposed payment pursu- ant 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 Secu- rity shall carry the rights to interest accrued and unpaid, and to accrue (including in each such case Additional Interest), which were carried by such other Security. SECTION 308. Persons Deemed Owners. Prior to due presentment of a Security for registra- tion of transfer, the Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 307) interest (including Additional Interest) on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary. -29- SECTION 309. Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Com- pany may have acquired in any manner whatsoever, and all Secu- rities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order. SECTION 310. Computation of Interest. Except as otherwise specified as contemplated by Sec- tion 301 for Securities of any series, interest on the Securi- ties of each series shall be computed on the basis of a 360-day year of twelve 30-day months and, for any period shorter than a full monthly period, shall be computed on the basis of the actual number of days elapsed in such period. SECTION 311. Right of Set-Off. Notwithstanding anything to the contrary in this Indenture, the Company shall have the right to set-off any pay- ment it is otherwise required to make hereunder to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under a Parent Guarantee. SECTION 312. CUSIP Numbers. The Company in issuing the Securities of any series may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as con- tained 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. -30- ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (a) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money or U.S. Government Obligations have theretofor been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Com- pany 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; or (iii) are to be called for redemption within one year under arrangements satisfac- tory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds (a) money in the necessary amount or (b) U.S. Government Obliga- tions, the principal of and the interest on which when due, and without any regard to reinvestment -31- thereof, in the opinion of an independent account- ant, and, in the opinion of the officers of the Company executing an Officers' Certificate to that effect, will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee, shall be sufficient to pay when due the principal of, premium, if any, and interest due and to become due on said Securities or portions thereof on the Redemption Date or the Stated Maturity thereof, as the case may be, in trust to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trus- tee for cancellation, for principal and interest (including Additional Interest to the date of deposit) to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Com- pany; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Coun- sel, 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 Inden- ture, the obligations of the Company to the Trustee under Sec- tion 607 and, if money or U.S. Government Obligations shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. SECTION 402. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations depos- ited 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, -32- to the Persons entitled thereto, of the principal and interest for whose payment such deposited money and the money from U.S. Government Obligations have been deposited with the Trustee. ARTICLE FIVE REMEDIES SECTION 501. Events of Default. "Event of Default," wherever used herein with respect to Securities of any series, means any one of the fol- lowing events that has occurred and is continuing (whatever the reason for such Event of Default and whether it shall be occa- sioned by the provisions of Article Eleven or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) failure for 30 days to pay any interest on the Securities of that series, including any Additional Interest in respect thereof, when due (subject to the deferral of any due date in the case of an Extension Period); or (2) failure to pay any principal on the Securities of that series when due whether at Stated Maturity, upon redemption, by declaration of acceleration or otherwise; except that, in the event of an optional redemption, the failure to redeem any Security which is the result of the Company's failure to deposit on or before the Redemption Date with the Trustee (and/or having irrevocably directed the Trustee to apply, from money held by it available to be used for the redemption of Securities) an amount in cash suffi- cient to redeem all of the Securities to be redeemed, shall not be an Event of Default, but shall be deemed a rescission of the call for redemption; or (3) failure to observe or perform in any material respect any other covenant relating to a particular series contained in this Indenture for 90 days after written notice to the Company from the Trustee or the holders of at least 25% in -33- principal amount of the Outstanding Securities of that series; or (4) a decree or order is entered by a court having jurisdiction in the premises (i) for relief in respect of the Company in an involuntary case or proceeding under the Federal Bankruptcy Code or any other federal or state bankruptcy, insolvency, reorganization or similar law or (ii) adjudging the Company a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or compo- sition of or in respect of the Company under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee or seques- trator (or other similar official) of the Company or of any substantial part of any of its proper- ties, or ordering the winding up or liquidation of any of its affairs, and any such decree or order remains unstayed and in effect for a period of 60 consecutive days; or (5) the Company institutes a voluntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or any other case or proceedings to be adjudicated a bankrupt or insolvent, or the Company consents to the entry of a decree or order for relief in respect of the Company in any involuntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or to the institution of bankruptcy or insolvency pro- ceedings against the Company, or the Company files a petition or answer or consent seeking reorgani- zation or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or consents to the filing of any such petition or to the appointment of or taking possession by a cus- todian, receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Company or of any substantial part of its prop- erty, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. -34- SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to the Securities of any series at the time Outstanding occurs and is continuing, then and in every such case, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of that series or the holders of at least 25% in aggregate liquidation amount of the Preferred Securities then outstanding of the Trust to which such series of securities has been issued shall have the right to declare the principal of and the interest (including any Additional Interest) on all the Securities of that series and any other amounts payable hereun- der to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders or the holders of such Preferred Securities) and shall have the right to enforce any and all other rights of Holders of Securities of that series as creditors with respect to the Securities of that series. Upon any such declaration, such principal and all accrued interest shall become immediately due and payable. At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article, the Holders of a majority in princi- pal 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 Trus- tee a sum sufficient to pay, (A) all overdue interest (including any Addi- tional Interest) on all Securities of that series, (B) the principal of any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by such Securities, and (C) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the nonpayment of the principal -35- of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if (1) default is made in the payment of any interest (including any Additional Interest) on any Security when such interest becomes due and payable and such default continues for a period of 30 days (subject to the deferral of any due and payable interest in the case of an Exten- sion Period), or (2) default is made in the payment of the principal of any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest (including any Additional Interest), at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. -36- SECTION 504. Trustee May File Proofs of Claim. In case of any judicial proceeding relating to the Company (or any other obligor upon the Securities), its prop- erty or its creditors, the Trustee shall be entitled and empow- ered, 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, liquida- tor, sequestrator or other similar official in any such judi- cial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the rea- sonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 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 produc- tion thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reason- able compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. -37- SECTION 506. Application of Money Collected. Subject to Article Eleven, any money or U.S. Govern- ment Obligations collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest (including any Additional Interest), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607; SECOND: To the payment of the amounts then due and unpaid for principal of and interest (including any Additional Interest) on the Securi- ties in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest (including any Additional Interest), respectively; and THIRD: The balance, if any, to the Company. SECTION 507. Limitation on Suits. No Holder of any Security of any series or any holder of Preferred Securities of the Trust to which such series of Securities has been issued shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder or holder of Preferred Secu- rities has previously given written notice to the Trustee of a continuing Event of Default with respect to Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series or the holders of at least 25% in aggregate liquidation amount of the Preferred Securities then outstanding of the Trust to which such series of securities has been issued shall have made written request to the Trustee to -38- institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders or holder or holders of Preferred Securities have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such pro- ceeding; and (5) no direction inconsistent with such written request has been given to the Trustee dur- ing such 60-day period by the Holders of a major- ity in principal amount of the Outstanding Securi- ties of that series or the holders of a majority in aggregate liquidation amount of the Preferred Securities then outstanding of the Trust to which such series of securities has been issued; it being understood and intended that no one or more Holders or holders of Preferred Securities shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders or holders of Preferred Securities, or to obtain or to seek to obtain priority or preference over any other Holders or holders of Preferred Securities or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders or holders of Preferred Securities. SECTION 508. Unconditional Right of Holders to Receive Principal and Interest. Notwithstanding any other provision in this Inden- ture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 307) interest (including any Addi- tional Interest) on such Security on the Stated Maturity (sub- ject to the deferral of any due date for the payment of inter- est in the case of an Extension Period) expressed in such Secu- rity (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. -39- SECTION 509. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any pro- ceeding 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 deter- mination in such proceeding, the Company, the Trustee and the Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and reme- dies of the Trustee and the Holder shall continue as though no such proceeding had been instituted. SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permit ted 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 Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquies- cence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that -40- (1) such direction shall not be in conflict with any rule of law or with this Indenture; and (2) the Trustee may take any other action deemed proper by the Trustee which is not incon- sistent with such direction. SECTION 513. Waiver of Past Defaults. Subject to Sections 902 and 905 hereof, the Holders of not less than a majority in principal amount of the Out- standing Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of or interest (including any Additional Interest) on any Security of such series (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration have been deposited with the Trustee); or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. Undertaking for Costs. In any suit for the enforcement of any right or rem- edy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such court to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, that nei- ther this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or the Trustee or in any suit for the enforcement of the right -41- to receive the principal of and interest (including any Addi- tional Interest) on any Security. SECTION 515. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may law- fully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the cove- nants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX THE TRUSTEE SECTION 601. Certain Duties and Responsibilities. (1) Except during the continuance of an Event of Default, (A) the Trustee undertakes to perform such duties and only such duties as are spe- cifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (B) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the cor- rectness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the require- ments of this Indenture; but in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the -42- same to determine whether or not they conform to the requirements of this Indenture. In case an Event of Default has occurred and is con- tinuing, the Trustee shall exercise such of the rights and pow- ers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (2) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct except that (A) this Subsection shall not be con- strued to limit the effect of Subsection (1) of this Section; (B) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (C) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of Holders pursuant to Section 512 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exer- cising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the perfor- mance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indem- nity against such risk or liability is not reasonably assured to it. -43- Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affect ing the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 602. Notice of Defaults. If any default occurs hereunder with respect to Secu- rities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in Section 501(3) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. The Trustee shall not be deemed to have knowledge of any Event of Default unless the Trustee shall have received written notice, or a Responsible Officer charged with the administration of the Trust Agreement shall have obtained writ- ten notice, of such Event of Default. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securi- ties of such series. SECTION 603. Certain Rights of the Trustee. Subject to the provisions of Section 601: (a) the Trustee may rely and shall be pro- tected in acting or refraining from acting upon any resolution, certificate, statement, instru- ment, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evi- dence 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 par- ties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors may be suffi- ciently evidenced by a Board Resolution; -44- (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifi- cally prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its choice, which may be counsel to the Company, and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instru- ment, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evi- dence 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, per- sonally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be respon- sible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and -45- (h) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. SECTION 604. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Secu- rities or the proceeds thereof. SECTION 605. May Hold Securities. The Trustee, any Paying Agent, any Securities Regis- trar, or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securi- ties 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, Paying Agent, Security Registrar, or such other agent. SECTION 606. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 607. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time such compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensa- tion shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); -46- (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 accor- dance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and coun- sel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee and any prede- cessor Trustee for, and to hold it harmless against, any and all loss, damage, claim, lia- bility or expense, including taxes (other than taxes based on the income of the Trustee) incurred without negligence or bad faith on its part, aris- ing out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or lia bility in connection with the exercise or performance of any of its powers or duties hereun- der. To secure the Trustee's rights under this Section, the Trustee shall have a lien against any money or other property collected hereunder. The provisions of this Section shall survive the termination of this Indenture. SECTION 608. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by and subject to the provi- sions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series. SECTION 609. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to the Securities of each series, which may be a Trus- tee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the -47- Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person pub- lishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining author- ity, then for the purposes of this Section, the combined capi- tal and surplus of such Person shall be deemed to be its com- bined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 610. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611. (b) 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 an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 60 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Com- pany. (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request there- for by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or -48- (2) the Trustee shall cease to be eli- gible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or (4) an Event of Default has not occurred and is not continuing, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a succes- sor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of -49- such appointment, become the successor Trustee with respect to Securities of such series and supersede the successor Trustee with respect to the Securities of any series appointed by the Com- pany. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all oth- ers similarly situated, petition any court of com- petent jurisdiction for the appointment of a suc- cessor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of such successor Trustee's Corporate Trust Office. SECTION 611. Acceptance of Appointment by Successor. Every successor Trustee with respect to all Securi- ties appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; provided that, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its reasonable charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trus- tee all property and money held by such retiring Trustee here- under. In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not -50- all) series, the Company, the retiring Trustee and each succes- sor 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 nec- essary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereun der 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, with out 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 Com- pany 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. -51- 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 consolida- tion to which the Trustee shall be a party, shall be the suc- cessor of the Trustee hereunder, provided that such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securi- ties shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authen- ticated such Securities. 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 Inden- ture Act regarding the collection of claims against the Company (or any such other obligor). ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee (a) semiannually, not later than February 15 and August 15 in each year, a list, in such form as the Trus- tee may reasonably require, of the names and addresses of the Holders of Securities of each series as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Com- pany of any such request, a list of similar form and con- tent as of a date not more than 15 days prior to the time -52- such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Securities Registrar. SECTION 702. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Hold- ers contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Hold- ers received by the Trustee in its capacity as Securities Reg- istrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that none of the Company, the Trustee or any agent of either of them shall be held accountable by reason of any disclosure of infor- mation as to names and addresses of Holders made pursuant to the Trust Indenture Act. SECTION 703. Reports by Trustee. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange. SECTION 704. Reports by Company. The Company shall file with the Trustee and the Com- mission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be -53- required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). 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 proper- ties and assets substantially as an entirety to the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, partnership, trust or other entity shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trus- tee, the due and punctual payment of the principal of and interest (including any Additional Interest) on all the Securities and the performance or observance of every covenant of this Indenture, any Trust Agreement, any -54- Parent Guarantee and any Expense Agreement on the part of the Company to be performed or observed; (2) immediately after giving effect to such transac- tion and treating any indebtedness which becomes an obli- gation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have hap- pened and be continuing; (3) such consolidation or merger or conveyance, transfer or lease of properties or assets of the Company does not give rise to any breach or violation of, any Trust Agreement or any Parent Guarantee; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supple- mental indenture complies with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 802. Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, trans- fer or lease of the properties and assets of the Company sub- stantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. -55- ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 901. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein or in the Securities conferred upon the Company; (3) to cure any ambiguity or to correct any provi- sion herein which may be defective or inconsistent with any other provision herein; (4) to comply with the requirements of the Commis- sion in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act, as contem- plated by Section 905 or otherwise; (5) to evidence and provide for the acceptance of the appointment of a successor Trustee with respect to the Securities of one or more series hereunder and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administra- tion of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; (6) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or (7) to make any other change that does not adversely affect the rights of any Holder. -56- SECTION 902. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Com- pany, 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, how- ever, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any installment of interest (including any Additional Interest) on, any Security, or reduce the principal amount thereof or the rate of interest thereon, or change the place of payment where, or the coin or currency in which, any Security or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture with respect to the subordination of the Securities in a manner adverse to the Holders, (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders if required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) pro- vided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1005, except to increase any such percentage (referred to in clause (2), above) or to pro- vide that certain other provisions of this Indenture can- not be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, that, so long as any of the Preferred Securities remain outstanding, no such amendment shall be made that adversely affects the holders of the Preferred Securities and -57- no waiver of any Event of Default or compliance with any cove- nant under this Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of the outstanding Preferred Securities unless and until the Securities and all accrued and unpaid interest (including any Additional Interest) thereon have been paid in full. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any pro- posed 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 cre- ated 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 (sub- ject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such sup- plemental indenture is authorized or permitted by this Inden- ture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trust- ee'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 accor- dance 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 deliv- ered hereunder shall be bound thereby. -58- SECTION 905. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. SECTION 906. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may bear a notation in form approved by the Trus- tee as to any matter provided for in such supplemental inden- ture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be pre- pared and executed by the Company and authenticated and deliv- ered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE TEN COVENANTS; REPRESENTATIONS AND WARRANTIES SECTION 1001. Payment of Principal and Interest. The Company will duly and punctually pay the princi- pal of and interest on the Securities of each series in accor- dance with the terms of the Securities and this Indenture. SECTION 1002. Maintenance of Office or Agency. The Company will maintain in the United States an office or agency for each series of Securities where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for regis- tration of transfer or exchange, where Securities of that series may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of -59- the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies (in the United States) where the securities of one or more series may be presented or sur- rendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such des- ignation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the United States for each series of Securities for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the loca- tion of any such other office or agency. SECTION 1003. Money for Payments on Securities to Be Held in Trust. If the Company shall at any time act as its own Pay- ing Agent with respect to any series of Securities, it will, on or at the option of the Company before each due date of the principal of or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Per- sons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to 12:00 noon, New York time, on each due date of the principal of or interest on any Securities of that series, deposit with a Pay- ing Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee or the Company to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the pro- visions of this Section 1003, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continu- ance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in -60- respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Pay- ing 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 Trus- tee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such pay- ment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Security of any series and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Com- pany on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. SECTION 1004. Statement by Officers as to Default. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the material terms, provisions or conditions of this Inden- ture (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. -61- SECTION 1005. Additional Covenants. The Company covenants and agrees for the benefit of the Holders of Securities of each series that it will not declare or pay any dividends or distributions (other than divi- dends or distributions in capital stock of the Company or other securities ranking junior in right of payment to the Securities of a particular series), on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Securities of such series, or make any guarantee payments with respect to the foregoing (other than pro rata payments under the Parent Guarantee and any similar Parent Guarantees issued by the Company on behalf of the hold- ers of Preferred Securities issued by any issuer holding Secu- rities) or repurchase, or cause any of the Subsidiaries to repurchase, any securities of the Company ranking pari passu with or junior in right of payment to the Securities of such series (except for payments made on any series of Securities upon the stated maturity of such Securities); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any secu- rity ranking pari passu with or junior in right of payment to the Securities of such series, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Securities of such series with securities (or the proceeds from the issu- ance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, pur- chased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased; if at such time (i) there shall have occurred any event of which the Company has actual knowledge that (a) with the giving of notice or the lapse of time or both, would constitute an Event of Default hereunder with respect to Securities of such series and (b) which the Company shall not have taken reasonable steps to cure, (ii) the Company shall be in default with respect to its payment of any obligations under a Parent Guarantee relating to the Preferred Securities of the Trust corresponding to which the Securities of such series have been issued or (iii) the Company shall have given notice of its selection of an Exten- sion Period as provided herein with respect to Securities of such series and such period, or any extension thereof, shall have commenced and be continuing. -62- The Company also covenants, for the benefit of the Holders of Securities of each series, (i) not to transfer own- ership of the Common Securities of the Trust to which the Secu- rities of such series have been issued to any person other than an Affiliate of the Company or a successor of the Company per- mitted under Article Eight of this Indenture; provided that no such transfer shall result in (x) the Trust being considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, or (y) the Trust not being taxed as a grantor trust for United States Fed- eral income tax purposes; (ii) not to voluntarily dissolve, wind up or terminate such Trust, except in connection with a distribution of the Securities of such series to the holders of the corresponding Preferred Securities in liquidation of such Trust or in connection with certain mergers, consolidations or amalgamations permitted by the Trust Agreement relating to such Trust and (iii) to use its reasonable efforts, consistent with the terms and provisions of such Trust Agreement, to cause such Trust to remain a grantor trust and not to be classified as an association taxable as a corporation for United States Federal income tax purposes. ARTICLE ELEVEN SUBORDINATION OF SECURITIES SECTION 1101. Securities Subordinate to Senior Indebtedness. The Company covenants and agrees, and each Holder of a Security, by such Holder's acceptance thereof, likewise cove- nants and agrees that, notwithstanding anything to the contrary contained herein, to the extent and in the manner hereinafter set forth in this Article, the indebtedness represented by the Securities and the payment of the principal of and premium, if any, and interest on each and all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash or cash equivalents of all Senior Indebtedness (including any interest accruing after the occurrence of an Event of Default under Section 501(4) or (5)). SECTION 1102. Payment Over of Proceeds upon Dissolution, etc. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company or to its assets, or (b) any -63- liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company, then and in any such event: (1) the holders of Senior Indebtedness shall be entitled to receive payment in full in cash or cash equiv- alents of all amounts due or to become due on or in respect of all Senior Indebtedness, or provision shall be made for such payment in cash or cash equivalents, before the Holders of the Securities are entitled to receive any payment on account of principal of (or premium, if any) or interest on the Securities; and (2) any payment or distribution of assets of the Company of any kind or character, whether in cash, prop- erty or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the pro- visions of this Article Eleven, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securi- ties (except, so long as the effect of this parenthetical clause is not to cause the Securities to be treated in any case or proceeding or similar event described in Subsec- tion (a), (b) or (c) of this Section 1102 as part of the same class of claims as the Senior Indebtedness or any class of claims on a parity with or senior to the Senior Indebtedness, for any such payment or distribution of securities which (i) are unsecured, (ii) have an average life and final maturity no shorter than the average life and final maturity of the Securities and (iii) are subor- dinated, to at least the same extent as the Securities, to the payment of all Senior Indebtedness then outstanding), shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebted- ness or their Representative or Representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium, if any, and interest on, and other amounts due on or in connection with, the Senior Indebtedness to the extent necessary to make payment in full in cash or -64- cash equivalents of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; and (3) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any such payment or dis- tribution of assets of the Company of any kind or char- acter, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebt- edness of the Company being subordinated to the payment of the Securities, before all Senior Indebtedness is paid in full or payment thereof provided for, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid to the extent neces- sary to pay all Senior Indebtedness in full in cash or cash equivalents, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or lease of its properties and assets substantially as an entirety to another corporation upon the terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of the Company for the purposes of this Section 1102 if the corporation formed by such consolidation or into which the Com- pany is merged or the corporation which acquires by conveyance, transfer or lease such properties and assets substantially as an entirety, as the case may be, shall, as a part of such con- solidation, merger, conveyance, transfer or lease, comply with the conditions set forth in Article Eight. SECTION 1103. No Payment When Senior Indebtedness in Default. (i) In the event of and during the continuation of any default in the payment of principal of (or premium, if any) or interest on any Senior Indebtedness or (ii) in the event -65- that any other event of default with respect to any Senior Indebtedness shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, then no payment shall be made by the Company on account of the principal of (or premium, if any) or interest on the Securities or on account of the pur- chase or redemption or other acquisition of Securities unless and until such payment default shall have been cured or waived or shall have ceased to exist or such acceleration shall have been rescinded or annulled or the holders of such Senior Indebtedness or their agents have waived the benefits of this Section. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, then and in such event such payment shall be received and held in trust for the holders of Senior Indebtedness and shall be paid over or delivered to the Representative of Senior Indebtedness then outstanding to the extent necessary to pay in full in cash or cash equivalents all Senior Indebtedness. The provisions of this Section shall not apply to any payment with respect to which Section 1102 would be applicable. SECTION 1104. Payment Permitted if No Default. Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 1102 or under the conditions described in Section 1103, from making payments at any time of principal of (and premium, if any) or interest on the Securities. SECTION 1105. Subrogation to Rights of Holders of Senior Indebtedness. Subject to the payment in full of all Senior Indebt- edness, the Holders of the Securities shall be subrogated (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to Senior Indebtedness of the Company to the same extent as the Securities are subordinated and which is entitled to like -66- rights of subrogation) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebt- edness until the principal of (and premium, if any) and inter- est on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, and no pay- ments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness. SECTION 1106. Provisions Solely to Define Relative Rights. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securi- ties is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the rela- tive rights against the Company of the Holders of the Securi- ties and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permit- ted by applicable law upon default under this Indenture, sub- ject to the express limitations set forth in Article Five and to the rights, if any, under this Article of the holders of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 1102, to receive, pursuant to and in accordance with such Section, cash, property and securi- ties otherwise payable or deliverable to the Trustee or such Holder, or (2) under the conditions specified in Section 1103, to prevent any payment prohibited by such Section. -67- SECTION 1107. Trustee to Effectuate Subordination. Each Holder of a Security by such Holder's acceptance thereof authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article Eleven, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the provisions of Section 601, the Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay over or deliver to holders of Securities, the Company or any other Person money or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article Eleven or otherwise. SECTION 1108. No Waiver of Subordination Provisions. No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or any non-compliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article Eleven or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is out- standing; (b) sell, exchange, release or otherwise deal with -68- any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company and any other Person. SECTION 1109. Notice to Trustee. The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payments to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof at the Corporate Trust Office of the Trustee from the Company or a holder of Senior Indebtedness or from any trustee, fiduciary or agent therefore; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 602, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 1109 at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (and pre- mium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the con- trary which may be received by it within three Business Days prior to such date. Nothing in this Section 1109 shall limit the right of the holders of Senior Indebtedness to recover pay- ments as contemplated by Sections 1102 and 1103. Subject to the provisions of Section 602, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing such Person to be a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee, fiduciary or agent there- for). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the -69- Trustee may request such Person to furnish evidence to the rea- sonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Per- son is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 1110. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 602, and the Holders of the Securi- ties shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insol- vency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pend- ing, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distri- bution, delivered to the Trustee or to the Holders of Securi- ties, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. SECTION 1111. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in its individual capacity shall be enti- tled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607. -70- SECTION 1112. Article Applicable to Paying Agents. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article Eleven in addition to or in place of the Trustee; provided, however, that (i) Section 1111 shall not apply to the Company or any Affili- ate of the Company if it or such Affiliate acts as Paying Agent and (ii) any notice required by this Article Eleven to be given by the holders of, or a Representative for, Senior Indebtedness need only be given to the Trustee and not to any Paying Agent. ARTICLE TWELVE REDEMPTION OF SECURITIES SECTION 1201. Applicability of Article. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article. SECTION 1202. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities pursuant to Section 1201 shall be evidenced by a Board Resolu- tion or in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption at the election of the Company, the Company shall, at least 30 days and no more than 90 days prior to the Redemption Date fixed by the Company, notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and provide a copy of the notice of redemption given to Holders of Securities to be redeemed pursuant to Section 1204. -71- SECTION 1203. Selection by Trustee of Securities to Be Redeemed. If less then all the Securities of any series are to be redeemed (unless such redemption affects only a single Secu- rity), the particular Securities to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method (including pro rata or by lot) as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of por- tions (equal to $25 or any integral multiple thereof) of the principal amount of the Securities of such series. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed. The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a sin- gle 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 con- text otherwise requires, all provisions relating to the redemp- tion of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 1204. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 90 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Securities Reg- ister. If at the time of mailing of any notice of redemption the Company shall not have deposited with the Trustee (and/or irrevocably directed the Trustee to apply, from money held by it available to be used for the redemption of Securities) an amount in cash sufficient to redeem all of the Securities to be redeemed, including accrued interest to such Redemption Date, such notice shall state that the proposed redemption to which -72- such notice relates is subject to the deposit of such amount with the Trustee on or before the Redemption Date. All notices of redemption shall identify the Securi- ties to be redeemed (including CUSIP number) and shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of the partial redemption of any such Securities, the princi- pal 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 that interest thereon will cease to accrue on and after said date, and (5) the place or placement where such Securities are to be surrendered for payment of the Redemption Price. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. SECTION 1205. Deposit of Redemption Price. Prior to 12:00 noon, New York time, on any Redemption Date, the Company shall deposit with the Trustee or with a Pay- ing 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. -73- SECTION 1206. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid and the Company having on or before the Redemption Date depos- ited with the Trustee (and/or having irrevocably directed the Trustee to apply, from money held by it available to be used for the redemption of Securities) an amount in cash sufficient to redeem all of the Securities to be redeemed, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date, such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accor- dance with said notice, such Security shall be paid by the Com- pany at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, such Security shall remain outstanding and shall, until paid, bear interest from the Redemption Date at the rate borne by the Security. SECTION 1207. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a place of payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ---------------- -74- 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 consti- tute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corpo- rate seals to be hereunto affixed and attested, all as of the day and year first above written. SOUTHWESTERN PUBLIC SERVICE COMPANY By: ------------------------------- Name: Title: Attest: - -------------------------- Name: Title: WILMINGTON TRUST COMPANY By: ------------------------- Name: Title: Attest: - ------------------------- Name: Title: EX-4.B 4 SUPPLEMENTAL INDENTURE Exhibit 4(b) SOUTHWESTERN PUBLIC SERVICE COMPANY TO WILMINGTON TRUST COMPANY, AS TRUSTEE ---------------------- _______ SUPPLEMENTAL INDENTURE Dated as of ______________, 199_ TO INDENTURE Dated as of ______________, 199_ ---------------------- ____% Deferrable Interest Subordinated Debentures, Series ____, Due ____ ______ SUPPLEMENTAL INDENTURE, dated as of , 199 (the "______ Supplemental Indenture"), between Southwestern Public Service Company, a New Mexico corporation (the "Company"), and Wilmington Trust Company, as trustee (the "Trustee") under the Indenture, dated as of , 199 , from the Company to the Trustee (the "Indenture"). WHEREAS, the Company has executed and delivered the Indenture to the Trustee in order to provide for the future issuance of its subordinated debentures (the "Securities"), such Securities to be issued from time to time in one or more series as may be determined by the Company under the Indenture, in an unlimited aggregate principal amount that may be authen- ticated and delivered thereunder as provided in the Indenture; WHEREAS, Southwestern Public Service Capital I (the "Series A Trust") may pursuant to the Underwriting Agreement dated , 199 among the Company, the Series A Trust and the Underwriters named therein issue $ aggregate liquidation preference of its % Trust Preferred Securi- ties, Series A (the "Series A Preferred Securities") with a liquidation amount of $25 per Series A Preferred Security; WHEREAS, the Company is guaranteeing (the "Parent Guarantee") the payment of distributions on the Series A Pre- ferred Securities, the payment of the Redemption Price and the payment on liquidation with respect to the Series A Preferred Securities, to the extent provided in the Guarantee Agreement, of even date herewith between the Company and Wilmington Trust Company, as guarantee trustee for the benefit of the holders of the Series A Preferred Securities; WHEREAS, the Company wishes to sell to the Series A Trust, and the Series A Trust wishes to purchase from the Com- pany, Series A Securities (as defined below) in an aggregate principal amount equal to $ , and in satisfaction of the purchase price for such Series A Securities, the adminis- trative trustees of the Series A Trust, on behalf of the Series A Trust, wish to (i) execute and deliver to the Company Common Securities certificates evidencing an ownership interest in the Series A Trust, registered in the name of the Company, having an aggregate liquidation amount of $ and (ii) deliver to the Company the sum of $ ; WHEREAS, the Company has duly authorized the creation of an issue of its % Deferrable Interest Subordinated Deben- tures, Series A, Due (the "Series A Securities"), of the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this ______ Supplemental Indenture; and -2- WHEREAS, all things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this ______ Supplemental Indenture a valid agreement of the Company, each in accordance with their terms, have been done. NOW, THEREFORE, THIS _______ SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the pur- chase of the Series A Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Series A Securities as follows: ARTICLE ONE GENERAL TERMS OF THE SERIES A SECURITIES SECTION 101. Title; Stated Maturity; Interest. The aggregate principal amount of Securities which may be authenticated and delivered under this ______ Supplemen- tal Indenture is limited to $ except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 303, 304, 305, 306, 906 or 1207 of the Indenture. The Securities shall be known and designated as the " % Deferrable Interest Subordinated Debentures, Series A, due " of the Company. Their Stated Maturity shall be , , and they shall bear interest at the rate of % per annum, from , 199_ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable quarterly (subject to deferral as set forth herein), in arrears, on _______, _______, ______ and ______ of each year, commencing , 199 until the principal thereof is paid or made available for pay- ment. Additional Interest Attributable to Deferral will com- pound quarterly and will accrue at the rate of % per annum on any interest installment in arrears for more than one quarter or during an extension of an interest payment period as set forth below. In the event that any date on which interest is payable on the Securities is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day except that, if such -3- Business Day is in the next succeeding calendar year, such Interest Payment Date shall be the immediately preceding Busi- ness Day (and without any interest or other payment in respect of any such delay). The Company shall have the right, at any time while any Series A Securities are outstanding, from time to time to extend the interest payment period thereon for up to 20 con- secutive quarters (the "Extension Period") during which period interest will compound quarterly and the Company shall have the right to make partial payments of interest on any Interest Pay- ment Date, and at the end of which Extension Period the Company shall pay all interest then accrued and unpaid thereon (together with Additional Interest Attributable to Deferral at the rate specified for the Series A Securities to the extent permitted by applicable law); provided that the Company shall not defer the interest payment period with respect to Addi- tional Interest Attributable to Taxes and shall make payment thereof on the relevant Interest Payment Date; provided further that during any such Extension Period, the Company shall not declare or pay any dividends or distributions (other than divi- dends or distributions in capital stock of the Company or other securities, including other securities ranking junior in right of payment to the Series A Securities) on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Series A Securities, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Parent Guarantee and any similar Parent Guarantees issued by the Company on behalf of the hold- ers of Preferred Securities issued by any issuer holding Secu- rities) or repurchase, or cause any of its Subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Series A Securities (except for payments made on any series of Securities upon the stated maturity of such Securities); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security rank- ing pari passu with or junior in right of payment to the Series A Securities, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Series A Securities with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which -4- a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters or extend beyond the Stated Maturity or the Redemption Date of the Series A Securi- ties. Upon the termination of any Extension Period and upon the payment of all accrued and unpaid interest and any Addi- tional Interest then due, the Company may select a new Exten- sion Period, subject to the foregoing requirements. Except for Additional Interest Attributable to Taxes, no interest shall be due and payable during an Extension Period, except at the end thereof. The Company shall give the Series A Trust, the Admin- istrative Trustees of the Series A Trust and the Trustee notice of its selection of such Extension Period, subject to the above requirements, at least one Business Day prior to the earlier of (i) the related Interest Payment Date or (ii) the date the Series A Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to Holders of the Series A Preferred Securities of the record date or the date such distributions are payable, but in any event not less than one Business Day prior to such record date. The Trustee shall promptly notify the Holders of the Series A Pre- ferred Securities and the Administrative Trustees of the Series A Trust of the Company's selection of such an Extension Period. The principal of and interest on the Series A Securi- ties shall be payable at the office or agency of the Company in the United States maintained for such purpose and at any other office or agency maintained by the Company for such purpose in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and pri- vate debts; provided, however, that, at the option of the Com- pany, payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (ii) by wire trans- fer in immediately available funds at such place and to such account as may be designated by the Person entitled thereto as specified in the Securities Register; provided further, that for so long as any Series A Security is registered in the name of the Property Trustee, payment of principal (including Redemption Price and interest) shall be made by wire transfer in immediately available funds at such place and to such account as may be designated by the Property Trustee. -5- The Series A Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article Eleven of the Indenture. The Series A Securities shall be pari passu with the Parent Guarantee. The Series A Securities shall be redeemable as pro- vided in Section 102 below and in Article Twelve of the Indenture. SECTION 102. Redemption. At any time on or after , , the Company shall have the right to redeem the Series A Securities, in whole or in part, from time to time, at a Redemption Price equal to 100% of the principal amount of Series A Securities to be redeemed plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. If a Tax Event or an Investment Company Act Event shall occur and be continuing or upon the event of the termina- tion or liquidation of the Series A Trust pursuant to an order for the dissolution, termination, or liquidation of the Series A Trust entered by a court of competent jurisdiction, the Company shall have the right to redeem the Series A Securi- ties in whole but not in part, at a Redemption Price equal to % of the principal amount thereof plus accrued but unpaid interest, including Additional Interest, if any, to the Redemp- tion Date. For so long as the Series A Trust is the Holder of all Series A Securities Outstanding, the proceeds of any redemption described in this Section 102 shall be used by the Series A Trust to redeem Series A Preferred Securities in accordance with their terms. The Company shall not redeem the Series A Securities in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Series A Securities Outstanding for all quarterly interest periods terminating on or prior to the Redemption Date. SECTION 103. Global Security. If the Series A Trust is not the sole Holder of the Series A Securities, in order to utilize a book-entry-only sys- tem for all or any portion of the Series A Securities, all or a portion of the Series A Securities may be issued in the form of one or more fully-registered Global Securities for the -6- aggregate principal amount of such Series A Securities (the "Series A Global Securities"), which Series A Global Securities shall be registered in the name of the Depositary selected by the Company or in the name of such Depositary's nominee. The initial Depositary shall be The Depository Trust Company. Each Series A Global Security shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction. If an event described under Clause (2) of Section 305 of the Indenture shall occur, then this Section 103 shall no longer be applicable to the Series A Global Securities, and the Company will execute, and the Trustee will authenticate and deliver (subject to receipt of an Officer's Certificate evi- dencing the Company's determination if the Company has exer- cised its rights under Clause (2)(C) of Section 305), Series A Securities in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Series A Global Securities in exchange for such Series A Global Securities. Upon the exchange of Series A Global Securities for such Series A Secu- rities in definitive registered form, the Series A Global Secu- rities shall be cancelled by the Trustee. Such Series A Secu- rities in definitive registered form issued in exchange for Series A Global Securities pursuant to this Section 103 shall be registered in such names and in such authorized denomina- tions as the Depositary, pursuant to instructions from its Direct or Indirect Participants or otherwise, shall direct. The Trustee shall deliver such Series A Securities to the Per- sons in whose names such Series A Securities are so registered. Except as provided below, owners solely of beneficial interests in a Series A Global Security shall not be entitled to receive physical delivery of Series A Securities in defini- tive form and will not be considered the Holders thereof for any purpose under the Indenture. Members of or participants in the Depositary shall have no rights under this Supplemental Indenture or the Inden- ture with respect to any Series A Global Security held on their behalf by the Depositary, and such Depositary or its nominee, as the case may be, may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the Holder of such Series A Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trus- tee, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as -7- between the Depositary and its members or participants, the operation of customary practices governing the exercise of the rights of a Holder of any Series A Security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authoriza- tion, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture. ARTICLE TWO FORM OF SERIES A SECURITY The Series A Securities are to be in substantially the following form: [FORM OF FACE OF SERIES A SECURITY] SOUTHWESTERN PUBLIC SERVICE COMPANY % Deferrable Interest Subordinated Debenture, Series A, Due _____ No. _____________ $________________ SOUTHWESTERN PUBLIC SERVICE COMPANY, a corporation duly organized and existing under the laws of the State of New Mexico (herein called the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ________________, or registered assigns, the principal sum of ________ DOLLARS ($________) on , and to pay interest on said principal sum from , 199_ or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on ______, ______, ______ and ______ of each year, com- mencing , 199 , at the rate of % per annum plus Additional Interest, if any, until the principal hereof shall have become due and payable, and on any overdue principal. The amount of interest payable for any period will be computed on the basis of twelve 30-day months and a 360-day year and, for any period shorter than a full monthly period, shall be com- puted on the basis of the actual number of days elapsed in such period. In the event that any date on which interest is -8- 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 inter- est or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Busi- ness Day" shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee, the principal office of the property trustee under the Trust Agreement or the principal office of the Company is closed for business. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securi- ties, as defined in the Indenture) is registered at the close of business on the Regular Record Date for such interest installment, which shall be the close of business on the Busi- ness Day next preceding such Interest Payment Date or, if this Security is issued in certificated form, the close of business on the 15th day next preceding such Interest Payment Date. Any such interest installment not so punctually paid or duly pro- vided 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 Securi- ties) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. The Company shall have the right at any time during the term of this Security, from time to time, to extend the interest payment period of such Security for up to 20 consecu- tive quarters (an "Extension Period"), during which period interest will compound quarterly and the Company shall have the right to make partial payments of interest on any Interest Pay- ment Date, and at the end of which Extension Period the Company shall pay all interest then accrued and unpaid (together with Additional Interest thereon to the extent that payment of such -9- interest is permitted by applicable law); provided that the Company shall not defer the interest payment period with respect to Additional Interest Attributable to Taxes; provided further that during any such Extension Period, the Company shall not declare or pay any dividends or distributions (other than dividends or distributions in capital stock of the Company or other securities ranking junior in right of payment to the Securities) on, or redeem, purchase, acquire or make a liquida- tion payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to this Security, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Parent Guarantee and any similar Parent Guarantees issued by the Com- pany on behalf of the holders of Preferred Securities issued by any issuer holding Securities) or repurchase, or cause any of its Subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to this Security (except for payments made on any series of securities upon the stated maturity of such securities); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any secu- rity ranking pari passu with or junior in right of payment to this Security, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to this Security with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters or extend beyond the maturity of this Security. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period except at the end thereof. The Company shall give the Holder of this Security and the Trustee notice of its selection of an Extension Period at least one Business Day prior to the earlier of (i) the Interest Payment Date or (ii) the date the Series A Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders -10- of the Series A Preferred Securities of the record date or the date such distributions are payable, but in any event not less than one Business Day prior to such record date. Payment of the principal of and interest on this Security will be made at the office or agency of the Company maintained for that purpose in Wilmington, Delaware, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (ii) by wire transfer in immediately available funds at such place and to such account as may be designated by the Person entitled thereto as speci- fied in the Securities Register. The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Security is issued subject to the provi- sions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee such Holder's attorney- in-fact for any and all such purposes. Each Holder hereof, by such Holder's acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture of each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions. Reference is hereby made to the further provisions of the Indenture summarized on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. -11- IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: ________, 199 SOUTHWESTERN PUBLIC SERVICE COM- PANY By: ----------------------------- Name: Title: Attest: - ---------------------------- FORM OF REVERSE OF SERIES A SECURITY This Security is one of a duly authorized issue of Securities of the Company, designated as its % Deferrable Interest Subordinated Debentures due (therein called the "Securities"), limited in aggregate principal amount to $ issued under an Indenture, dated as of , 199 supplemented by a [ ] Supplemental Indenture, dated as of , 199 (herein called the "Indenture"), between the Company and Wilmington Trust Company, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and such supplemental indentures reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. At any time on or after , , the Com- pany shall have the right, subject to the terms and conditions of Article Twelve of the Indenture, to redeem this Security at the option of the Company, without premium or penalty, in whole or in part, at a Redemption Price equal to % of the princi- pal amount to be redeemed plus accrued but unpaid interest, -12- including Additional Interest, if any, to the Redemption Date. If a Tax Event or an Investment Company Event (as defined in the Indenture) shall occur and be continuing, the Company shall have the right, subject to the terms and conditions of Article Twelve of the Indenture, to redeem this Security at the option of the Company, without premium or penalty, in whole but not in part, at a Redemption Price equal to % of the principal amount thereof plus accrued but unpaid interest, including Additional Interest, if any, to the Redemption Date. Any redemption pursuant to this paragraph will be made upon not less than 30 nor more than 90 days' notice, at the Redemption Price. If the Securities are only partially redeemed by the Company, the Securities will be redeemed pro rata, by lot or in such other manner as the Trustee shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to twenty-five U.S. dollars ($25) or any integral multiple thereof) of the principal amount of any Security. In the event of the redemption of this Security in part only, a new Security or Securities for the unredeemed por- tion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If an Event of Default with respect to the Securities shall occur and be continuing, the principal of the Securities may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions for satisfaction and discharge at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture. The Indenture contains provisions permitting the Com- pany and the Trustee, with the consent of Holders of the Secu- rities of each series to be affected of not less than a major- ity in principal amount of the Outstanding Securities of such series, to modify the Indenture in a manner affecting the rights of the Holders of the Securities of such series; pro- vided that no such modification may, without the consent of the Holder of each Outstanding Security affected thereby, (i) extend the fixed maturity of the Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest (other than pursuant to an Extension Period) thereon, or reduce any premium payable upon the redemp- tion thereof, or (ii) reduce the percentage of principal amount -13- of the Securities, the Holders of which are required to consent to any such modification of the Indenture. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company, Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890, duly endorsed by, or accom- panied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by, the Holder hereof or the Holder's attorney thereunto duly authorized in writing, and thereupon one or more new Securi- ties, 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 regis- tration 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 pur- poses, whether or not this Security shall be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary. -14- The Securities are issuable only in registered form without coupons in denominations of $25 and any integral mul- tiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchange- able for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obli- gations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. ARTICLE THREE MISCELLANEOUS PROVISIONS SECTION 301. Definitions of Terms. Except as otherwise expressly provided in this ______ Supplemental Indenture or in the form of Series A Security otherwise clearly required by the context hereof or thereof, all terms used herein that are defined in the Indenture shall have the meanings assigned to them therein. SECTION 302. Ratification of Indenture. The Indenture, as supplemented by this ______ Supple- mental Indenture, is in all respects ratified and confirmed, and this ______ Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 303. Recitals. The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibil- ity for the correctness thereof. The Trustee makes no -15- representation as to the validity or sufficiency of this ______ Supplemental Indenture. SECTION 304. Counterparts. This ______ Supplemental Indenture may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. -16- IN WITNESS WHEREOF, the parties hereto have caused this ______ Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgments and as of the day and year first above written. SOUTHWESTERN PUBLIC SERVICE COMPANY By ------------------------- Name: Title: Attest: - ------------------------------ Name: Title: WILMINGTON TRUST COMPANY, as Trustee By ------------------------ Name: Title: Attest: - ---------------------------- Name: Title: EX-4.E 5 GUARANTEE AGREEMENT Exhibit 4(e) GUARANTEE AGREEMENT Between Southwestern Public Service Company (as Guarantor) and Wilmington Trust Company (as Trustee) dated as of , 199 CROSS-REFERENCE TABLE1 Section of Section of Trust Indenture Act Guararantee of 1939, as amended Agreement 310(a) ............................. 4.1(a) 310(b) ............................. 4.1(c), 2.8 310(c) ............................. Inapplicable 311(a) ............................. 2.2(b) 311(b) ............................. 2.2(b) 311(c) ............................. Inapplicable 312(a) ............................. 2.2(a) 312(b) ............................. 2.2(b) 313 ................................ 2.3 314(a) ............................. 2.4 314(b) ............................. Inapplicable 314(c) ............................. 2.5 314(d) ............................. Inapplicable 314(e) ............................. 1.1, 2.5, 3.2 314(f) ............................. 2.1, 3.2 315(a) ............................. 3.1(d) 315(b) ............................. 2.7 315(c) ............................. 3.1 315(d) ............................. 3.1(d) 316(a) ............................. 5.4(a), 2.6 316(b) ............................. 5.3 316(c) ............................. 2.2 317(a) ............................. Inapplicable 317(b) ............................. Inapplicable 318(a) ............................. 2.1(b) 318(b) ............................. 2.1 318(c) ............................. 2.1(a) - --------------------- 1 This Cross-Reference Table does not constitute part of this Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. TABLE OF CONTENTS Page ---- ARTICLE 1 DEFINITIONS SECTION 1.1. Definitions .......................................... 2 ARTICLE 2 TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application ..................... 5 SECTION 2.2. Lists of Holders of Securities ....................... 5 SECTION 2.3. Reports by the Trustee ............................... 6 SECTION 2.4. Periodic Reports to Trustee .......................... 6 SECTION 2.5. Evidence of Compliance with Condi- tions Precedent ................................ 6 SECTION 2.6. Events of Default; Waiver ............................ 6 SECTION 2.7. Event of Default; Notice ............................. 6 SECTION 2.8. Conflicting Interests ................................ 7 ARTICLE 3 POWERS, DUTIES AND RIGHTS OF TRUSTEE SECTION 3.1. Powers and Duties of the Trustee ..................... 7 SECTION 3.2. Certain Rights of Trustee ............................ 9 ARTICLE 4 TRUSTEE SECTION 4.1. Trustee; Eligibility ................................. 11 SECTION 4.2. Appointment, Removal and Resigna- tion of Trustee ................................. 12 ARTICLE 5 GUARANTEE SECTION 5.1. Guarantee ............................................ 12 SECTION 5.2. Waiver of Notice and Demand .......................... 13 -i- Page ---- SECTION 5.3. Obligations Not Affected ............................. 13 SECTION 5.4. Rights of Holders .................................... 14 SECTION 5.5. Guarantee of Payment ................................. 14 SECTION 5.6. Subrogation .......................................... 14 SECTION 5.7. Independent Obligations .............................. 15 ARTICLE 6 SUBORDINATION SECTION 6.1. Subordination ........................................ 15 SECTION 6.2. Pari Passu ........................................ 15 ARTICLE 7 TERMINATION SECTION 7.1. Termination .......................................... 15 ARTICLE 8 MISCELLANEOUS SECTION 8.1. Successors and Assigns ............................... 16 SECTION 8.2. Amendments ........................................... 16 SECTION 8.3. Notices .............................................. 16 SECTION 8.4. Benefit .............................................. 17 SECTION 8.5. Governing Law ........................................ 17 -ii- GUARANTEE AGREEMENT This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , 199 , is executed and delivered by Southwestern Public Service Company, a New Mexico corporation (the "Guarantor"), and Wilmington Trust Company, as trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of Southwestern Public Service Capital I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to a Trust Agreement (the "Trust Agreement"), dated as of , 199 among David M. Wilks, as Initial Depositor, the Trustees of the Issuer named therein, Southwestern Public Service Company, as Depositor, and the Holders from time to time of ownership interests in the Issuer, the Issuer is issuing as of the date hereof $ aggregate liquidation amount of its % Trust Preferred Securities, Series A (the "Preferred Securi- ties") representing ownership interests in the Issuer and hav- ing the terms set forth in the Trust Agreement. WHEREAS, the Preferred Securities will be issued by the Issuer and the proceeds thereof will be used, together with the Common Securities of the Issuer, to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor and deposit the same with the Issuer as trust assets; and WHEREAS, as incentive for the Holders to purchase the Preferred Securities the Guarantor desires to irrevocably and unconditionally agree, to the extent set forth herein, to pay to the Holders of the Preferred Securities the Guarantee Pay- ments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the payment for Preferred Securities by each Holder thereof, which payment the Guarantor hereby agrees shall benefit the Guarantor, the Guar- antor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time of the Preferred Securities. -2- ARTICLE 1. DEFINITIONS SECTION 1.1. Definitions. As used in this Guaran- tee Agreement, the terms set forth below shall, unless the con- text otherwise requires, have the following meanings. Capital- ized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such spec- ified Person. For the purposes of this definition, "con- trol" 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 owner- ship of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Common Securities" means the securities representing common ownership interests in the assets of the Issuer. "Corporate Trust Office" means the principal office of the Trustee in Wilmington, Delaware, at which at any particular time its corporate trust business shall be and which at the date of this Guarantee Agreement is 1100 North Market Street, Wilmington, Delaware 19890. "Event of Default" means a default by the Guarantor on any of its payment obligations under this Guarantee Agreement. "Guarantee Payments" shall mean the following pay- ments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accrued and unpaid Distributions (as defined in the Trust Agreement) that are required to be paid on such Preferred Securities, but if and only to the extent that the Trustee of the Issuer has available in the Payment Account funds suffi- cient to make such payment, (ii) the redemption price, including all accrued and unpaid Distributions to the date of redemption (the "Redemption Price"), with respect to the Preferred Securities called for redemption by the -3- Issuer, but if and only to the extent that the Trustee of the Issuer has available in the Payment Account funds suf- ficient to make such payment, and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with a redemption of all of the Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred Securities to the date of payment, but if and only to the extent that the Issuer has funds sufficient to make such payment, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). "Holder" shall mean any holder, as registered on the books and records of the Issuer, of any Preferred Securi- ties; provided, however, that in determining whether the holders of the requisite percentage of Preferred Securi- ties have given any request, notice, consent or waiver hereunder. "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indenture" means the Indenture dated as of , 199 , as supplemented by the First Supplemen- tal Indenture thereto dated as of , 199 , from the Guarantor (the "Debenture Issuer") to Wilmington Trust Company, as trustee (the "Indenture Trustee"), as the same may be supplemented or amended. "Majority in Liquidation Amount of the Preferred Securities" means a vote by Holder(s) of Preferred Securi- ties, voting separately as a class, of at least a majority in liquidation amount of all Preferred Securities; pro- vided, however, that Preferred Securities owned by the Guarantor or any Affiliate thereof shall be disregarded for purposes of any such vote. "Officers' Certificate" means a certificate signed by the Chairman, the President, an Executive Vice President, a Senior Vice President, a Vice President or the Treasurer of the Guarantor and (ii) the Secretary or an Assistant Secretary of the Guarantor, and delivered to the Trustee; provided, however, that such certificate may be signed by two of the officers or directors listed in clause (i) above in lieu of being signed by one of such officers or directors listed in such clause (i) and one of the offic- ers listed in clause (ii) above. Any Officers' Certifi- cate delivered with respect to compliance with a condition -4- or covenant provided for in this Guarantee Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condi- tion and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such offic- er's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Person" means any individual, corporation, partner- ship, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Responsible Officer" means, with respect to the Trustee, any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or assistant trust officer or any other officer of the Corporate Trust Department of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular cor- porate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Senior Indebtedness" means Senior Indebtedness as defined in the Indenture. "Successor Trustee" means a successor Trustee pos- sessing the qualifications to act as Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. -5- "Trustee" means Wilmington Trust Company until a Suc- cessor Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agree- ment, and thereafter means each such Successor Trustee. ARTICLE 2. TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application. (a) This Guarantee Agreement is subject to the pro- visions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent appli- cable, be governed by such provisions; and (b) if and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.2. Lists of Holders of Securities. (a) The Guarantor shall furnish or cause to be fur- nished to the Trustee (a) semiannually, not later than February 15 and August 15 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of the Preferred Securities ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Trustee may request in writ- ing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished; provided that, the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Trustee by the Guarantor. The Trustee may destroy any List of Holders previ- ously given to it on receipt of a new List of Holders. (b) The Trustee shall comply with its obligations under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act. -6- SECTION 2.3. Reports by the Trustee. Within 60 days after July 1 of each year, the Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Trustee shall also comply with the require- ments of Section 313(d) of the Trust Indenture Act. SECTION 2.4. Periodic Reports to Trustee. The Guar- antor shall provide to the Trustee, the Securities and Exchange Commission and the Holders of the Preferred Securities such documents, reports and information (if any) as may be required by Section 314 of the Trust Indenture Act, as well as the com- pliance certificate required by such Section 314 in the form, in the manner and at the times required by such Section 314. SECTION 2.5. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Trustee such evidence of compliance with any conditions precedent provided for in this Guarantee Agreement that relate to any of the mat- ters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officers' Certificate. SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default and its conse- quences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 2.7. Event of Default; Notice. (a) The Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Preferred Securi- ties, notices of all Events of Default known to the Trustee, unless such defaults have been cured before the giving of such notice, provided that the Trustee shall be protected in with- holding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Trustee in good faith -7- determines that the withholding of such notice is in the inter- ests of the Holders of the Preferred Securities. (b) The Trustee shall not be deemed to have knowl- edge of any Event of Default unless the Trustee shall have received written notice, or a Responsible Officer charged with the administration of the Trust Agreement shall have obtained written notice, of such Event of Default. SECTION 2.8. Conflicting Interests. The Trust Agreement shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE 3. POWERS, DUTIES AND RIGHTS OF TRUSTEE SECTION 3.1. Powers and Duties of the Trustee. (a) This Guarantee Agreement shall be held by the Trustee for the benefit of the Holders of the Preferred Securi- ties, and the Trustee shall not transfer this Guarantee Agree- ment to any Person except a Holder of Preferred Securities exercising his or her rights pursuant to Section 5.4 or to a Successor Trustee on acceptance by such Successor Trustee of its appointment to act as Successor Trustee. The right, title and interest of the Trustee shall automatically vest in any Successor Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Trustee. (b) If an Event of Default has occurred and is con- tinuing, the Trustee shall enforce this Guarantee Agreement for the benefit of the Holders of the Preferred Securities. (c) The Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agree- ment against the Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same -8- degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Guarantee Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guar- antee Agreement; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Guarantee Agreement; and -9- (iv) no provision of this Guarantee Agreement shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the per- formance of any of its duties or in the exercise of any of its rights or powers, if the Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 3.2. Certain Rights of Trustee. (a) Subject to the provisions of Section 3.1: (i) the Trustee may rely and shall be fully pro- tected in acting or refraining from acting upon any reso- lution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Guarantor contem- plated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate; (iii) whenever, in the administration of this Guaran- tee Agreement, the Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor; (iv) the Trustee may consult with counsel of its choice, and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion; such coun- sel may be counsel to the Guarantor or any of its Affili- ates and may include any of its employees; the Trustee shall have the right at any time to seek instructions con- cerning the administration of this Guarantee Agreement from any court of competent jurisdiction; -10- (v) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Trustee such adequate security and indemnity as would sat- isfy a reasonable person in the position of the Trustee, against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by the Trustee in complying with such request or direction, including such reasonable advances as may be requested by the Trustee; provided that, nothing contained in this Sec- tion 3.2(a)(v) shall be interpreted so as to relieve the Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement; (vi) the Trustee shall not be bound to make any investigation into the facts or matters stated in any res- olution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (vii) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (viii) whenever in the administration of this Guarantee Agreement the Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Trustee (i) may request instructions from the Holders of the Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law, -11- to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Trustee shall be construed to be a duty. (c) The Guarantor agrees to indemnify the Trustee for, and to hold it harmless against, any and all loss, damage, claim, liability or expense, including taxes (other than taxes based on the income of the Trustee) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Guaranty Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or per- formance of any of its powers or duties hereunder. The Trust- ee's right to indemnification hereunder shall survive the ter- mination of this Guaranty Agreement. ARTICLE 4. TRUSTEE SECTION 4.1. Trustee; Eligibility. (a) There shall at all times be a Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined cap- ital and surplus of at least $50,000,000 and has its Cor- porate Trust office in the continental United States. If such Person publishes reports of condition at least annu- ally, pursuant to law or to the requirements of said supervising or examining authority, then, for the purposes of this Section 4.1(a)(ii), the combined capital and sur- plus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Trustee shall cease to be eligible to so act under Section 4.1(a), the Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Trustee has or shall acquire any "con- flicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and Guarantor shall in all -12- respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.2. Appointment, Removal and Resignation of Trustee. (a) Subject to Section 4.2(b), the Trustee may be appointed or removed without cause at any time by the Guarantor except following the occurrence and during the continuation of an Event of Default. (b) The Trustee shall not be removed until a Succes- sor Trustee has been appointed and has accepted such appoint- ment by written instrument executed by such Successor Trustee and delivered to the Guarantor. (c) The Trustee appointed to office shall hold office until a Successor Trustee shall have been appointed or until its removal or registration. The Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Trustee and delivered to the Guarantor and the resigning Trus- tee. (d) If no Successor Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Trustee may petition any court of competent jurisdiction for appointment of a Suc- cessor Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Trustee. ARTICLE 5. GUARANTEE SECTION 5.1. Guarantee. The Guarantor irrevocably agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert, other than the defense of payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment -13- of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.2. Waiver of Notice and Demand. The Guar- antor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpay- ment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.3. Obligations Not Affected. The obliga- tion of the Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be per- formed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemp- tion Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obliga- tion under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures permitted by the Indenture); (c) any failure, omission, delay or lack of dili- gence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer grant- ing indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, disso- lution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reor- ganization, arrangement, composition or readjustment of -14- the debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor other than the defense of payment, it being the intent of this Section 5.3 that the obliga- tions of the Guarantor hereunder -- to the limited extent set forth herein -- shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happen- ing of any of the foregoing. SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Trustee to be held for the benefit of the Holders of the Preferred Securities; (ii) the Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders of the Preferred Securities; (iii) the Holders of a Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Trustee under this Guarantee Agree- ment; and (iv) any Holder of the Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the Issuer or any other person or entity. SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by pay- ment of the Guarantee Payments in full (without duplication). SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders of Preferred Securities against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the -15- extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agree- ment, if, at the time of any such payment, any amounts of Guar- antee Payments are due and unpaid under this Guarantee Agree- ment. If any amount shall be paid to the Guarantor in viola- tion of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.7. Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof. ARTICLE 6. SUBORDINATION SECTION 6.1. Subordination. This Guarantee Agree- ment will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all Senior Indebtedness of the Guarantor. This Guarantee Agreement will be pari passu with the Debentures. SECTION 6.2. Pari Passu. This Guarantee Agreement shall rank pari passu with any similar Guarantee Agreements issued by the Guarantor on behalf of the Holders of Preferred Securities issued by any other issuer holding debentures issued under the Indenture. ARTICLE 7. TERMINATION SECTION 7.1. Termination. This Guarantee Agreement shall terminate and be of no further force and effect upon: (i) full payment of the Redemption Price of all Preferred Secu- rities, (ii) the distribution of Debentures to Holders of Pre- ferred Securities in exchange for all of the Preferred Securi- ties or (iii) upon full payment of the amounts payable in -16- accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agree- ment will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to the Preferred Securities or under this Guarantee Agreement. ARTICLE 8. MISCELLANEOUS SECTION 8.1. Successors and Assigns. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representa- tives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article Eight of the Indenture, the Guarantor shall not assign its obligations hereunder. SECTION 8.2. Amendments. Except with respect to any changes which do not adversely affect the rights of Holders (in which case no consent of Holders will be required), this Guar- antee Agreement may only be amended with the prior approval of the Holders of not less than a Majority in Liquidation Amount of the Preferred Securities. The provisions of Article VI of the Trust Agreement concerning meetings of Holders shall apply to the giving of such approval. SECTION 8.3. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Holders of the Preferred Securities: Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Attention: Secretary (b) if given to the Issuer, in care of the Trustee, at the Issuer's (and the Trustee's) address set forth below or such other address as the Trustee on behalf of -17- the Issuer may give notice to the Holders of the Preferred Securities: Southwestern Public Service Capital I c/o Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Attention: Secretary with copy to: Wilmington Trust Company 1100 North Market Street Wilmington, Delaware 19890 Facsimile No: (302) 651-8882 Attention: Corporate Trust Administration; (c) if given to any Holder of Preferred Securities, at the address set forth on the books and records of the Issuer. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt con- firmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or can- not be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.4. Benefit. This Guarantee Agreement is solely for the benefit of the Holders of the Preferred Securi- ties and, subject to Section 3.1(a), is not separately trans- ferable from the Preferred Securities. SECTION 8.5. Governing Law. THIS GUARANTEE AGREE- MENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together consti- tute but one and the same instrument. -18- THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. SOUTHWESTERN PUBLIC SERVICE COMPANY, as Guarantor By: ---------------------------- Name: Title: WILMINGTON TRUST COMPANY, as Trustee By: ---------------------------- Name: Title: EX-4.H 6 AMENDED AND RESTATED TRUST AGREEMENT ================================================================================ AMENDED AND RESTATED TRUST AGREEMENT among DAVID M. WILKS, as Initial Depositor and SOUTHWESTERN PUBLIC SERVICE COMPANY, as Depositor and WILMINGTON TRUST COMPANY, as Property Trustee, and THE ADMINISTRATIVE TRUSTEES NAMED HEREIN Dated as of , 199 SOUTHWESTERN PUBLIC SERVICE CAPITAL I ================================================================================ SOUTHWESTERN PUBLIC SERVICE CAPITAL I Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939: Amended and Restated Trust Indenture Trust Agreement Act Section Section ----------- -------------------- Section 310(a)(1) ........................................ 8.07 (a)(2) ........................................ 8.07 (a)(3) ........................................ 8.09 (a)(4) ........................................ Not Applicable (a)(5) ........................................ 8.08 (b) ........................................ 8.08 (c) ........................................ Not Applicable Section 311(a) ........................................ 8.13 (b) ........................................ 8.13 Section 312(a) ........................................ 5.07 (b) ........................................ 5.07 (c) ........................................ 5.07 Section 313 ........................................ 8.14 Section 314(a) ........................................ 8.15 (b) ........................................ Not Applicable (c)(1) ........................................ 8.16 (c)(2) ........................................ 8.16 (c)(3) ........................................ 8.16 (d) ........................................ Not Applicable (e) ........................................ 8.16 Section 315(a ........................................ 8.01 (b) ........................................ 8.02, 8.14(b) (c) ........................................ 8.01(c) (d) ........................................ 8.01, 8.03 (e) ........................................ 8.03 Section 316(a) ........................................ 6.04 (b) ........................................ 5.12(c)6.07 Section 317(a)(1) ........................................ 8.03 (a)(2) ........................................ 8.03 (b) ........................................ 5.08 Section 318(a) ........................................ 10.11 (b) ........................................ 10.11 (c) ........................................ 10.11 - ---------------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Trust Agreement. TABLE OF CONTENTS Page ---- ARTICLE I DEFINED TERMS Section 1.01. Definitions.............................................. 1 ARTICLE II ESTABLISHMENT OF THE TRUST Section 2.01. Name..................................................... 9 Section 2.03. Initial Contribution of Trust Property; Assignment of Initial Depositor's Rights and Duties; Organizational Expenses; Expense Agreement............. 9 Section 2.04. Issuance of the Preferred Securities..................... 9 Section 2.05. Subscription and Purchase of Debentures; Issuance of the Common Securities............................... 10 Section 2.06. Declaration of Trust..................................... 10 Section 2.07. Authorization to Enter into Certain Transactions......... 10 Section 2.08. Assets of the Trust...................................... 13 Section 2.09. Title to Trust Property.................................. 13 ARTICLE III PAYMENT ACCOUNT Section 3.01. Payment Account.......................................... 13 ARTICLE IV DISTRIBUTIONS; REDEMPTIONS Section 4.01. Distributions............................................ 14 Section 4.02. Redemptions.............................................. 14 Section 4.03. Subordination of Common Securities....................... 16 Section 4.04. Payment Procedures....................................... 16 Section 4.05. Tax Returns and Reports.................................. 17 Section 4.06. Payment of Taxes, Duties, Etc. of the Trust.............. 17 ARTICLE V TRUST SECURITIES CERTIFICATES Section 5.01. Initial Ownership........................................ 18 Section 5.02. The Trust Securities Certificates........................ 18 Section 5.03. Delivery of Trust Securities Certificates................ 18 Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates................................ 18 -i- TABLE OF CONTENTS (CONT.) Page ---- Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates............................... 19 Section 5.06. Persons Deemed Securityholders.......................... 19 Section 5.07. Access to List of Securityholders' Names and Addresses......................................... 19 Section 5.08. Appointment of Paying Agent............................. 20 Section 5.09. Book-Entry Preferred Securities Certificates; Common Securities Certificate......................... 20 Section 5.10 Notices to Clearing Agency............................. 21 Section 5.11. Definitive Preferred Securities Certificates........... 21 Section 5.12. Rights of Securityholders.............................. 22 ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING Section 6.01. Limitations on Voting Rights........................... 22 Section 6.02. Notice of Meetings..................................... 23 Section 6.03. Meetings of Preferred Securityholders.................. 23 Section 6.04. Voting Rights.......................................... 24 Section 6.05. Proxies, Etc........................................... 24 Section 6.06. Securityholder Action by Written Consent............... 24 Section 6.07. Record Date for Voting and Other Purposes.............. 24 Section 6.08. Acts of Securityholders................................ 24 Section 6.09. Inspection of Records.................................. 25 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BANK Section 7.01. Representations and Warranties.......................... 26 ARTICLE VIII THE TRUSTEES Section 8.01. Certain Duties and Responsibilities..................... 27 Section 8.02. Notice of Defaults...................................... 28 Section 8.03. Certain Rights of the Property Trustee................. 28 Section 8.04. Not Responsible for Recitals or Issuance of Securities............................................ 30 Section 8.05. May Hold Securities..................................... 30 Section 8.06. Compensation; Fees; Indemnity........................... 31 Section 8.07. Corporate Property Trustee Required; Eligibility of Trustees........................................... 31 Section 8.08. Conflicting Interests................................... 31 Section 8.09. Co-Trustees and Separate Trustees....................... 32 Section 8.10. Resignation and Removal; Appointment of Successor....... 33 Section 8.11. Acceptance of Appointment by Successor.................. 34 -ii- TABLE OF CONTENTS (CONT.) Page ---- Section 8.12. Merger, Conversion, Consolidation or Succession to Business............................... 35 Section 8.13. Preferential Collection of Claims Against Depositor or Trust................................... 35 Section 8.14. Reports by the Property Trustee........................ 35 Section 8.15. Reports to the Property Trustee........................ 36 Section 8.16. Evidence of Compliance with Conditions Precedent....... 36 Section 8.17. Number of Trustees..................................... 36 Section 8.18. Delegation of Power.................................... 36 ARTICLE IX TERMINATION AND LIQUIDATION Section 9.01. Termination upon Expiration Date....................... 37 Section 9.02. Early Termination...................................... 37 Section 9.03. Termination............................................ 37 Section 9.04. Liquidation............................................ 37 ARTICLE X MISCELLANEOUS PROVISIONS Section 10.01. Limitation on Rights of Securityholders................ 39 Section 10.02. Amendment.............................................. 39 Section 10.03. Separability........................................... 40 Section 10.04. Tax Elections.......................................... 40 Section 10.05. GOVERNING LAW.......................................... 40 Section 10.06. Successors............................................. 41 Section 10.07. Headings............................................... 41 Section 10.08. Intention of Parties................................... 41 Section 10.09. Notice and Demand...................................... 41 Section 10.10. Agreement Not to Petition.............................. 41 Section 10.11. Trust Indenture Act; Conflict with Trust Indenture Act........................................ 42 -------------------- Exhibit A Certificate of Trust Exhibit B Form of Certificate Depository Agreement Exhibit C The Depository Trust Company: Principal and Income Payments Rider Exhibit D Representations for Deposit/Withdrawal at Custodian Exhibit E Form of Common Securities Certificate Exhibit F Form of Agreement as to Expenses and Liabilities Exhibit G Form of Preferred Securities Certificate -iii- SOUTHWESTERN PUBLIC SERVICE CAPITAL I AMENDED AND RESTATED TRUST AGREEMENT, dated as of , 199 , among (i) David M. Wilks, President and Chief Operating Officer of Southwestern Public Service Company (the "Initial Depositor"), (ii) Southwestern Public Service Company, a New Mexico corporation (the "Depositor" or "SPS"), (iii) Wilmington Trust Company, a banking corporation duly organized and existing under the laws of the State of Delaware, as trustee (the "Property Trustee" and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iv) David M. Wilks, an individual, Robert D. Dickerson, an individual, and James D. Steinhilper, an individual, each of whose address is c/o SPS, Tyler at Sixth, Amarillo, Texas 79101 (each an "Administrative Trustee" and referred to collectively as the "Administrative Trustees") (the Property Trustee and the Administrative Trustees being referred to collectively as the "Trustees") and (v) the several Holders (as defined herein). W I T N E S S E T H: WHEREAS, the Initial Depositor and the Property Trustee have heretofore duly declared and established Southwestern Public Service Capital I (the "Trust") as a business trust pursuant to the Delaware Business Trust Act by the entering into of that certain Trust Agreement dated as of June 5, 1996 (the "Original Trust Agreement"), and by the execution and filing on June 5, 1996 by the Property Trustee with the Secretary of State of the State of Delaware of the Certificate of Trust attached hereto as Exhibit A; and WHEREAS, the Initial Depositor, the Property Trustee and SPS desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the resignation of the Initial Depositor and the assumption by SPS of all of his rights, interests, duties and obligations, (ii) the acquisition by the Trust from SPS of all of the right, title and interest in the Debentures (as defined herein), (iii) the issuance of the Common Securities (as defined herein) by the Trust to SPS, (iv) the issuance and sale of the Preferred Securities (as defined herein) by the Trust pursuant to the Underwriting Agreement (as defined herein) and (v) the appointment of the Administrative Trustees; NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties hereto, including the Holders, and intending to be legally bound hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I DEFINED TERMS Section 1.01. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 6.08. "Additional Amount" means the amount of Additional Interest Attributable to Deferral (as defined in the Subordinated Indenture) paid by the Depositor on a Like Amount of Debentures for such period. "Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the preamble to this Trust Agreement solely in his capacity as Administrative Trustee of the Trust heretofore formed and continued hereunder, and not in his individual capacity; or such Administrative Trustee's successor in interest in such capacity, or any successor administrative trustee appointed as herein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (i) a decree or order is entered by a court having jurisdiction in the premises (a) for relief in respect of such Person in an involuntary case or proceeding under the Federal Bankruptcy Code or any other Federal or state bankruptcy, insolvency, reorganization or similar law or (b) adjudging such Person a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of such Person under the Federal Bankruptcy Code or any other applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of any of its properties, or ordering the winding up or liquidation of any of its affairs, and any such decree or order remains unstayed and in effect for a period of 60 consecutive days; or (ii) such Person institutes a voluntary case or proceeding under the Federal Bankruptcy Code or any other applicable Federal or state law or any other case or proceeding to be adjudicated a bankrupt or insolvent, or such Person consents to the entry of a decree or order for relief in respect of such Person in any involuntary case or proceeding under the Federal -2- Bankruptcy Code or any other applicable Federal or state law or to the institution of bankruptcy or insolvency proceedings against such Person, or such Person files a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable Federal or state law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of any such Person or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. "Bankruptcy Laws" has the meaning specified in Section 10.10. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors or a duly authorized committee thereof and delivered to the Trustees. "Book-Entry Preferred Securities Certificates" means a beneficial interest in the Preferred Securities Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 5.09. "Business Day" means a day other than (x) a Saturday or a Sunday, (y) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed or (z) a day on which the Property Trustee's corporate trust office or SPS's principal office is closed for business. "Certificate Depository Agreement" means the agreement among the Trust, the Depositor and The Depository Trust Company, as the initial Clearing Agency, dated as of the Closing Date, relating to the Trust Certificates, substantially in the form attached hereto as Exhibit B, as the same may be amended and supplemented from time to time. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial Clearing Agency. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means the "Time of Delivery" as defined in the Underwriting Agreement, which date is also the date of execution and delivery of this Trust Agreement. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. -3- "Common Security" means a beneficial interest in the Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "Common Securities Certificate" means a certificate evidencing ownership of Common Securities, substantially in the form attached hereto as Exhibit E. "Corporate Trust Office" means the principal office of the Property Trustee located in Wilmington, Delaware. "Debenture Event of Default" means an "Event of Default" as defined in the Subordinated Indenture. "Debenture Redemption Date" means "Redemption Date" as defined in the Subordinated Indenture. "Debenture Trustee" means Wilmington Trust Company, a banking corporation duly organized and existing under the laws of the State of Delaware. "Debentures" means the $ aggregate principal amount of SPS % Deferrable Interest Subordinated Debentures, Series A Due 20 , issued pursuant to the Subordinated Indenture. "Definitive Preferred Securities Certificates" means either or both (as the context requires) of (i) Preferred Securities Certificates issued in typewritten, fully registered form as provided in Section 5.09(a) and (ii) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.11. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss.ss. 3801, et seq., as it may be amended from time to time. "Depositor" means SPS, as specified in the preamble to this Trust Agreement. "Distribution Date" has the meaning specified in Section 4.01(a). "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01. "Event of Default" means the occurrence of a Debenture Event of Default (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body). "Expense Agreement" means the Agreement as to Expenses and Liabilities between SPS and the Trust, substantially in the form attached as Exhibit F, as amended from time to time. "Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United States Code, as amended from time to time. -4- "Final Distribution" has the meaning set forth in Section 9.04. "Final Distribution Date" means the Date on which Debentures are to be distributed to Holders of Trust Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.04(a). "Global Certificate" shall mean the Preferred Securities Certificate or Certificates issued as specified in Section 5.09. "Guarantee" means the Guarantee Agreement executed and delivered by SPS and Wilmington Trust Company, a Delaware banking corporation, as trustee, contemporaneously with the execution and delivery of this Trust Agreement, as amended from time to time. "Holder" or "Securityholder" means a Person in whose name a Trust Security or Securities is registered in the Securities Register; any such Person shall be deemed to be a beneficial owner within the meaning of the Delaware Business Trust Act. "Investment Company Event" means the occurrence of a change in law or regulation or a change in the interpretation or application of any law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that the Trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective after , 199 . "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (i) Trust Securities having an aggregate Liquidation Amount equal to the principal amount of Debentures to be contemporaneously redeemed in accordance with the Subordinated Indenture and the proceeds of which will be used to pay the Redemption Price of such Trust Securities, or (ii) Debentures having a principal amount equal to the aggregate Liquidation Amount of the Trust Securities of the Holder to whom such Debentures are distributed, as the case may be. "Liquidating Trustee" means a Person appointed pursuant to Section 9.04(b), solely in its capacity as Liquidating Trustee of the Trust heretofore formed and continued hereunder and not in its individual capacity. "Liquidation Amount" means the stated amount of U.S. $25 per Trust Security. "Liquidation Distribution" has the meaning specified in Section 9.04(e). "Officers' Certificate" means a certificate signed by (i) the Chairman, the President, an Executive Vice President, a Senior Vice President, a Vice President, or the Treasurer of the Depositor and (ii) the Secretary or an Assistant Secretary of the Depositor, and delivered to the appropriate Trustee; provided, however, that such certificate may be signed by two of the officers listed in clause (i) above in lieu of being signed by one of such officers listed in such clause (i) and one of the officers listed in clause (ii) above. One of the officers signing an Officers' Certificate given pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. Any Officers' Certificate -5- delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee or the Depositor, but not an employee of the Trust, the Property Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding", when used with respect to Trust Securities, means, as of the date of determination, all Trust Securities theretofore authenticated and delivered under this Trust Agreement, except: (i) Trust Securities theretofore canceled by the Administrative Trustees or delivered to the Administrative Trustees for cancellation; (ii) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Preferred Securities; provided that, if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (iii) Trust Securities which have been paid pursuant to Section 4.04 or in exchange for or in lieu of which other Trust Securities have been authenticated and delivered pursuant to this Trust Agreement; provided, however, that in determining whether the Holders of the requisite aggregate Liquidation Amount of the Outstanding Trust Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Trust Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Trust Securities which such Trustee has actual knowledge of such ownership shall be so disregarded and (b) the foregoing shall not apply at any time when all of the outstanding Preferred Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate. Trust Securities so owned which have been pledged in good faith may be -6- regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Trust Securities and that the pledgee is not the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee. "Owner" means each Person who is the beneficial owner of a Book-Entry Preferred Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency). "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.08 and shall initially be the Bank. "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Bank in its trust department for the benefit of the Securityholders in which all amounts paid in respect of the Debentures will be held and from which the Property Trustee shall make payments to the Securityholders in accordance with Section 4.04. "Person" means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Security" means a beneficial interest in the Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "Preferred Securities Certificate" means a certificate evidencing ownership of Preferred Securities, substantially in the form attached as Exhibit G. "Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement, solely in its capacity as Property Trustee of the Trust heretofore formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Debenture Redemption Date shall be a Redemption Date for a Like Amount of Trust Securities. "Redemption Price" means, with respect to any date fixed for redemption of any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to such date. "Relevant Trustee" shall have the meaning specified in Section 8.10. "Securities Register" and "Securities Registrar" shall be as described in Section 5.04. "Securityholder" or "Holder" means a Person in whose name a Trust Security or Securities is registered in the Securities Register; any such Person shall be deemed to be a beneficial owner within the meaning of the Delaware Business Trust Act. -7- "Special Event" means either a Tax Event or an Investment Company Event. "Subordinated Indenture" means the Indenture, dated as of , 199 , between SPS and the Debenture Trustee, as trustee, as amended or supplemented from time to time. "Supplemental Indenture" means the Supplemental Indenture to the Indenture establishing the Debentures. "Tax Event" means the receipt by the Trust or the Depositor, as the case may be, of an Opinion of Counsel experienced in such matters to the effect that a relevant tax law change has occurred after , 199 . For purposes of the preceding sentence a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the publication of any judicial opinion interpreting such laws (or regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or regulations) (including official and unofficial opinions purporting to apply such laws and regulations to other Persons who have issued securities similar to the Debentures), which amendment, change, proposed amendment or change, opinion or interpretation could, if valid and enacted or applied to the Trust or the Depositor, result in (i) the Trust, either currently or within 90 days of the date thereof, becoming subject to United States Federal income tax with respect to interest received on the Debentures, (ii) interest payable by the Depositor on the Debentures attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States Federal income tax purposes or (iii) the Trust, either currently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Trust" means the Delaware business trust created and continued hereby and identified on the cover page to this Trust Agreement. "Trust Agreement" means this Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including all exhibits hereto, including, for all purposes of this Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are "automatically" deemed to be a part of and govern this Trust Agreement and any such modification, amendment or supplement, respectively. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this Trust Agreement was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or owing to, the Payment Account and (iii) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement. "Trust Security" means any one of the Common Securities or the Preferred Securities. -8- "Trust Securities Certificate" means any one of the Common Securities Certificates or the Preferred Securities Certificates. "Underwriting Agreement" means the Underwriting Agreement, dated , 199 , among the Trust, SPS and the several underwriters named therein. ARTICLE II ESTABLISHMENT OF THE TRUST Section 2.01. Name. The Trust created and continued hereby shall be known as "Southwestern Public Service Capital I," as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. Section 2.02. Office of the Property Trustee; Principal Place of Business. The office of the Property Trustee in the State of Delaware is Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration, or such other address in Delaware as the Property Trustee may designate by written notice to the Securityholders and the Depositor. The principal place of business of the Trust is c/o SPS, Tyler at Sixth, Amarillo, Texas 79101; Attention: Secretary. Section 2.03. Initial Contribution of Trust Property; Assignment of Initial Depositor's Rights and Duties; Organizational Expenses; Expense Agreement. (a) The Property Trustee acknowledges receipt, in trust from the Initial Depositor in connection with the Original Trust Agreement, of the sum of $10, which constituted the initial Trust Property. (b) The Initial Depositor hereby assigns, and the Depositor hereby assumes, all rights, title and interests and all duties and obligations of the Initial Depositor under the Original Trust Agreement. (c) The Depositor shall pay the organizational expenses of the Trust as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. (d) The Depositor agrees to execute and deliver the Expense Agreement pursuant to which the Depositor shall pay certain indebtedness, expenses or liabilities of the Trust. Section 2.04. Issuance of the Preferred Securities. On , 199 , the Depositor, on behalf of the Trust, executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the underwriters named therein Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, in an aggregate amount of Preferred Securities having an aggregate Liquidation Amount of $ against receipt of the aggregate purchase price of such Preferred Securities of $ . The consideration received by the Trust for the issuance of the Preferred Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. Section 2.05. Subscription and Purchase of Debentures; Issuance of the Common Securities. Contemporaneously with the execution and delivery of this Trust Agreement, the -9- Administrative Trustees, on behalf of the Trust, shall subscribe to and purchase from the Depositor Debentures, registered in the name of the Trust and having an aggregate principal amount equal to $ , and, in satisfaction of the purchase price for such Debentures, (x) the Administrative Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $ , and (y) contemporaneously therewith the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the Depositor Common Securities Certificates, registered in the name of the Depositor, in an aggregate amount of Common Securities having an aggregate Liquidation Amount of $ . The consideration received by the Trust for the issuance of the Common Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. Section 2.06. Declaration of Trust. The exclusive purposes of the Trust are (a) to issue Trust Securities, (b) to purchase the Debentures with the Common Securities and the proceeds from the sale of the Preferred Securities, and (c) to engage in those activities necessary or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Securityholders. The Administrative Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. Section 2.07. Authorization to Enter into Certain Transactions. (a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the following provisions (A) and (B), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (A) As among the Trustees, the Administrative Trustees shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) the issuance and sale of the Trust Securities; (ii) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the Expense Agreement and the Certificate Depository Agreement and such other agreements as may be necessary or desirable in connection with the purposes and function of the Trust; (iii) assisting in the registration of the Preferred Securities under the Securities Act of 1933, as amended, and under state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act; (iv) assisting in the listing of the Preferred Securities upon such securities exchange or exchanges as shall be determined by the Depositor and the registration of the Preferred Securities under the Securities Exchange Act of 1934, as amended, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; -10- (v) the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; (vi) the appointment of a Paying Agent, authenticating agent and Securities Registrar in accordance with this Trust Agreement; (vii) registering transfers of the Trust Securities in accordance with this Trust Agreement; (viii) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; (ix) unless otherwise determined by the Depositor, the Property Trustee or the Administrative Trustees, or as otherwise required by the Delaware Business Trust Act or the Trust Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or all of the Administrative Trustees) any documents that the Administrative Trustees have the power to execute pursuant to this Trust Agreement; and (x) the taking of any action incidental to the foregoing as the Administrative Trustees may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (B) As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) the establishment and maintenance of the Payment Account; (ii) the receipt of the Debentures; (iii) the collection of interest, principal and any other payments made in respect of the Debentures into the Payment Account; (iv) the distribution of amounts owed to the Securityholders in respect of the Trust Securities; (v) the sending of notices of default and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; (vi) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; -11- (vii) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; (viii) after the occurrence of an Event of Default, the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder); and (ix) subject to this Section 2.07(a)(B), the Property Trustee shall have none of the duties of the Administrative Trustees set forth in Section 2.07(a)(A). (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to be treated as an association taxable as a corporation for United States Federal income tax purposes, (iv) incur any indebtedness for borrowed money or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Administrative Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (c) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Initial Depositor or the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) to prepare for filing with the Commission a registration statement on Form S-3 in relation to the Preferred Securities, the Debentures and the Guarantee, including any amendments thereto; (ii) to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advise the Trustees of actions they must take on behalf of the Trust, and prepare for execution and filing any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States; (iii) to prepare for filing by the Trust an application to the New York Stock Exchange for listing upon notice of issuance of the Preferred Securities; (iv) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Securities Exchange Act of 1934, as amended, including any amendments thereto; -12- (v) to negotiate the terms of, and execute and deliver, the Underwriting Agreement providing for the sale of the Preferred Securities; and (vi) any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act of 1940, as amended, or taxed as a corporation for United States Federal income tax purposes and so that the Debentures will be treated as indebtedness of the Depositor for United States Federal income tax purposes. In so doing, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that the Depositor or any of the Administrative Trustees determines in its or his discretion to be necessary or desirable for such purposes, provided that such action does not adversely affect the interests of the Holders of the Preferred Securities. Any action not specifically assigned herein that the Trustees may be permitted or required to do under this Trust Agreement may be taken by majority vote of the Trustees. Section 2.08. Assets of the Trust. The assets of the Trust shall consist of the Trust Property. Section 2.09. Title to Trust Property. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders in accordance with this Trust Agreement. ARTICLE III PAYMENT ACCOUNT Section 3.01. Payment Account. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Security- holders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal or interest on, and any other payments or proceeds with respect to, the Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. -13- ARTICLE IV DISTRIBUTIONS; REDEMPTIONS Section 4.01. Distributions. (a) Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there are funds of the Trust available for the payment of Distributions. Distributions shall accrue from , 199 , and, except in the event that SPS exercises its right to extend the interest payment period for the Debentures pursuant to Section 101 of the Supplemental Indenture, shall be payable quarterly in arrears on , , and of each year, commencing on , 199 . If any date on which Distributions are otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such distribution shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date (each date on which distributions are payable in accordance with this Section 4.01(a), a "Distribution Date"). (b) The Trust Securities represent beneficial interests in the Trust, and, subject to Section 4.03 hereof, all Distributions will be made pro rata on each of the Trust Securities; distributions payable as a preference on the Preferred Securities shall be fixed at a rate of % per annum of the Liquidation Amount of the Preferred Securities. The amount of Distributions payable for any full quarterly period shall be computed on the basis of twelve 30-day months and a 360-day year and, for any period shorter than a full monthly period, shall be computed on the basis of the actual number of days elapsed in such period. If the interest payment period for the Debentures is extended pursuant to Section 101 of the Supplemental Indenture, then the rate per annum at which Distributions on the Trust Securities accumulate shall be increased by an amount such that the aggregate amount of Distributions that accumulate on all Trust Securities during any such extended interest payment period is equal to the aggregate amount of interest (including interest payable on unpaid interest at the percentage rate per annum set forth above, compounded quarterly) that accrues during any such extended interest payment period on the Debentures. The amount of Distributions payable for any period shall include the Additional Amounts, if any. (c) Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Date only to the extent that the Trust has funds legally and immediately available in the Payment Account for the payment of such Distributions. (d) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Day prior to such Distribution Date; provided, however, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the relevant Distribution Date. Section 4.02. Redemptions. (a) On each Debenture Redemption Date, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. (b) If (i) (x) a Special Event shall occur and be continuing and (y) within 45 days following the occurrence of such Special Event the Trustees shall not have received from the Debenture Trustee a notice of redemption of all of the Debentures on a Debenture Redemption Date (as specified -14- in such notice) which is to occur not later than 90 days following the occurrence of such Special Event, or (ii) if the Trust is not or will not be taxed as a grantor trust, but a Tax Event has not occurred, the Depositor may in its sole discretion direct the Trustees to, and the Trustees shall if so directed by the Depositor, dissolve the Trust and cause the Trust to distribute to each Holder of Trust Securities, in accordance with Section 9.04 and on a Liquidation Date which shall occur not later than 90 days following the occurrence of such Special Event, a Like Amount of Debentures in liquidation of the Trust; provided, however, that the Trustees shall be required to follow the direction of the Depositor to dissolve the Trust and distribute the Debentures to Holders of Trust Securities in accordance with this Section 4.02(b) and Section 9.04 only if the Trust shall have received an Opinion of Counsel experienced in such matters to the effect that the Holders of Preferred Securities will not recognize any gain or loss for United States Federal income tax purposes as a result of such distribution. The election of the Depositor to cause the Trust to be dissolved shall be evidenced by a Board Resolution. If the Trust is not dissolved pursuant to the preceding sentence and the Trust Securities remain Outstanding, then Additional Interest Attributable to Taxes (as defined in the Subordinated Indenture) will be payable on the Debentures. (c) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more than 90 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Securities Register. All notices of redemption shall identify the Trust Securities to be redeemed (including CUSIP number) and shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii) the place of payment where such Trust Securities are to be surrendered for payment of the Redemption Price; and (iv) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that, if the monies required to effect such redemption have been duly deposited by SPS with the Property Trustee, interest thereon will cease to accrue on and after said date. (d) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price shall be deemed payable on each Redemption Date only to the extent that the Trust has funds immediately available in the Payment Account for the payment of such Redemption Price. (e) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by 12:00 noon, New York time, on the Redemption Date, subject to Section 4.02(d), the Property Trustee shall, so long as the Preferred Securities are in book-entry-only form, irrevocably deposit with the Clearing Agency for the Preferred Securities funds sufficient to pay the applicable Redemption Price and, at the direction of the Depositor, shall give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders thereof; provided if the Property Trustee does not do so, it will be regarded as having revoked the notice of redemption. If the Preferred Securities are no longer in book-entry-only form, the Property Trustee, subject to Section 4.02(d), shall irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and -15- shall give the Paying Agent irrevocable instructions to pay the Redemption Price to the Holders thereof upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price, but without interest on such Redemption Price, and such Securities will cease to be outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Distribution shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is not paid either by the Trust or by the Depositor pursuant to the Guarantee, such Trust Securities shall be considered to remain outstanding and will continue to accrue, at the rate specified above, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. (f) Payment of the Redemption Price on the Trust Securities shall be made to the Owners thereof as they appear on the Securities Register on the relevant record date, which shall be one Business Day prior to the relevant Redemption Date; provided, however, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the fifteenth day prior to the Redemption Date. (g) If less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated to the Common Securities and the Preferred Securities on a pro rata basis based upon their respective aggregate Liquidation Amounts. The particular Preferred Securities to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 or any integral multiple thereof) of the aggregate Liquidation Amount of Preferred Securities of a denomination larger than $25. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Preferred Securities which has been or is to be redeemed. Section 4.03. Subordination of Common Securities. (a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, the Trust Securities, as applicable, shall be made pro rata based on the aggregate Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional Amounts, if applicable) on, or Redemption Price of, any Common Security, and no other payment on account of -16- the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) payable as a preference on all Outstanding Preferred Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities called for redemption, shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or the Redemption Price of, Preferred Securities then due and payable. (b) In the case of the occurrence of any Debenture Event of Default, the Holder of Common Securities will be deemed to have waived any right to act with respect to any Event of Default until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until any such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act in accordance with Article VIII hereof and solely on behalf of the Holders of the Preferred Securities and not the Holder of the Common Securities. In such event, only the Holders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf. Section 4.04. Payment Procedures. Payments in respect of the Preferred Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Preferred Securities are held by a Clearing Agency, payments shall be made by wire transfer to the Clearing Agency, which shall credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Dates. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Common Securityholder. Section 4.05. Tax Returns and Reports. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States Federal, state and local tax and information returns (including, without limitation, Form 8281 which must be filed by an issuer of an original issue discount security) and reports required to be filed by or in respect of the Trust. In this regard, the Administrative Trustees shall prepare and file (or cause to be prepared or filed) the Internal Revenue Service forms required to be filed in respect of the Trust in each taxable year of the Trust. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns, reports and schedules promptly after such filing or furnishing. The Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities. Section 4.06. Payment of Taxes, Duties, Etc. of the Trust. Upon receipt under the Debentures of Additional Interest Attributable to Taxes (as defined in the Subordinated Indenture), the Property Trustee shall distribute to the Administrative Trustees an amount requested by them and they shall promptly pay any taxes, duties, assessments or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority. -17- ARTICLE V TRUST SECURITIES CERTIFICATES Section 5.01. Initial Ownership. Upon the formation of the Trust and the contribution by the Initial Depositor pursuant to Section 2.03 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Initial Depositor shall be the sole beneficial owner of the Trust. Section 5.02. The Trust Securities Certificates. Initial Holders shall purchase Preferred Securities in minimum denominations of $25 (based on Liquidation Amount) and integral multiples of $25 in excess thereof, and the Common Securities Certificates shall be issued in denominations of $25 (based on Liquidation Amount) and integral multiples thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by the facsimile or manual signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Section 5.04. Section 5.03. Delivery of Trust Securities Certificates. On the Closing Date, the Administrative Trustees shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust and delivered to or upon the written order of the Depositor signed by its chairman of the board, its president, any executive vice president, any senior vice president, any vice president, the treasurer or secretary without further corporate action by the Depositor, in authorized denominations. Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates. The Securities Registrar shall keep or cause to be kept a Securities Register in which, subject to such reasonable regulations as it may prescribe, the Securities Registrar shall provide for the registration of Trust Securities Certificates and registration of transfers and exchanges of Trust Securities Certificates as herein provided. The Bank shall be the initial Securities Registrar. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Bank in its role as Securities Registrar. Upon surrender for the registration of the transfer of any Trust Securities Certificate, the Administrative Trustees or any one of them shall execute and deliver, in the name of the designated transferee or transferees, one or more new Trust Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of execution by such Administrative Trustee or Trustees. The Securities Registrar shall not be required to register the transfer of any Trust Securities that have been called for redemption. At the option of a Holder, Trust Securities Certificates may be exchanged for other Trust Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Trust Securities Certificates to be exchanged. Every Trust Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer, in form satisfactory to the -18- Administrative Trustees and the Securities Registrar, duly executed by the Holder or his or her attorney. Each Trust Securities Certificate surrendered for registration of a transfer or exchange shall be canceled and subsequently disposed of by the Administrative Trustees. No service charge shall be made for any registration of transfer or exchange of Trust Securities Certificates, but the Administrative Trustees or the Securities Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Trust Securities Certificates. Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate, and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees or any one of them on behalf of the Trust shall execute and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of a beneficial interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. Section 5.06. Persons Deemed Securityholders. Prior to due presentation of a Trust Securities Certificate for registration of transfer, the Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving distributions and for all other purposes whatsoever, and neither the Trustees nor the Securities Registrar shall be bound by any notice to the contrary. Section 5.07. Access to List of Securityholders' Names and Addresses. In addition to, and not by way of limitation of, the Depositor's obligations under Section 312(a) of the Trust Indenture Act, the Depositor shall furnish or cause to be furnished to the Property Trustee semi-annually, not later than February 15 and August 15 of each year, a list in such form as the Property Trustee may reasonably require, of the names and addresses of all Owners of Preferred Securities. The Securities Registrar shall furnish or cause to be furnished (x) to the Depositor, within 15 days after receipt by the Securities Registrar of a request therefor from the Depositor in writing and (y) to the Property Trustee, promptly after receipt by the Securities Registrar of a request therefor from the Property Trustee , a list, in such form as the Depositor or the Property Trustee (as applicable) may reasonably require, of the names and addresses of the Securityholders as of the most recent record date. In addition to, and not by way of limitation of, the provisions of Section 312(b) of the Trust Indenture Act, if one or more Holders of Trust Securities Certificates evidencing not less than 25% of the Liquidation Amount of the outstanding Preferred Securities apply in writing to the Securities Registrar, and such application states that the applicants desire to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities Certificates, and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Securities Registrar shall, within five -19- Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Securityholders. Each Holder, by receiving and holding a Trust Securities Certificate, shall be deemed to have agreed not to hold either the Depositor or the Securities Registrar accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. Section 5.08. Appointment of Paying Agent. The Paying Agent shall make distributions to Securityholders from the Payment Account and shall report the amounts of such distributions to the Property Trustee and the Administrative Trustees. The Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the distributions referred to above. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Paying Agent shall initially be the Bank, and the Paying Agent may choose any co-paying agent that is acceptable to the Administrative Trustees, the Property Trustee and the Depositor. Any Person acting as a Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that the Bank shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor that is acceptable to the Property Trustee and the Depositor to act as Paying Agent (which shall be a bank, trust company or the Depositor). The Administrative Trustees shall cause such successor Paying Agent or any co-paying agent appointed by the Paying Agent to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Any Paying Agent shall hold in trust for the benefit of the Preferred Securityholders all sums held by such Paying Agent for payment on the Preferred Securities, and shall give the Property Trustee notice of any default hereunder by either the Trust or the Depositor. Section 5.09. Book-Entry Preferred Securities Certificates; Common Securities Certificate. (a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities Certificates to be delivered to The Depository Trust Company, the initial Clearing Agency, or to a custodian designated by it, by, or on behalf of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will receive a definitive Preferred Securities Certificate representing such Owner's interest in such Preferred Securities, except as provided in Section 5.11. Unless and until Definitive Preferred Securities Certificates have been issued to Owners pursuant to Section 5.11: (i) the provisions of this Section 5.09(a) shall be in full force and effect; -20- (ii) the Securities Registrar, the Paying Agent and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of principal of and interest on the Book-Entry Preferred Securities and the giving of instructions or directions to Owners of Book-Entry Preferred Securities) as the sole Holder of Book-Entry Preferred Securities, and shall have no obligations to the Owners thereof; (iii) to the extent that the provisions of this Section 5.09 conflict with any other provisions of this Trust Agreement, the provisions of this Section 5.09 shall control; (iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 5.11, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants; and (v) whenever this Trust Agreement requires or permits actions to be taken based upon the instructions or directions of Holders of Trust Certificates evidencing a specified percentage of the aggregate Liquidation Amount, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the applicable class of Trust Certificates and has delivered such instructions to the Administrative Trustees. (b) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate. In the event that the Depositor shall transfer any of its Common Securities, additional Common Securities Certificates, in definitive form, may be issued if required. Section 5.10. Notices to Clearing Agency. To the extent a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners pursuant to Section 5.11, the Trustees shall give all such notices and communications specified herein to be given to the Clearing Agency, and shall have no obligations to the Owners. Section 5.11. Definitive Preferred Securities Certificates. If (i) the Depositor advises the Trustees in writing that the Clearing Agency is no longer willing or able properly to discharge its responsibilities with respect to the Preferred Securities Certificates, and the Depositor is unable to locate a qualified successor, (ii) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency or (iii) after the occurrence of an Event of Default, Owners of Preferred Securities Certificates representing beneficial interests aggregating at least a majority of the Liquidation Amount advise the Clearing Agency in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interest of the Owners of Preferred Securities Certificates, then the Clearing Agency shall notify all Owners of Preferred Securities Certificates and the Trustees of the occurrence of any such event and of the availability of the Definitive -21- Preferred Securities Certificates to Owners of such class or classes, as applicable, requesting the same. Upon surrender to the Administrative Trustees by the Clearing Agency of the typewritten Preferred Securities Certificate or Certificates representing the Book-Entry Preferred Securities Certificates, accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them. Section 5.12. Rights of Securityholders. The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.09. The Securityholders shall not have any right or title therein other than the beneficial interest in the Trust conferred by their Trust Securities, and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable by the Trust. The Holders of the Trust Securities, in their capacities as such, shall, except as otherwise set forth herein, be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. The right of any Holder of Trust Securities to receive payment of Distributions on the Trust Securities in accordance with this Trust Agreement and the terms of the Trust Securities on or after the respective payment dates thereof, or to institute suit for the enforcement of any such payments on or after such payment dates, shall not be impaired without the consent of each such Holder. ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING Section 6.01. Limitations on Voting Rights. (a) Except as provided in this Section, in Sections 8.10 and 10.02 hereof, and in the Subordinated Indenture, and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association. (b) So long as any Debentures are held by the Property Trustee on behalf of the Trust, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to such Debentures, (ii) waive any past default which is waivable under Section 513 of the Subordinated Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable or (iv) consent to any amendment, modification or -22- termination of the Subordinated Indenture or the Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a majority in Liquidation Amount of the Outstanding Trust Securities; provided, however, that where a consent under the Subordinated Indenture would require the consent of each holder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each holder of Trust Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Trust Securities, except pursuant to a subsequent vote of the Outstanding Trust Securities. The Property Trustee shall notify all Holders of the Trust Securities of any notice of default received from the Debenture Trustee with respect to the Debentures. In addition to obtaining the foregoing approvals of the Holders of the Outstanding Trust Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that the Trust will not be classified as an association taxable as a corporation for United States Federal income tax purposes on account of such action. (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Trust Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Trust Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a majority in Liquidation Amount of the Outstanding Trust Securities. No amendment to this Trust Agreement may be made if, as a result of such amendment, the Trust would be classified as an association taxable as a corporation for United States Federal income tax purposes. Section 6.02. Notice of Meetings. Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of the meeting, shall be given by the Administrative Trustees pursuant to Section 10.07 to each Trust Securityholder of record, at his or her registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. Any and all notices to which any Trust Securityholder hereunder may be entitled and any and all communications shall be deemed duly served or given if mailed, postage prepaid, addressed to any Preferred Securityholder of record at his last known address as recorded on the Securities Register. Section 6.03. Meetings of Trust Securityholders. No annual meeting of Security- holders is required to be held. The Administrative Trustees, however, shall call a meeting of Security- holders to vote on any matter upon the written request of Securityholders of record holding 25% (based upon aggregate Liquidation Amount) of the Outstanding Trust Securities, and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Securityholders to vote on any matters as to which Securityholders are entitled to vote. Securityholders of record holding 50% or more of the Trust Securities (based upon aggregate Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders. If a quorum is present at a meeting, an affirmative vote by the Securityholders of record present, in person or by proxy, at such meeting holding more than a majority of the Outstanding Trust -23- Securities (based upon aggregate Liquidation Amount) shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes. Section 6.04. Voting Rights. Securityholders shall be entitled to one vote for each $25 of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. Securityholders' voting rights shall be as provided by Section 316 of the Trust Indenture Act. Section 6.05. Proxies, Etc. At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a request by the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid later than thirty-six (36) full calendar months after its date of execution (or such shorter period as may be provided therein). Section 6.06. Securityholder Action by Written Consent. Any action which may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding more than a majority of all Outstanding Trust Securities (based upon aggregate Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing. Section 6.07. Record Date for Voting and Other Purposes. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may, in the circumstances permitted under the Trust Indenture Act, from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders, the payment of any distribution or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. If not set by the Administrative Trustees prior to the first solicitation of a Securityholder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 5.07) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. Section 6.08. Acts of Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in -24- writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.01) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee receiving the same deems sufficient. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between the Securityholders and the Administrative Trustees or among such Securityholders or Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. Section 6.09. Inspection of Records. Subject to Section 5.07 concerning access to the list of Securityholders, upon reasonable notice to the Administrative Trustees and the Property Trustee, the other records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. -25- ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BANK Section 7.01. Representations and Warranties. The Bank hereby represents and war- rants for the benefit of the Depositor and the Securityholders that: (a) the Bank is a banking corporation or trust company duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) the Bank has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by the Bank and constitutes the valid and legally binding agreement of the Bank enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the execution, delivery and performance by the Bank of this Trust Agreement have been duly authorized by all necessary corporate action on the part of the Bank and do not require any approval of stockholders of the Bank, and such execution, delivery and performance will not (i) violate the Bank's Charter or By-laws, (ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which the Bank is a party or by which it is bound, or (iii) violate any law, governmental rule or regulation of the United States or the State of Delaware governing the banking or trust powers of the Bank or any order, judgment or decree applicable to the Bank; (e) neither the authorization, execution or delivery by the Bank of this Trust Agreement nor the consummation of any of the transactions by the Bank contemplated herein or therein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to, any governmental authority or agency under any existing Federal law governing the banking or trust powers of the Bank or under the laws of the State of Delaware; and (f) there are no proceedings pending or, to the best of the Bank's knowledge, threatened against or affecting the Bank in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Bank to enter into or perform its obligations as one of the Trustees under this Trust Agreement. -26- ARTICLE VIII THE TRUSTEES Section 8.01. Certain Duties and Responsibilities. (a) The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee, by the Trust Indenture Act. The Trustees shall have all the privileges, rights and immunities provided by the Delaware Business Trust Act. Notwithstanding the foregoing, no provision of this Trust Agreement shall require any of the Trustees to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. To the extent that, at law or in equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the Securityholders, such Trustee shall not be liable to the Trust or to any Securityholder for such Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of the Trustees. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section and, in the case of the Property Trustee, to the provisions of the Trust Indenture Act. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the income and proceeds from the Trust Property. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the income and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.01(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Trust Agreement and no implied covenants shall be read into this Trust Agreement against the Property Trustee. In case an Event of Default has occurred (that has not been cured or waived), the Property Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; -27- (ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; (iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Payment Account shall be to deal with such Property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act; (iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.01 and except to the extent otherwise required by law; (v) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with respect to their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor; and (vi) the Property Trustee shall have no responsibility for the genuineness, value or sufficiency of the Debentures, or for the payment of any taxes assessed or levied thereon. Section 8.02. Notice of Defaults. Within five Business Days after the occurrence of any Event of Default actually known to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.09, notice of such Event of Default to the Securityholders, the Administrative Trustees and the Depositor, unless such default shall have been cured or waived. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. Section 8.03. Certain Rights of the Property Trustee. Subject to the provisions of Section 8.01 and except as provided by law: (a) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; -28- (b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (ii) in construing any of the provisions in this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken. The Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (c) any direction or act of the Depositor or the Administrative Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate; (d) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be established before undertaking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor or the Administrative Trustees; (e) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or reregistration thereof; (f) the Property Trustee may consult with counsel and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction; (g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; -29- (h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Securityholders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; (i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, provided that the Property Trustee shall be responsible for its own negligence or recklessness with respect to selection of any agent or attorney appointed by it hereunder; (j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder the Property Trustee (i) may request instructions from the Holders of the Trust Securities which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions; and, (k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement. No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty. Section 8.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees shall not be accountable for the use or application by the Trust of the proceeds of the Trust Securities, provided that such use or application is in accordance with Section 2.05. Section. 8.05. May Hold Securities. Except as provided in the definition of the term "Outstanding" in Article I, any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent. -30- Section 8.06. Compensation; Fees; Indemnity. The Depositor and the Trust each agrees: (1) to pay to the Trustees from time to time such compensation as the Depositor and the Trustees shall from time to time agree in writing for all services rendered by the Trustees hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify each of the Trustees or any predecessor Trustee for, and to hold the Trustees harmless against, any and all loss, damage, claims, liability, penalty or expense, including taxes, other than taxes based on the income of the Trustee or withholding taxes imposed with respect to payments on the Trust Securities, incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Trust Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The provisions of this Section 8.06 shall survive the termination of this Trust Agreement, and to secure the same, the Property Trustee shall have a lien against the Trust Property which lien shall be prior to the claims of the Securityholders. Section 8.07. Corporate Property Trustee Required; Eligibility of Trustees. (a) There shall at all times be a Property Trustee, qualified as provided in Section 310(a) of the Trust Indenture Act, hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that has (a) a combined capital and surplus of at least $50,000,000 and (b) an unsecured or deposit rating of at least investment grade by each of Standard & Poor's Corporation and Moody's Investors Services, Inc. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind such entity. Section 8.08. Conflicting Interests. None of the Trust, SPS or any Person directly or indirectly controlling, controlled by or under common control with either the Trust or SPS may serve as Property Trustee hereunder. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, -31- to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. Section 8.09. Co-Trustees and Separate Trustees. Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Administrative Trustees, shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such property, in accordance with Section 310(a) of the Trust Indenture Act, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case a Debenture Event of Default has occurred and is continuing, the Administrative Trustees and the Property Trustee, respectively, alone shall have power to make such appointment. Any co-trustee or separate trustee appointed pursuant to this Section shall satisfy the requirements of Section 8.07. Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged, and delivered by the Depositor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (1) The Trust Securities shall be executed and delivered, and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees specified hereunder, shall be exercised, solely by such Trustees. (2) The rights, powers, duties and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such Act, in which event such rights, powers, duties, and obligations shall be exercised and performed by such co-trustee or separate trustee. (3) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case an Event of Default under the Subordinated Indenture has occurred and is continuing, the -32- Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (4) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee, or any other trustee hereunder. (5) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee. (6) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. Upon receipt of such Act of Holders, the Property Trustee shall promptly deliver a copy thereof to each such co-trustee and separate trustee. Section 8.10. Resignation and Removal; Appointment of Successor. No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Relevant Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Relevant Trustee in accordance with the applicable requirements of Section 8.11. The Relevant Trustee may resign at any time with respect to the Trust Securities by giving written notice thereof to the Securityholders. If the instrument of acceptance by a successor Relevant Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 30 days after the giving of such notice of resignation, the resigning Relevant Trustee may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities. Unless an Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at any time by the Depositor. If an Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at such time by Act of the Securityholders of a majority in aggregate Liquidation Amount of the Trust Securities Certificates then Outstanding, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). In the event that any Securityholder is deemed to have waived the right to act to remove the Relevant Trustee, then for the purpose of determining whether a majority in aggregate Liquidation Amount of Trust Security Certificates have acted to remove the Relevant Trustee, the Trust Securities of such Securityholders shall be treated as if they are not Outstanding. If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as Relevant Trustee at a time when no Event of Default shall have occurred and be continuing, the Depositor, by delivering notice to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with respect to the Trust Securities and the Trust, and the retiring Relevant Trustee shall comply with the applicable requirements of Section 8.11. If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as the Relevant Trustee at a time when an Event of Default shall have occurred and be continuing, the Securityholders, by Act of the -33- Securityholders of a majority in Liquidation Amount of the Trust Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with respect to the Trust Securities and the Trust, and the Relevant Trustee shall comply with the applicable requirements of Section 8.11. In the event that any Securityholder is deemed to have waived the right to appoint a successor Relevant Trustee or Trustees with respect to the Trust Securities and the Trust, then for the purpose of determining whether a majority in aggregate Liquidation Amount of the Trust Securities then Outstanding have acted to appoint a successor Relevant Trustee or Trustees with respect to the Trust Securities and the Trust, the Trust Securities of such Securityholder shall be treated as if they are not Outstanding. If no successor Relevant Trustee with respect to the Trust Securities shall have been so appointed by the Depositor or the Trust Securityholders and have accepted such appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities. The retiring Relevant Trustee shall give notice of each resignation and each removal of such Relevant Trustee and each appointment of a successor Relevant Trustee with respect to the Trust Securities and the Trust to all Securityholders in the manner provided in Section 10.09 and to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Property Trustee who is a natural person dies or becomes incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the unanimous act of remaining Administrative Trustees if there are at least two of them or (ii) otherwise by the Depositor (with the successor in each case being an individual who satisfies the eligibility requirement for Administrative Trustees set forth in Section 8.07). Additionally, notwithstanding the foregoing or any other provision of this Trust Agreement, in the event the Depositor believes that any Administrative Trustee has become incompetent or incapacitated, the Depositor, by notice to the remaining Trustees, may terminate the status of such Person as an Administrative Trustee (in which case the vacancy so created will be filled in accordance with the preceding sentence). Section 8.11. Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Relevant Trustee with respect to all Trust Securities and the Trust, every such successor Relevant Trustee so appointed shall execute, acknowledge and deliver to the Trust and to the retiring Relevant Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Relevant Trustee shall become effective, and such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on the request of the Depositor or the successor Relevant Trustee, such retiring Relevant Trustee shall, upon payment of charges due to such retiring Relevant Trustee, execute and deliver an instrument transferring to such successor Relevant Trustee all the rights, powers and trusts of the retiring Relevant Trustee and shall duly assign, transfer and deliver to such successor Relevant Trustee all property and money held by such retiring Relevant Trustee hereunder. In case of the appointment hereunder of a successor Relevant Trustee with respect to the Trust Securities and the Trust, the retiring Relevant Trustee and each successor Relevant Trustee with respect to the Trust Securities shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (1) shall contain such provisions as shall be -34- necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust and (2) shall add to or change any of the provisions of this Trust Agreement as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Relevant Trustee, it being understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees of the same trust and that each such Relevant Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Relevant Trustee, and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust; but, on request of the Trust or any successor Relevant Trustee, such retiring Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust. Upon request of any such successor Relevant Trustee, the Administrative Trustees on behalf of the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in this Section 8.11. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article. Section 8.12. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Property Trustee or any Administrative Trustee which is not a natural person may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, shall be the successor of such Relevant Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper or any further act on the part of any of the parties hereto. Section 8.13. Preferential Collection of Claims Against Depositor or Trust. If and when the Property Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Debentures or the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or the Trust (or any such other obligor). Section 8.14. Reports by the Property Trustee. (a) Within 60 days after December 31 of each year commencing with December 31, 199_, the Property Trustee shall transmit by mail to all Securityholders, as their names and addresses appear in the Securities Register, and to the Depositor, a brief report dated as of such December 31 with respect to: (i) its eligibility under Section 8.07 or, in lieu thereof, if to the best of its knowledge it has continued to be eligible under said Section, a written statement to such effect; and -35- (ii) any action taken by the Property Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Trust Securities. (b) In addition, the Property Trustee shall transmit to Securityholders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with each stock exchange upon which the Trust Securities are listed, with the Commission and with the Depositor. Section 8.15. Reports to the Property Trustee. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information (if any) as may be required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act, in each case in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. Section 8.16. Evidence of Compliance with Conditions Precedent. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officers' Certificate. Section 8.17. Number of Trustees. (a) The number of Trustees shall be four, provided that the Depositor, by written instrument, may increase or decrease the number of Trustees. (b) If a Trustee ceases to hold office for any reason, and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. Section 8.18. Delegation of Power. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 2.07(a), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing. -36- (b) The Administrative Trustees shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. ARTICLE IX TERMINATION AND LIQUIDATION Section 9.01. Termination upon Expiration Date. Unless earlier terminated, the Trust shall automatically terminate on , 20 (the "expiration date"), following the distribution of the Trust Property in accordance with Section 9.04. Section 9.02. Early Termination. Upon the first to occur of any of the following events (such first occurrence, an "Early Termination Event"): (i) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, a Common Securityholder; (ii) the Depositor has elected to cause the Trust to be dissolved pursuant to Section 4.02(b); (iii) the redemption of all of the Preferred Securities; and (iv) the issuance of an order for dissolution of the Trust by a court of competent jurisdiction; the Trust shall automatically terminate following (except in the case of clause (i)) the distribution of the Trust Property in accordance with Section 9.04. Section 9.03. Termination. Except in the case of a termination pursuant to Section 9.02(i), the respective obligations and responsibilities of the Trustees and the Trust created and continued hereby shall terminate upon the latest to occur of the following: (i) the distribution by the Property Trustee to Securityholders, upon the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust Securities pursuant to Section 4.02, of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (ii) the payment of any expenses owed by the Trust; and (iii) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust and the Securityholders. In the case of a termination pursuant to Section 9.02(i), the respective obligations and responsibilities of the Trustees and the Trust created and continued hereby shall terminate without any further action upon the occurrence of the event specified in Section 9.02(i). Section 9.04. Liquidation. (a) If an Early Termination Event specified in clause (ii) of Section 9.02 occurs, the Trustees shall, as expeditiously as the Trustees determine to be practicable, make a final distribution (a "Final Distribution") distributing, subject to receipt of an Opinion of Counsel as specified in Section 4.02(b), to each Securityholder a Like Amount of Debentures, subject to -37- Section 9.04(e). Notice of such Final Distribution shall be given by the Administrative Trustees by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Final Distribution Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. Any such notice of Final Distribution shall: (i) state the Liquidation Date; (ii) state that from and after the Final Distribution Date, the Trust Securities will no longer be deemed to be outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Debentures; and (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Debentures, or if Section 9.04(e) applies receive a Final Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate. (b) If an Early Termination Event specified in clause (i) of Section 9.02 occurs, a Liquidating Trustee may be appointed (which Liquidating Trustee may be the same Person as the Property Trustee) by Act of the Securityholders of a majority in aggregate Liquidation Amount of the Outstanding Trust Securities or by a court of competent jurisdiction. Any such Liquidating Trustee shall (unless otherwise instructed by a court of competent jurisdiction) distribute the Trust Property in substantially the same manner as described in Section 9.04(a), (c) and (d), or, if deemed appropriate by such Liquidating Trustee, shall liquidate the Trust Property and distribute the proceeds in substantially the same manner as described in Section 9.04(e). (c) Except where Section 9.04(e) applies, in order to effect the Final Distribution of the Debentures to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days prior to the Final Distribution Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Debentures in exchange for the Outstanding Trust Securities Certificates. (d) Except where Section 9.04(e) applies, after the Final Distribution Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Debentures will be issued to Holders of Trust Securities Certificates, upon surrender of such certificates to the Administrative Trustees or their agent for exchange, (iii) SPS shall use its reasonable efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed, (iv) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Debentures, accruing interest at the rate provided for in the Debentures from the last Distribution Date on which a Distribution was made on such Trust Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates with respect to such Debentures) and (v) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive Debentures upon surrender of Trust Securities Certificates. (e) In the event that, notwithstanding the other provisions of this Section 9.04, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Debentures in the manner provided herein is determined by the Property Trustee (or the -38- Liquidating Trustee if one is appointed pursuant to Section 9.04(b)) not to be practical, the Trust Property shall be liquidated, the proceeds distributed and the Trust Certificates cancelled by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date specified by the Property Trustee, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors, an amount equal to the Liquidation Amount per Trust Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such termination pro rata (determined as aforesaid) with Holders of Preferred Securities, except that, if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities. ARTICLE X MISCELLANEOUS PROVISIONS Section 10.01. Limitation on Rights of Securityholders. The death or incapacity of any person having an interest, beneficial or otherwise, in a Trust Security shall not operate to terminate this Trust Agreement, nor entitle the legal representatives or heirs of such person or any Securityholder for such person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Section 10.02. Amendment. (a) This Trust Agreement may be amended from time to time by the Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will not be classified for United States Federal income tax purposes as an association taxable as a corporation at any time that any Trust Securities are outstanding or to ensure that the Trust will not be required to register as an "investment company" under the Investment Company Act of 1940, as amended; provided, however, that such amendment or action shall not adversely affect the rights of any Securityholder and, in the case of clause (i), any amendments of this Trust Agreement shall become effective only when notice thereof is given to the Securityholders. (b) Except as provided in Section 10.02(c) hereof, any provision of this Trust Agreement may be amended by the Trustees and the Depositor with (i) the consent of Trust Securityholders representing not less than a majority (based upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States Federal income tax purposes or cause the Trust to fail or cease to qualify for an exemption from the status of an "investment company" under the Investment Company Act of 1940, as amended. -39- (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Section 6.03 or 6.06 hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such Distribution on or after such date. Notwithstanding any other provision herein, without the unanimous consent of the Securityholders (such consent being obtained in accordance with Section 6.03 or 6.06 hereof), paragraph (b) of this Section 10.02 may not be amended. (d) Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for an exemption from status of an "investment company" under the Investment Company Act of 1940, as amended. (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. (g) The Property Trustee shall not be required to enter into any amendment to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officers' Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement. Section 10.03. Separability. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 10.04. Tax Elections. Each holder of Trust Securities, including any subsequent holder of Trust Securities, by accepting a Trust Security grants to the Depositor a power of attorney to file any election (including any protective election) that is necessary or desirable to cause the Trust to be treated for income tax purposes as a grantor trust and/or not as an association taxable as a corporation. Section 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Section 10.06. Successors. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Trust or the Relevant Trustee or both, including any successor by operation of law. -40- Section 10.07. Headings. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. Section 10.08. Intention of Parties. It is the intention of the parties hereto that the Trust not be classified for United States Federal income tax purposes an association taxable as a corporation or partnership but that the Trust be treated as a grantor trust for United States Federal income tax purposes. The provisions of this Trust Agreement shall be interpreted to further this intention of the parties. Section 10.09. Notice and Demand. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (i) in the case of a Preferred Securityholder, to such Preferred Securityholder as such Securityholder's name and address may appear on the Securities Register and (ii) in the case of the Common Securityholder or the Depositor, to Southwestern Public Service Company, Tyler at Sixth, Amarillo, Texas 79101, Attention: Secretary, facsimile no. (806) 378-2995. Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee or the Administrative Trustees shall be given in writing addressed (until another address is furnished in writing) as follows: (i) with respect to the Property Trustee, Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration; and (ii) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked "Attention: Administrative Trustees of Southwestern Public Service Capital I, c/o Secretary." Such notice, demand or other communication to or upon the Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust or the Property Trustee. Section 10.10. Agreement Not to Petition. Each of the Trustees and the Depositor agree for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.10, the Property Trustee agrees, for the benefit of Securityholders, that, at the expense of Depositor, the Property Trustee will file an answer with the bankruptcy court or otherwise properly contest the filing of such petition against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Trustee or the Trust may assert. The provisions of this Section 10.10 shall survive the termination of this Trust Agreement. -41- Section 10.11. Trust Indenture Act; Conflict with Trust Indenture Act. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Trust Agreement by any of the required provisions of the Trust Indenture Act or otherwise limits, qualifies or conflicts with the duties imposed by Sections 310 through 317 inclusive of the Trust Indenture Act, such required or imposed provision shall control. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. ------------- -42- IN WITNESS WHEREOF, the undersigned have executed and delivered this Trust Agreement, in the case of SPS, the Bank and the Property Trustee by their representatives thereunto duly authorized. ----------------------------------- David M. Wilks, as Initial Depositor SOUTHWESTERN PUBLIC SERVICE COMPANY, as Depositor By: -------------------------------- Name: Title: WILMINGTON TRUST COMPANY, as Property Trustee By: -------------------------------- Name: Title: WILMINGTON TRUST COMPANY By: --------------------------------- Name: Title: --------------------------------- David M. Wilks, as Administrative Trustee ------------------------------------------- Robert D. Dickerson, as Administrative Trustee ------------------------------------------- James D. Steinhilper, as Administrative Trustee -43- EXHIBIT A CERTIFICATE OF TRUST OF SOUTHWESTERN PUBLIC SERVICE CAPITAL I THIS CERTIFICATE OF TRUST of Southwestern Public Service Capital I (the "Trust"), dated June 5, 1996, is being duly executed and filed by the undersigned, as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. c. ss.ss. 3801 et seq.). 1. Name. The name of the business trust being formed hereby is Southwestern Public Service Capital I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware is Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration. 3. Effective Date. This Certificate of Trust shall be effective as of its filing. IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this Certificate of Trust as of the date first above written. WILMINGTON TRUST COMPANY, as Trustee By: -------------------------------- Name: Donald G. MacKelcan Title: Assistant Vice President A-1 EXHIBIT B CERTIFICATE DEPOSITORY AGREEMENT _______ __, 1996 The Depository Trust Company 55 Water Street, 49th Floor New York, New York 10041-0099 Attention: General Counsel's Office Re: Southwestern Public Service Capital I ____% Trust Preferred Securities, Series ___ Ladies and Gentlemen: The purpose of this letter is to set forth certain matters relating to the issuance and deposit with The Depository Trust Company ("DTC") of the Southwestern Public Service Capital I ____% Trust Preferred Securities, Series __ (the "Preferred Securities"), of Southwestern Public Service Capital I, a Delaware business trust (the "Issuer"), formed pursuant to a Trust Agreement between David M. Wilks, as Initial Depositor and Wilmington Trust Company (the "Bank"), as amended and restated in an Amended and Restated Trust Agreement dated as of ______, 199_ among the Initial Depositor, Southwestern Public Service Company ("SPS"), the Bank and David M. Wilks, Robert D.Dickerson, and James D. Steinhilper as Trustees (the "Trustees"). The payment of distributions on the Preferred Securities and payments due upon liquidation of the Issuer or redemption of the Preferred Securities are to be guaranteed by SPS to the extent set forth in a Guarantee Agreement dated _______________, ____ by SPS and Wilmington Trust Company, as guarantee trustee, with respect to the Preferred Securities. SPS and the Issuer propose to sell the Preferred Securities to certain Underwriters (the "Underwriters") pursuant to an Underwriting Agreement dated __________, _______ by and among the Underwriters, the Issuer and SPS, and the Underwriters wish to take delivery of the Preferred Securities through DTC. To induce DTC to accept the Preferred Securities as eligible for deposit at DTC, and to act in accordance with DTC's Rules with respect to the Preferred Securities, the Issuer and Wilmington Trust Company make the following representations to DTC: 1. Prior to the closing of the sale of the Preferred Securities to the Underwriters, which is expected to occur on or about _____ __, _____, there shall be deposited with DTC one or more global certificates (individually and collectively, the "Global Certificate") registered in the name of DTC's nominee, Cede & Co., representing an aggregate of up to ______ Preferred Securities and bearing the following legend: Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the B-1 Issuer 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. 2. The Amended and Restated Trust Agreement of Southwestern Public Service Capital I provides for the voting by holders of the Preferred Securities under certain limited circumstances. The Issuer shall establish a record date for such purposes and shall, to the extent possible, give DTC notice of such record date not less than 15 calendar days in advance of such record date. 3. In the event of a stock split, conversion, recapitalization, reorganization or any other similar transaction resulting in the cancellation of all or any part of the Preferred Securities outstanding, the Issuer or the Bank shall send DTC a notice of such event at least 5 business days prior to the effective date of such event. 4. In the event of distribution on, or an offering or issuance of rights with respect to, the Preferred Securities outstanding, the Issuer or the Bank shall send DTC a notice specifying: (a) the amount of and conditions, if any, applicable to the payment of any such distribution or any such offering or issuance of rights; (b) any applicable expiration or deadline date, or any date by which any action on the part of the holders of Preferred Securities is required; and (c) the date any required notice is to be mailed by or on behalf of the Issuer to holders of Preferred Securities or published by or on behalf of the Issuer (whether by mail or publication, the "Publication Date"). Such notice shall be sent to DTC by a secure means (e.g., legible telecopy, registered or certified mail, overnight delivery) in a timely manner designed to assure that such notice is in DTC's possession no later than the close of business on the business day before the Publication Date. The Issuer or the Bank will forward such notice either in a separate secure transmission for each CUSIP number or in a secure transmission for multiple CUSIP numbers (if applicable) that includes a manifest or list of each CUSIP number submitted in that transmission. (The party sending such notice shall have a method to verify subsequently the use of such means and the timeliness of such notice.) The Publication Date shall be not less than 30 calendar days nor more than 60 calendar days prior to the payment of any such distribution or any such offering or issuance of rights with respect to the Preferred Securities. After establishing the amount of payment to be made on the Preferred Securities, the Issuer or the Bank will notify DTC's Dividend Department of such payment 5 business days prior to payment date. Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709-1723. Such notices by mail or by any other means shall be sent to: Manager, Announcements Dividend Department The Depository Trust Company 7 Hanover Square, 23rd Floor New York, New York 10004-2695 The Issuer or the Bank shall confirm DTC's receipt of such telecopy by telephoning the Dividend Department at (212) 709-1270. 5. In the event of a redemption by the Issuer of the Preferred Securities, notice specifying the terms of the redemption and the Publication Date of such notice shall be sent by the Issuer or the Bank to DTC not less than 30 calendar days prior to such event by a secure means in the manner B-2 set forth in paragraph 4. Such redemption notice shall be sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or by any other means shall be sent to: Call Notification Department The Depository Trust Company 711 Stewart Avenue Garden City, New York 11530-4719 6. In the event of any invitation to tender the Preferred Securities, notice specifying the terms of the tender and the Publication Date of such notice shall be sent by the Issuer or the Bank to DTC by a secure means and in a timely manner as described in paragraph 4. Notices to DTC pursuant to this paragraph and notices of other corporate actions (including mandatory tenders, exchanges and capital changes), shall be sent, unless notification to another department is expressly provided for herein, by telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by mail or any other means to: Manager, Reorganization Department Reorganization Window The Depository Trust Company 7 Hanover Square, 23rd Floor New York, New York 10004-2695 7. All notices and payment advices sent to DTC shall contain the CUSIP number or numbers of the Preferred Securities and the accompanying designation of the Preferred Securities, which, as of the date of this letter, is "Southwestern Public Service Capital I % Trust Preferred Securities, Series ." 8. Distribution payments or other cash payments with respect to the Preferred Securities evidenced by the Global Certificate shall be governed by DTC's current Principal and Income Payments Rider, a copy of which is attached hereto as Annex I. For purposes of this letter, the term "Agent" used in Annex I shall be deemed to refer to the Bank. 9. DTC may direct the Issuer and the Bank to use any other telecopy number or address of DTC as the number or address to which notices or payments may be sent. 10. In the event of a conversion, redemption, or any other similar transaction (e.g., tender made and accepted in response to the Issuer's or the Bank's invitation) necessitating a reduction in the aggregate number of Preferred Securities outstanding evidenced by the Global Certificate, DTC, in its discretion: (a) may request the Issuer or the Bank to issue and countersign a new Global Certificate; or (b) may make an appropriate notation on the Global Certificate indicating the date and amount of such reduction. 11. DTC may discontinue its services as a securities depositary with respect to the Preferred Securities at any time by giving reasonable prior written notice to the Issuer and the Bank at which time DTC will confirm with the Issuer or the Bank the aggregate number of Preferred Securities deposited with it) and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Issuer may determine to make alternative arrangements for book-entry settlement for the Preferred Securities, make available one or more separate global certificates evidencing Preferred Securities to any Participant having Preferred Securities credited to its DTC account, or issue definitive Preferred Securities to the beneficial holders thereof, and in any such case, DTC agrees to cooperate fully B-3 with the Issuer and the Bank and to return the Global Certificate, duly endorsed for transfer as directed by the Issuer or the Bank, together with any other documents of transfer reasonably requested by the Issuer or the Bank. 12. In the event that the Issuer determines that beneficial owners of Preferred Securities shall be able to obtain definitive Preferred Securities, the Issuer or the Bank shall notify DTC of the availability of certificates. In such event, the Issuer or the Bank shall issue, transfer and exchange certificates in appropriate amounts, as required by DTC and others, and DTC agrees to cooperate fully with the Issuer and the Bank and to return the Global Certificate, duly endorsed for transfer as directed by the Issuer or the Bank, together with any other documents of transfer reasonably requested by the Issuer or the Bank. 13. This letter may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Nothing herein shall be deemed to require the Bank to advance funds on behalf of the Issuer. Very truly yours, SOUTHWESTERN PUBLIC SERVICE CAPITAL I (As Issuer) By: Southwestern Public Service Company, Depositor By: --------------------------------- Name: Title: WILMINGTON TRUST COMPANY Property Trustee By: --------------------------------- Name: Title: RECEIVED AND ACCEPTED: WILMINGTON TRUST COMPANY THE DEPOSITORY TRUST COMPANY By: --------------------------------- Name: Title: By: ________________________________ Authorized Officer B-4 EXHIBIT C PRINCIPAL AND INCOME PAYMENTS RIDER 1. This Rider supersedes any contradictory language set forth in the Letter of Representations to which it is appended. 2. With respect to principal and income payments in the Securities: A. DTC shall receive all dividend and interest payments on payable date in same- day funds by 2:30 p.m. ET (Eastern Time). B. Issuer agrees that it or Agent shall provide dividend and interest payment information to a standard announcement service subscribed to by DTC. In the unlikely event that no such service exists, Issuer agrees that it or Agent shall provide this information directly to DTC in advance of the dividend or interest record date as soon as the information is available. This information should be conveyed directly to DTC electronically. If electronic transmission is not possible, such information should be conveyed by telephone or facsimile transmission to: The Depository Trust Company Manager, Announcements Dividend Department 7 Hanover Square, 22nd Floor New York, NY 10004 Phone: (212) 709-1270 Fax: (212) 709-1723, 1686 C. Issuer agrees that for dividend and interest payments, it or Agent shall provide automated notification of CUSIP-level detail to the depository no later than noon ET on the payment date. D. DTC shall receive maturity and redemption payments and CUSIP-level detail on the payable date in same-day funds by 2:30 p.m. ET. Absent any other arrangements between Agent and DTC, such payments shall be wired according to the following instructions: C-1 Chemical Bank ABA 021000128 For credit to A/C Depository Trust Company Redemption Account 066-027306 in accordance with existing SDFS payment procedures in the manner set forth in DTC's SDFS Paying Agent Operating Procedures a copy of which has previously been furnished to Agent. E. DTC shall receive all other payments and CUSIP-level detail resulting from corporate actions (such as tender offers or mergers) on the first payable date in same-day funds by 2:30 p.m. ET. Absent any other arrangements between the Agent and DTC, such payments shall be wired to the following address: Chemical Bank ABA 021000128 For credit to A/C Depository Trust Company Reorganization Account 066-027608 C-2 EXHIBIT D REPRESENTATIONS FOR DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC") -- to be included in DTC Letter of Representations The Security certificate(s) shall remain in Agent's custody as a "Balance Certificate" subject to the provisions of the Balance Certificate Agreement between Agent and DTC currently in effect. On each day on which Agent is open for business and on which it receives an instruction originated by a Participant through DTC's Deposit/Withdrawal at Custodian ("DWAC") system to increase the Participant's account by a specified number of shares, units, or obligations (a "Deposit Instruction"), Agent shall, before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Deposit Instruction through the DWAC system. On each day on which Agent is open for business and on which it receives an instruction originated by a Participant through the DWAC system to decrease the Participant's account by a specified number of shares, units, or obligations (a "Withdrawal Instruction"), Agent shall, before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Withdrawal Instruction through the DWAC system. Agent agrees that its approval of a Deposit or Withdrawal Instruction shall be deemed to be the receipt by DTC of a new, reissued or reregistered certificated security on registration of transfer to the name of Cede & Co. for the quantity of Securities evidenced by the Balance Certificate after the Deposit or Withdrawal Instruction is effected. D-1 EXHIBIT E THIS CERTIFICATE IS NOT TRANSFERABLE Certificate Number Number of Common Securities C-1 CERTIFICATE EVIDENCING COMMON SECURITIES OF SOUTHWESTERN PUBLIC SERVICE CAPITAL I Common Securities, Series A (liquidation amount U.S. $25 per Common Security) Southwestern Public Service Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Southwestern Public Service Company (the "Holder") is the registered owner of common securities of the Trust representing beneficial interests in the Trust and designated the Common Securities (liquidation amount U.S. $25 per Common Security) (the "Common Securities"). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of , 199 , as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate this ___ day of ______,_____. Southwestern Public Service Capital I By: -------------------------------------- Administrative Trustee E-1 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ---------------------------- Signature: -------------------------------------- (Sign exactly as your name appears on the other side of this Common Security Certificate) EXHIBIT F AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT dated as , 199 between Southwestern Public Service Company, a New Mexico corporation ("SPS"), and Southwestern Public Service Capital I, a Delaware business trust (the "Trust"). WHEREAS, the Trust intends to issue its Common Securities (the "Common Securities") to and receive Debentures from SPS and to issue and sell Southwestern Public Service Capital I, % Trust Preferred Securities, Series (the "Preferred Securities") with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of , 199 as the same may be amended from time to time (the "Trust Agreement"); WHEREAS, SPS is the issuer of the Debentures; NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred Securities, which purchase SPS hereby agrees shall benefit SPS and which purchase SPS acknowledges will be made in reliance upon the execution and delivery of this Agreement, SPS and the Trust hereby agree as follows: ARTICLE I Section 1.01. Guarantee by SPS. Subject to the terms and conditions hereof, SPS hereby irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Creditors") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Creditors. As used herein, "Obligations" means any indebtedness, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Creditors, whether or not such Creditors have received notice hereof. Section 1.02. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the date on which there are no Creditors remaining; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any Creditor must restore payment of any sums paid under any Obligation for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. Section 1.03. Waiver of Notice. SPS hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and SPS hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 1.04. No Impairment. The obligations, covenants, agreements and duties of SPS under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: F-1 (a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Creditors to enforce, assert or exercise any right, privilege, power or remedy conferred on the Creditors with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt or, or other similar proceedings affecting, the Trust or any of the assets of the Trust. There shall be no obligation of the Creditors to give notice to, or obtain the consent of, SPS with respect to the happening of any of the foregoing. Section 1.05. Enforcement. A Creditor may enforce this Agreement directly against SPS and SPS waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against SPS. ARTICLE II Section 2.01. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of SPS and shall inure to the benefit of the Creditors. Section 2.02. Amendment. So long as there remains any Creditor or any Preferred Securities of any series are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Creditor or to the holders of the Preferred Securities. Section 2.03. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex), to wit: Southwestern Public Service Capital I Wilmington Trust Company Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890 F-2 and copies to: Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Facsimile No.: (806) 378-2995 Attention: Secretary (with a copy sent to the same address marked to the attention of the the Administrative Trustees) Facsimile No.: (806) 378-2995 Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF THIS AGREEMENT is executed as of the day and year first above written. SOUTHWESTERN PUBLIC SERVICE COMPANY By: --------------------------------- Name: Title: SOUTHWESTERN PUBLIC SERVICE CAPITAL I By: --------------------------------- Administrative Trustee F-3 EXHIBIT G This Preferred Security is a Global Certificate within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Preferred Security is exchangeable for Preferred Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Trust Agreement and no transfer of this Preferred Security (other than a transfer of this Preferred Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Preferred Security is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York City) to Southwestern Public Service Capital I or its agent for registration of transfer, exchange or payment, and any Preferred Security issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. Certificate Number Number of Preferred Securities P- CUSIP NO. CERTIFICATE EVIDENCING PREFERRED SECURITIES OF SOUTHWESTERN PUBLIC SERVICE CAPITAL I % Trust Preferred Securities, Series (liquidation amount U.S. $25 per Preferred Security) Southwestern Public Service Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of preferred securities of the Trust representing a beneficial ownership interest in the Trust and designated the Southwestern Public Service Capital I % Trust Preferred Securities, Series (liquidation amount U.S. $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.04 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of , 199 , as the same may be amended from time to time (the "Trust Agreement") including the designation of the terms of Preferred Securities as set forth therein. The holder of this certificate is entitled to the benefits of the Guarantee Agreement entered into by Southwestern Public Service Company, a New Mexico corporation, and Wilmington G-1 Trust Company, as guarantee trustee, dated as of _____ __,______ (the "Guarantee") to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the holder of this certificate without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the holder of this certificate is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate this ___ day of _______,______. Southwestern Public Service Capital I By: ------------------------------------ Administrative Trustee G-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ------------------------------ Signature: -------------------------------- (Sign exactly as your name appears on the other side of this Preferred Security Certificate) EX-5.A 7 OPINION OF HINCKLE, COX, EATON Exhibit 5(a) August 12, 1996 Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Dear Sirs: We refer to the proposed issuance and sale, from time to time, of __% Deferrable Interest Subordinated Debentures (the "Debentures") of Southwestern Public Service Company (the "Company") and the contractual arrangements to be entered into by the Company (the "Surety Obligations") with respect to pre- ferred securities (the "Preferred Securities") issued from time to time by Southwestern Public Service Capital I (the "Trust") to which a series of Debentures will be issued, for which the Company and the Trust are filing a Registration Statement on Form S-3 with the Securities and Exchange Commission under the Securities Act of 1933 (the "Securities Act"). The Surety Obligations are (i) the guarantee (the "Guarantee") by the Com- pany for the benefit of the holders of Preferred Securities and (ii) an expenses and liabilities agreement (the "Expense Agree- ment") between the Company and the Trust. We advise you that in our opinion: 1. the Company is a corporation duly organized and existing under the laws of New Mexico; 2. as to the proposed issuance and sale of Deben- tures under an indenture between the Company and the trustee thereunder (the "Indenture") to be further supplemented by a supplemental indenture creating such series of Debentures (the "Supplemental Indenture"), forms of which are filed as exhibits to the Registration Statement, upon (a) the Registration State- ment becoming effective under the Securities Act; (b) the adop- tion of resolutions by the Board of Directors of the Company authorizing the execution of the Indenture and the Supplemental Indenture and the issuance, sale and delivery of the Deben- tures; (c) the due execution of the Indenture and the Supple- mental Indenture by the Company and the trustee thereunder, acting by their proper officers, respectively, and the delivery thereof; and (d) the execution of the Debentures by the proper officers of the Company and the authentication thereof by the trustee in accordance with the provisions of the Indenture and the Supplemental Indenture and the full payment therefor, in accordance with authorizations of the Board of Directors of the -2- Company and the New Mexico Public Utility Commission, the Indenture and each Supplemental Indenture will be a valid instrument legally binding upon the Company and the Debentures will be duly authorized and issued and will constitute the legal, valid and binding obligations of the Company subject, as to enforcement to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other similar laws now or hereafter in effect relating to creditors' rights generally; 3. as to the Surety Obligations, forms of which are filed as exhibits to the Registration Statement, upon (a) the Registration Statement becoming effective under the Securities Act; (b) the adoption of resolutions by the Board of Directors of the Company authorizing the Surety Obligations and the delivery of the Surety Obligation; (c) the due execution of the (i) Guarantee by the Company and the trustee thereunder and (ii) Expense Agreement by the Company and the Trust, acting by their proper officers, respectively, and the delivery thereof in accordance with authorizations of the Board of Directors of the Company and the New Mexico Public Utility Commission, each of the Surety Obligations will be a valid instrument legally binding upon the Company and will be duly authorized and issued and will constitute the legal, valid and binding obligations of the Company subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other similar laws now or hereafter in effect relating to creditors' rights generally; 4. the statements as to matters of law and legal conclusions in the Registration Statement made in reliance upon us as experts are correct. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading "Experts" included in the prospectus forming a part of the Registration Statement. Very truly yours, /s/ HINKLE, COX, EATON, COFFIELD & HENSLEY, L.L.P. EX-5.B 8 OPINION OF RICHARDS, LAYTON & FINGER [Letterhead of Richards, Layton & Finger] August 7, 1996 Southwestern Public Service Capital I c/o Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Re: Southwestern Public Service Capital I ------------------------------------- Ladies and Gentlemen: We have acted as special Delaware counsel for Southwestern Public Service Company, a New Mexico corporation ("Southwestern"), and Southwestern Public Service Capital I, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated as of June 5, 1996 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on June 5, 1996; (b) The Trust Agreement of the Trust, dated as of June 5, 1996, between David M. Wilks, as initial depositor, and the trustees of the Trust named therein; (c) The registration statement (the "Initial Registration Statement") on Form S-3 (Registration No. 333-05289), filed by Southwestern and the Trust with the Securities and Exchange Commission ("SEC") on June 5, 1996, as amended by Southwestern Public Service Capital I August 7, 1996 Page 2 Amendment No. 1 to the Initial Registration Statement, including a related preliminary prospectus, as supplemented by a preliminary prospectus supplement (as supplemented, the "Prospectus"), relating to the __% Cumulative Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities"), as proposed to be filed by Southwestern and the Trust with the SEC on or about August 7, 1996 ("Amendment No. 1") (the Initial Registration Statement, as amended by Amendment No. 1, is hereinafter referred to as the "Registration Statement"); (d) A form of Amended and Restated Trust Agreement of the Trust, among Southwestern, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust, attached to the Prospectus as Exhibit "A" (the "Trust Agreement"); and (e) A Certificate of Good Standing for the Trust, dated August 7, 1996, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed above, and we have assumed that there exists no provision in any document that we have not reviewed that bears upon or is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the creation, operation and termination of the Trust, and that the Trust Agreement and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation or due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under Southwestern Public Service Capital I August 7, 1996 Page 3 the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the "Preferred Security Holders") of a Preferred Security Certificate for such Preferred Security and the payment for the Preferred Security acquired by it, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Securities are issued and sold to the Preferred Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act, 12 Del. C. ss. 3801, et seq. 2. The Preferred Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Trust Agreement. Southwestern Public Service Capital I August 7, 1996 Page 4 We understand that Cahill Gordon & Reindel ("Cahill") will rely as to matters of Delaware law upon this opinion in connection with an opinion to be rendered by it on the date hereof relating to the Trust. In connection with the foregoing, we hereby consent to Cahill's relying as to matters of Delaware law upon this opinion. Furthermore, we consent to the filing of this opinion with the SEC as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Legal Matters" in the Prospectus. In giving the foregoing consents, we do not thereby admit that we come within the category of Persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the SEC thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other Person for any purpose. Very truly yours, /s/ RICHARDS, LAYTON & FINGER EX-8 9 OPINION OF CAHILL GORDON & REINDEL Exhibit 8 [LETTERHEAD OF CAHILL GORDON & REINDEL] August 12, 1996 Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Gentlemen: We have acted as counsel to Southwestern Public Service Company ("SPS") in connection with the proposed offering by Southwestern Public Service Capital I (the "Trust") of its Cumulative Preferred Securities (the "Preferred Securities") as described in that certain Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission on June 5, 1996. We consent to the filing of this opinion as an Exhibit to the Registration Statement, and to the reference to this firm under the heading "UNITED STATES TAXATION" in the Prospectus Supplement and under the headings "LEGAL OPINIONS" and "EXPERTS" in the Prospectus, each forming a part of the Registration Statement. All capitalized terms not defined herein shall have the meanings ascribed to them in the Registration Statement. In rendering the opinions expressed herein, we have examined such documents as we have deemed appropriate, including (but not limited to) the Registration Statement and all Exhibits thereto. In our examination of documents, we have assumed, with your consent, that all documents submitted to us are authentic originals or, if submitted as photocopies, that they faithfully reproduce the originals thereof, that all such documents have been or will be duly executed to the extent required, that all representations and statements set forth in such documents are true and correct, and that all obligations imposed by any such documents on the parties thereto are enforceable, and have been or will be performed or satisfied in accordance with their terms. In addition, we have relied, with your consent, upon (i) the opinion of Hinkle, Cox, Eaton, Coffield & Hensley with respect to the validity of the Guarantee Agreement and the Junior Subordinated Debentures to be issued by SPS to the Trust and (ii) the opinion of Richards, Layton & Finger with respect to the validity of the Preferred Securities. -2- Based upon and subject to the foregoing, we are of the following opinions. (1) The Trust will be treated as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. (2) The discussion contained in the Registration Statement under the heading "UNITED STATES TAXATION", insofar as it relates to matters of law and legal conclusions, is correct in all material respects. The opinions expressed herein are based upon the United States Internal Revenue Code, the United States Treasury Regulations promulgated thereunder, current administrative positions of the United States Internal Revenue Service, and existing judicial decisions, any of which could be changed at any time, possibly on a retroactive basis. Any such changes could adversely affect the opinions rendered herein and the tax consequences to the Trust and to the holders of the Preferred Securities. In addition, our opinions cannot be relied upon if any of the facts contained in the documents that we have examined, including the opinions of Hinkle, Cox, Eaton, Coffield & Hensley and Richards, Layton & Finger, or if any of the assumptions that we have made, is, or later becomes, inaccurate. Finally, our opinion is limited to the tax matters specifically covered thereby, and we have not been asked to address, nor have we addressed, any other tax consequences relating to the formation or operation of the Trust or of an investment in the Preferred Securities. Sincerely yours, /s/ CAHILL GORDON & REINDEL EX-15 10 LETTER RE UNAUDITED FINANCIAL STATEMENT Exhibit 15 Southwestern Public Service Company: We have reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, the unaudited condensed consolidated interim finanical information of Southwestern Public Service Company for the periods ended November 30, 1995 and 1994, February 29, 1996, February 28, 1995, and May 31, 1996 and 1995, as indicated in our reports dated January 12, 1996, April 12, 1996, and July 12, 1996, respectively; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which were included in your Quarterly Reports on Form 10-Q for the quar- ters ended November 30, 1995, February 29, 1996, and May 31, 1996, are being used in this Registration Statement. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not consid- ered a part of the Registration Statement prepared or certified by an accountant or reports prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ DELOITTE & TOUCHE LLP Dallas, Texas August 9, 1996 EX-23.D 11 CONSENT LETTER OF FOULSTON AND SIEFKIN L.L.P Exhibit 23(d) [LETTERHEAD OF FOULSTON & SIEFKIN L.L.P.] August 12, 1996 Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Dear Sirs: In connection with the Registration Statement on Form S-3 relating to the Deferrable Interest Subordinated Debentures of Southwestern Public Service Company (the "Company") and the Surety Obligations of the Company with respect to preferred securities of Southwestern Public Service Capital I (the "Trust") and the Preferred Securities of the Trust, we hereby consent to the reference to our firm in the prospectus filed as part of the registration statement and the documents incorpo- rated by reference therein. Very truly yours, FOULSTON & SIEFKIN /s/ James L. Grimes, Jr. EX-23.E 12 CONSENT OF RAINEY, ROSS, RICE AND BINNS Exhibit 23(e) [LETTERHEAD OF RAINEY, ROSS, RICE & BINNS] August 8, 1996 Southwestern Public Service Company Tyler at Sixth Amarillo, Texas 79101 Dear Sirs: In connection with the Registration Statement on Form S-3 relating to the Deferrable Interest Subordinated Debentures of Southwestern Public Service Company (the "Company") and the Surety Obligations of the Company with respect to preferred securities of Southwestern Public Service Capital I (the "Trust") and the Preferred Securities of the Trust, we hereby consent to the reference to our firm in the prospectus filed as part of the registration statement and the documents incorpo- rated by reference therein. Very truly yours, RAINEY, ROSS, RICE & BINNS /s/ Hugh D. Rice EX-25.A 13 STATEMENT OF ELIGIBILITY OF DEBENTURE TRUSTEE ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) X --- WILMINGTON TRUST COMPANY (Exact name of trustee as specified in its charter) Delaware 51-0055023 (State of incorporation) (I.R.S. employer identification no.) Rodney Square North Wilmington, Delaware 19890 (Address of principal executive offices) Myfanwy Phillips Bonilla Asst. Vice President and Trust Counsel Wilmington Trust Company Rodney Square North Wilmington, Delaware 19890 (302) 651-8914 (Name, address and telephone number of agent for service) Southwestern Public Service Company (Exact name of obligor as specified in its Trust Agreements) New Mexico 75-0575400 (State of organization) (I.R.S. employer identification no.) Tyler at Sixth Amarillo, Texas 79101 (Address of principal executive offices) (Zip Code) Southwestern Public Service Company Deferrable Interest Subordinated Debentures (Title of the indenture securities) ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Deposit Insurance Co. State Bank Commissioner Five Penn Center Dover, Delaware Suite #2901 Philadelphia, PA (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each affiliation: Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee. ITEM 3. LIST OF EXHIBITS. List below all exhibits filed as part of this Statement of Eligibility and Qualification. A. Copy of the Charter of Wilmington Trust Company, which includes the certificate of authority of Wilmington Trust Company to commence business and the authorization of Wilmington Trust Company to exercise corporate trust powers. B. Copy of By-Laws of Wilmington Trust Company. C. Consent of Wilmington Trust Company required by Section 321(b) of Trust Indenture Act. D. Copy of most recent Report of Condition of Wilmington Trust Company. Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Wilmington Trust Company, a corporation organized and existing under the laws of Delaware, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Wilmington and State of Delaware on the 12th day of August, 1996. WILMINGTON TRUST COMPANY [SEAL] Attest:/s/ Cynthia L. Corliss By:/s/ Emmet R. Harmon ----------------------- ------------------------ Assistant Secretary Name: Emmet R. Harmon Title: Vice President 2 EXHIBIT A AMENDED CHARTER WILMINGTON TRUST COMPANY WILMINGTON, DELAWARE AS EXISTING ON MAY 9, 1987 AMENDED CHARTER OR ACT OF INCORPORATION OF WILMINGTON TRUST COMPANY WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act of Incorporation of which company has been from time to time amended and changed by merger agreements pursuant to the corporation law for state banks and trust companies of the State of Delaware, does hereby alter and amend its Charter or Act of Incorporation so that the same as so altered and amended shall in its entirety read as follows: FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY. SECOND: - The location of its principal office in the State of Delaware is at Rodney Square North, in the City of Wilmington, County of New Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose address is Rodney Square North, in said City. In addition to such principal office, the said corporation maintains and operates branch offices in the City of Newark, New Castle County, Delaware, the Town of Newport, New Castle County, Delaware, at Claymont, New Castle County, Delaware, at Greenville, New Castle County Delaware, and at Milford Cross Roads, New Castle County, Delaware, and shall be empowered to open, maintain and operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in the City of Wilmington, New Castle County, Delaware, and such other branch offices or places of business as may be authorized from time to time by the agency or agencies of the government of the State of Delaware empowered to confer such authority. THIRD: - (a) The nature of the business and the objects and purposes proposed to be transacted, promoted or carried on by this Corporation are to do any or all of the things herein mentioned as fully and to the same extent as natural persons might or could do and in any part of the world, viz.: (1) To sue and be sued, complain and defend in any Court of law or equity and to make and use a common seal, and alter the seal at pleasure, to hold, purchase, convey, mortgage or otherwise deal in real and personal estate and property, and to appoint such officers and agents as the business of the Corporation shall require, to make by-laws not inconsistent with the Constitution or laws of the United States or of this State, to discount bills, notes or other evidences of debt, to receive deposits of money, or securities for money, to buy gold and silver bullion and foreign coins, to buy and sell bills of exchange, and generally to use, exercise and enjoy all the powers, rights, privileges and franchises incident to a corporation which are proper or necessary for the transaction of the business of the Corporation hereby created. (2) To insure titles to real and personal property, or any estate or interests therein, and to guarantee the holder of such property, real or personal, against any claim or claims, adverse to his interest therein, and to prepare and give certificates of title for any lands or premises in the State of Delaware, or elsewhere. (3) To act as factor, agent, broker or attorney in the receipt, collection, custody, investment and management of funds, and the purchase, sale, management and disposal of property of all descriptions, and to prepare and execute all papers which may be necessary or proper in such business. (4) To prepare and draw agreements, contracts, deeds, leases, conveyances, mortgages, bonds and legal papers of every description, and to carry on the business of conveyancing in all its branches. (5) To receive upon deposit for safekeeping money, jewelry, plate, deeds, bonds and any and all other personal property of every sort and kind, from executors, administrators, guardians, public officers, courts, receivers, assignees, trustees, and from all fiduciaries, and from all other persons and individuals, and from all corporations whether state, municipal, corporate or private, and to rent boxes, safes, vaults and other receptacles for such property. (6) To act as agent or otherwise for the purpose of registering, issuing, certificating, countersigning, transferring or underwriting the stock, bonds or other obligations of any corporation, association, state or municipality, and may receive and manage any sinking fund therefor on such terms as may be agreed upon between the two parties, and in like manner may act as Treasurer of any corporation or municipality. (7) To act as Trustee under any deed of trust, mortgage, bond or other instrument issued by any state, municipality, body politic, corporation, association or person, either alone or in conjunction with any other person or persons, corporation or corporations. (8) To guarantee the validity, performance or effect of any contract or 2 agreement, and the fidelity of persons holding places of responsibility or trust; to become surety for any person, or persons, for the faithful performance of any trust, office, duty, contract or agreement, either by itself or in conjunction with any other person, or persons, corporation, or corporations, or in like manner become surety upon any bond, recognizance, obligation, judgment, suit, order, or decree to be entered in any court of record within the State of Delaware or elsewhere, or which may now or hereafter be required by any law, judge, officer or court in the State of Delaware or elsewhere. (9) To act by any and every method of appointment as trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity in the receiving, holding, managing, and disposing of any and all estates and property, real, personal or mixed, and to be appointed as such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian or bailee by any persons, corporations, court, officer, or authority, in the State of Delaware or elsewhere; and whenever this Corporation is so appointed by any person, corporation, court, officer or authority such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity, it shall not be required to give bond with surety, but its capital stock shall be taken and held as security for the performance of the duties devolving upon it by such appointment. (10) And for its care, management and trouble, and the exercise of any of its powers hereby given, or for the performance of any of the duties which it may undertake or be called upon to perform, or for the assumption of any responsibility the said Corporation may be entitled to receive a proper compensation. (11) To purchase, receive, hold and own bonds, mortgages, debentures, shares of capital stock, and other securities, obligations, contracts and evidences of indebtedness, of any private, public or municipal corporation within and without the State of Delaware, or of the Government of the United States, or of any state, territory, colony, or possession thereof, or of any foreign government or country; to receive, collect, receipt for, and dispose of interest, dividends and income upon and from any of the bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property held and owned by it, and to exercise in respect of all such bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property, any and all the rights, powers and privileges of individual owners thereof, including the right to vote thereon; to invest and deal in and with any of the moneys of the Corporation upon such securities and in such manner as it may think fit and proper, and from time to time to vary or 3 realize such investments; to issue bonds and secure the same by pledges or deeds of trust or mortgages of or upon the whole or any part of the property held or owned by the Corporation, and to sell and pledge such bonds, as and when the Board of Directors shall determine, and in the promotion of its said corporate business of investment and to the extent authorized by law, to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey real and personal property of any name and nature and any estate or interest therein. (b) In furtherance of, and not in limitation, of the powers conferred by the laws of the State of Delaware, it is hereby expressly provided that the said Corporation shall also have the following powers: (1) To do any or all of the things herein set forth, to the same extent as natural persons might or could do, and in any part of the world. (2) To acquire the good will, rights, property and franchises and to undertake the whole or any part of the assets and liabilities of any person, firm, association or corporation, and to pay for the same in cash, stock of this Corporation, bonds or otherwise; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business. (3) To take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell, exchange, transfer, or in any manner whatever dispose of property, real, personal or mixed, wherever situated. (4) To enter into, make, perform and carry out contracts of every kind with any person, firm, association or corporation, and, without limit as to amount, to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or transferable instruments. (5) To have one or more offices, to carry on all or any of its operations and businesses, without restriction to the same extent as natural persons might or could do, to purchase or otherwise acquire, to hold, own, to mortgage, sell, convey or otherwise dispose of, real and personal property, of every class and description, in any State, District, Territory or Colony of the United States, and in any foreign country or place. (6) It is the intention that the objects, purposes and powers specified and clauses contained in this paragraph shall (except where otherwise expressed in said paragraph) be nowise limited or restricted by reference to or inference 4 from the terms of any other clause of this or any other paragraph in this charter, but that the objects, purposes and powers specified in each of the clauses of this paragraph shall be regarded as independent objects, purposes and powers. FOURTH: - (a) The total number of shares of all classes of stock which the Corporation shall have authority to issue is forty-one million (41,000,000) shares, consisting of: (1) One million (1,000,000) shares of Preferred stock, par value $10.00 per share (hereinafter referred to as "Preferred Stock"); and (2) Forty million (40,000,000) shares of Common Stock, par value $1.00 per share (hereinafter referred to as "Common Stock"). (b) Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends, if any, thereon shall be cumulative, if made cumulative. The voting powers and the preferences and relative, participating, optional and other special rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding; and, subject to the provisions of subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of Directors of the Corporation is hereby expressly granted authority to fix by resolution or resolutions adopted prior to the issuance of any shares of a particular series of Preferred Stock, the voting powers and the designations, preferences and relative, optional and other special rights, and the qualifications, limitations and restrictions of such series, including, but without limiting the generality of the foregoing, the following: (1) The distinctive designation of, and the number of shares of Preferred Stock which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors; (2) The rate and times at which, and the terms and conditions on which, dividends, if any, on Preferred Stock of such series shall be paid, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes, or series of the same or other class of stock and whether such dividends shall be cumulative or non-cumulative; (3) The right, if any, of the holders of Preferred Stock of such series to 5 convert the same into or exchange the same for, shares of any other class or classes or of any series of the same or any other class or classes of stock of the Corporation and the terms and conditions of such conversion or exchange; (4) Whether or not Preferred Stock of such series shall be subject to redemption, and the redemption price or prices and the time or times at which, and the terms and conditions on which, Preferred Stock of such series may be redeemed. (5) The rights, if any, of the holders of Preferred Stock of such series upon the voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding-up, of the Corporation. (6) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock of such series; and (7) The voting powers, if any, of the holders of such series of Preferred Stock which may, without limiting the generality of the foregoing include the right, voting as a series or by itself or together with other series of Preferred Stock or all series of Preferred Stock as a class, to elect one or more directors of the Corporation if there shall have been a default in the payment of dividends on any one or more series of Preferred Stock or under such circumstances and on such conditions as the Board of Directors may determine. (c) (1) After the requirements with respect to preferential dividends on the Preferred Stock (fixed in accordance with the provisions of section (b) of this Article FOURTH), if any, shall have been met and after the Corporation shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of section (b) of this Article FOURTH), and subject further to any conditions which may be fixed in accordance with the provisions of section (b) of this Article FOURTH, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors. (2) After distribution in full of the preferential amount, if any, (fixed in accordance with the provisions of section (b) of this Article FOURTH), to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up, of the Corporation, the holders of the Common Stock shall be entitled to receive all of the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them 6 respectively. (3) Except as may otherwise be required by law or by the provisions of such resolution or resolutions as may be adopted by the Board of Directors pursuant to section (b) of this Article FOURTH, each holder of Common Stock shall have one vote in respect of each share of Common Stock held on all matters voted upon by the stockholders. (d) No holder of any of the shares of any class or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued stock of any class or series or any additional shares of any class or series to be issued by reason of any increase of the authorized capital stock of the Corporation of any class or series, or bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for stock of the Corporation of any class or series, or carrying any right to purchase stock of any class or series, but any such unissued stock, additional authorized issue of shares of any class or series of stock or securities convertible into or exchangeable for stock, or carrying any right to purchase stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, corporations or associations, whether such holders or others, and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its sole discretion. (e) The relative powers, preferences and rights of each series of Preferred Stock in relation to the relative powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in section (b) of this Article FOURTH and the consent, by class or series vote or otherwise, of the holders of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether or not the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in the resolution or resolutions as to any series of Preferred Stock adopted pursuant to section (b) of this Article FOURTH that the consent of the holders of a majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock. (f) Subject to the provisions of section (e), shares of any series of Preferred Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the 7 Board of Directors. (g) Shares of Common Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors. (h) The authorized amount of shares of Common Stock and of Preferred Stock may, without a class or series vote, be increased or decreased from time to time by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon. FIFTH: - (a) The business and affairs of the Corporation shall be conducted and managed by a Board of Directors. The number of directors constituting the entire Board shall be not less than five nor more than twenty-five as fixed from time to time by vote of a majority of the whole Board, provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the whole Board shall be twenty-four until otherwise fixed by a majority of the whole Board. (b) The Board of Directors shall be divided into three classes, as nearly equal in number as the then total number of directors constituting the whole Board permits, with the term of office of one class expiring each year. At the annual meeting of stockholders in 1982, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next annual election of directors. At such election, the stockholders shall elect a successor to such director to hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. (c) Notwithstanding any other provisions of this Charter or Act of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, this Charter or Act of Incorporation or the ByLaws of the Corporation), any director or the entire Board of Directors of the Corporation may be removed at any time without cause, but only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the stockholders called for that 8 purpose. (d) Nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors. Such nominations shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the Corporation not less than 14 days nor more than 50 days prior to any meeting of the stockholders called for the election of directors; provided, however, that if less than 21 days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the seventh day following the day on which notice of the meeting was mailed to stockholders. Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman on behalf of the Board. (e) Each notice under subsection (d) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of such nominee and (iii) the number of shares of stock of the Corporation which are beneficially owned by each such nominee. (f) The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. (g) No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. SIXTH: - The Directors shall choose such officers, agent and servants as may be provided in the By-Laws as they may from time to time find necessary or proper. SEVENTH: - The Corporation hereby created is hereby given the same powers, rights and privileges as may be conferred upon corporations organized under the Act entitled "An Act Providing a General Corporation Law", approved March 10, 1899, as from time to time amended. EIGHTH: - This Act shall be deemed and taken to be a private Act. NINTH: - This Corporation is to have perpetual existence. TENTH: - The Board of Directors, by resolution passed by a majority of the whole Board, may designate any of their number to constitute an Executive Committee, 9 which Committee, to the extent provided in said resolution, or in the By-Laws of the Company, shall have and may exercise all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. ELEVENTH: - The private property of the stockholders shall not be liable for the payment of corporate debts to any extent whatever. TWELFTH: - The Corporation may transact business in any part of the world. THIRTEENTH: - The Board of Directors of the Corporation is expressly authorized to make, alter or repeal the By-Laws of the Corporation by a vote of the majority of the entire Board. The stockholders may make, alter or repeal any By-Law whether or not adopted by them, provided however, that any such additional By-Laws, alterations or repeal may be adopted only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class). FOURTEENTH: - Meetings of the Directors may be held outside of the State of Delaware at such places as may be from time to time designated by the Board, and the Directors may keep the books of the Company outside of the State of Delaware at such places as may be from time to time designated by them. FIFTEENTH: - (a) In addition to any affirmative vote required by law, and except as otherwise expressly provided in sections (b) and (c) of this Article FIFTEENTH: (A) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with or into (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder), which, after such merger or consolidation, would be an Affiliate (as hereinafter defined) of an Interested Stockholder, or (B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate fair market value of $1,000,000 or more, or (C) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of related transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other 10 property (or a combination thereof) having an aggregate fair market value of $1,000,000 or more, or (D) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation, or (E) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder, or any Affiliate of any Interested Stockholder, shall require the affirmative vote of the holders of at least two-thirds of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purpose of this Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise. (2) The term "business combination" as used in this Article FIFTEENTH shall mean any transaction which is referred to any one or more of clauses (A) through (E) of paragraph 1 of the section (a). (b) The provisions of section (a) of this Article FIFTEENTH shall not be applicable to any particular business combination and such business combination shall require only such affirmative vote as is required by law and any other provisions of the Charter or Act of Incorporation of By-Laws if such business combination has been approved by a majority of the whole Board. (c) For the purposes of this Article FIFTEENTH: (1) A "person" shall mean any individual firm, corporation or other entity. (2) "Interested Stockholder" shall mean, in respect of any business combination, any person (other than the Corporation or any Subsidiary) who or which as of the record date for the determination of stockholders entitled to notice of and to vote on such business combination, or immediately prior to the consummation of any such transaction: (A) is the beneficial owner, directly or indirectly, of more than 10% of the 11 Voting Shares, or (B) is an Affiliate of the Corporation and at any time within two years prior thereto was the beneficial owner, directly or indirectly, of not less than 10% of the then outstanding voting Shares, or (C) is an assignee of or has otherwise succeeded in any share of capital stock of the Corporation which were at any time within two years prior thereto beneficially owned by any Interested Stockholder, and such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (3) A person shall be the "beneficial owner" of any Voting Shares: (A) which such person or any of its Affiliates and Associates (as hereafter defined) beneficially own, directly or indirectly, or (B) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding, or (C) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation. (4) The outstanding Voting Shares shall include shares deemed owned through application of paragraph (3) above but shall not include any other Voting Shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options or otherwise. (5) "Affiliate" and "Associate" shall have the respective meanings given those terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on December 31, 1981. (6) "Subsidiary" shall mean any corporation of which a majority of any class of equity security (as defined in Rule 3a11-1 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect in December 31, 1981) is owned, directly or indirectly, by the Corporation; provided, however, that for the 12 purposes of the definition of Investment Stockholder set forth in paragraph (2) of this section (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. (d) majority of the directors shall have the power and duty to determine for the purposes of this Article FIFTEENTH on the basis of information known to them, (1) the number of Voting Shares beneficially owned by any person (2) whether a person is an Affiliate or Associate of another, (3) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in paragraph (3) of section (c), or (4) whether the assets subject to any business combination or the consideration received for the issuance or transfer of securities by the Corporation, or any Subsidiary has an aggregate fair market value of $1,00,000 or more. (e) Nothing contained in this Article FIFTEENTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. SIXTEENTH: Notwithstanding any other provision of this Charter or Act of Incorporation or the By-Laws of the Corporation (and in addition to any other vote that may be required by law, this Charter or Act of Incorporation by the By-Laws), the affirmative vote of the holders of at least two-thirds of the outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter or Act of Incorporation. SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Laws as the same exists or may hereafter be amended. (b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a Director of the Corporation existing hereunder with respect to any act or omission occurring prior to the time of such repeal or modification." 13 EXHIBIT B BY-LAWS WILMINGTON TRUST COMPANY WILMINGTON, DELAWARE AS EXISTING ON FEBRUARY 21, 1991 BY-LAWS OF WILMINGTON TRUST COMPANY ARTICLE I STOCKHOLDERS' MEETINGS Section 1. The Annual Meeting of Stockholders shall be held on the third Thursday in April each year at the principal office at the Company or at such other date, time, or place as may be designated by resolution by the Board of Directors. Section 2. Special meetings of all stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President. Section 3. Notice of all meetings of the stockholders shall be given by mailing to each stockholder at least ten (10 days before said meeting, at his last known address, a written or printed notice fixing the time and place of such meeting. Section 4. A majority in the amount of the capital stock of the Company issued and outstanding on the record date, as herein determined, shall constitute a quorum at all meetings of stockholders for the transaction of any business, but the holders of a small number of shares may adjourn, from time to time, without further notice, until a quorum is secured. At each annual or special meeting of stockholders, each stockholder shall be entitled to one vote, either in person or by proxy, for each shares of stock registered in the stockholder's name on the books of the Company on the record date for any such meeting as determined herein. ARTICLE II DIRECTORS Section 1. The number and classification of the Board of Directors shall be as set forth in the Charter of the Bank. Section 2. No person who has attained the age of seventy-two (72) years shall be nominated for election to the Board of Directors of the Company, provided, however, that this limitation shall not apply to any person who was serving as director of the Company on September 16, 1971. Section 3. The class of Directors so elected shall hold office for three years or until their successors are elected and qualified. Section 4. The affairs and business of the Company shall be managed and conducted by the Board of Directors. Section 5. Regular meetings of the Board of Directors shall be held on the third Thursday of each month at the principal office of the Company, or at such other place and time as may be designated by the Board of Directors, the Chairman of the Board, or the President. Section 6. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors or by the President, and shall be called upon the written request of a majority of the directors. Section 7. A majority of the directors elected and qualified shall be necessary to constitute a quorum for the transaction of business at any meeting of the Board of Directors. Section 8. Written notice shall be sent by mail to each director of any special meeting of the Board of Directors, and of any change in the time or place of any regular meeting, stating the time and place of such meeting, which shall be mailed not less than two days before the time of holding such meeting. Section 9. In the event of the death, resignation, removal, inability to act, or disqualification of any director, the Board of Directors, although less than a quorum, shall have the right to elect the successor who shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director's successor shall have been duly elected and qualified. Section 10. The Board of Directors at its first meeting after its election by the stockholders shall appoint an Executive Committee, a Trust Committee, an Audit Committee and a Compensation Committee, and shall elect from its own members a Chairman of the Board of Directors and a President who may be the same person. The Board of Directors shall also elect at such meeting a Secretary and a Treasurer, who may be the same person, may appoint at any time such other committees and elect or appoint such other officers as it may deem advisable. The Board of Directors may also elect at such meeting one or more Associate Directors. Section 11. The Board of Directors may at any time remove, with or without cause, any member of any Committee appointed by it or any associate director or officer elected by it and may appoint or elect his successor. Section 12. The Board of Directors may designate an officer to be in charge of such of the departments or division of the Company as it may deem advisable. ARTICLE III COMMITTEES Section I. Executive Committee (A) The Executive Committee shall be composed of not more than nine members who shall be selected by the Board of Directors from its own members and who 2 shall hold office during the pleasure of the Board. (B) The Executive Committee shall have all the powers of the Board of Directors when it is not in session to transact all business for and in behalf of the Company that may be brought before it. (C) The Executive Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a week in each week the Board is not regularly scheduled to meet. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Executive Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Executive Committee shall be kept and submitted to the Board of Directors at its next meeting. (E) The Executive Committee shall advise and superintend all investments that may be made of the funds of the Company, and shall direct the disposal of the same, in accordance with such rules and regulations as the Board of Directors from time to time make. (F) In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Company by its directors and officers as contemplated by these By-Laws any two available members of the Executive Committee as constituted immediately prior to such disaster shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Company in accordance with the provisions of Article III of these By-Laws; and if less than three members of the Trust Committee is constituted immediately prior to such disaster shall be available for the transaction of its business, such Executive Committee shall also be empowered to exercise all of the powers reserved to the Trust Committee under Article III Section 2 hereof. In the event of the unavailability, at such time, of a minimum of two members of such Executive Committee, any three available directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Company in accordance with the foregoing provisions of this Section. This By-Law shall be subject to implementation by Resolutions of the Board of Directors presently existing or hereafter passed from time to time for that purpose, and any provisions of these By-Laws (other than this Section) and any resolutions which are contrary to the provisions of this Section or to the provisions of any such implementary Resolutions shall be suspended during such a disaster period until it shall be determined by any interim Executive Committee acting under this section that it shall be to the advantage of the Company to resume the conduct and management of its affairs and business under all of the other provisions of these By-Laws. 3 Section 2. Trust Committee (A) The Trust Committee shall be composed of not more than thirteen members who shall be selected by the Board of Directors, a majority of whom shall be members of the Board of Directors and who shall hold office during the pleasure of the Board. (B) The Trust Committee shall have general supervision over the Trust Department and the investment of trust funds, in all matters, however, being subject to the approval of the Board of Directors. (C) The Trust Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a month. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Trust Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Trust Committee shall be kept and promptly submitted to the Board of Directors. (E) The Trust Committee shall have the power to appoint Committees and/or designate officers or employees of the Company to whom supervision over the investment of trust funds may be delegated when the Trust Committee is not in session. Section 3. Audit Committee (A) The Audit Committee shall be composed of five members who shall be selected by the Board of Directors from its own members, none of whom shall be an officer of the Company, and shall hold office at the pleasure of the Board. (B) The Audit Committee shall have general supervision over the Audit Division in all matters however subject to the approval of the Board of Directors; it shall consider all matters brought to its attention by the officer in charge of the Audit Division, review all reports of examination of the Company made by any governmental agency or such independent auditor employed for that purpose, and make such recommendations to the Board of Directors with respect thereto or with respect to any other matters pertaining to auditing the Company as it shall deem desirable. (C) The Audit Committee shall meet whenever and wherever the majority of its members shall deem it to be proper for the transaction of its business, and a majority of its Committee shall constitute a quorum. Section 4. Compensation Committee (A) The Compensation Committee shall be composed of not more than 4 five (5) members who shall be selected by the Board of Directors from its own members who are not officers of the Company and who shall hold office during the pleasure of the Board. (B) The Compensation Committee shall in general advise upon all matters of policy concerning the Company brought to its attention by the management and from time to time review the management of the Company, major organizational matters, including salaries and employee benefits and specifically shall administer the Executive Incentive Compensation Plan. (C) Meetings of the Compensation Committee may be called at any time by the Chairman of the Compensation Committee, the Chairman of the Board of Directors, or the President of the Company. Section 5. Associate Directors (A) Any person who has served as a director may be elected by the Board of Directors as an associate director, to serve during the pleasure of the Board. (B) An associate director shall be entitled to attend all directors meetings and participate in the discussion of all matters brought to the Board, with the exception that he would have no right to vote. An associate director will be eligible for appointment to Committees of the Company, with the exception of the Executive Committee, Audit Committee and Compensation Committee, which must be comprised solely of active directors. Section 6. Absence or Disqualification of Any Member of a Committee (A) In the absence or disqualification of any member of any Committee created under Article III of the By-Laws of this Company, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absence or disqualified member. ARTICLE IV OFFICERS Section 1. The Chairman of the Board of Directors shall preside at all meetings of the Board and shall have such further authority and powers and shall perform such duties as the Board of Directors may from time to time confer and direct. He shall also exercise such powers and perform such duties as may from time to time be agreed upon between himself and the President of the Company. Section 2. The President shall have the powers and duties pertaining to the office of the President conferred or imposed upon him by statute or assigned to him by the Board of 5 Directors in the absence of the Chairman of the Board the President shall have the powers and duties of the Chairman of the Board. Section 3. The Chairman of the Board of Directors or the President as designated by the Board of Directors, shall carry into effect all legal directions of the Executive Committee and of the Board of Directors, and shall at all times exercise general supervision over the interest, affairs and operations of the Company and perform all duties incident to his office. Section 4. There may be one or more Vice Presidents, however denominated by the Board of Directors, who may at any time perform all the duties of the Chairman of the Board of Directors and/or the President and such other powers and duties as may from time to time be assigned to them by the Board of Directors, the Executive Committee, the Chairman of the Board or the President and by the officer in charge of the department or division to which they are assigned. Section 5. The Secretary shall attend to the giving of notice of meetings of the stockholders and the Board of Directors, as well as the Committees thereof, to the keeping of accurate minutes of all such meetings and to recording the same in the minute books of the Company. In addition to the other notice requirements of these By-Laws and as may be practicable under the circumstances, all such notices shall be in writing and mailed well in advance of the scheduled date of any other meeting. He shall have custody of the corporate seal and shall affix the same to any documents requiring such corporate seal and to attest the same. Section 6. The Treasurer shall have general supervision over all assets and liabilities of the Company. He shall be custodian of and responsible for all monies, funds and valuables of the Company and for the keeping of proper records of the evidence of property or indebtedness and of all the transactions of the Company. He shall have general supervision of the expenditures of the Company and shall report to the Board of Directors at each regular meeting of the condition of the Company, and perform such other duties as may be assigned to him from time to time by the Board of Directors of the Executive Committee. Section 7. There may be a Controller who shall exercise general supervision over the internal operations of the Company, including accounting, and shall render to the Board of Directors at appropriate times a report relating to the general condition and internal operations of the Company. There may be one or more subordinate accounting or controller officers however denominated, who may perform the duties of the Controller and such duties as may be prescribed by the Controller. Section 8. The officer designated by the Board of Directors to be in charge of the Audit Division of the Company with such title as the Board of Directors shall prescribe, shall 6 report to and be directly responsible only to the Board of Directors. There shall be an Auditor and there may be one or more Audit Officers, however denominated, who may perform all the duties of the Auditor and such duties as may be prescribed by the officer in charge of the Audit Division. Section 9. There may be one or more officers, subordinate in rank to all Vice Presidents with such functional titles as shall be determined from time to time by the Board of Directors, who shall ex officio hold the office Assistant Secretary of this Company and who may perform such duties as may be prescribed by the officer in charge of the department or division to whom they are assigned. Section 10. The powers and duties of all other officers of the Company shall be those usually pertaining to their respective offices, subject to the direction of the Board of Directors, the Executive Committee, Chairman of the Board of Directors or the President and the officer in charge of the department or division to which they are assigned. ARTICLE V STOCK AND STOCK CERTIFICATES Section 1. Shares of stock shall be transferrable on the books of the Company and a transfer book shall be kept in which all transfers of stock shall be recorded. Section 2. Certificate of stock shall bear the signature of the President or any Vice President, however denominated by the Board of Directors and countersigned by the Secretary or Treasurer or an Assistant Secretary, and the seal of the corporation shall be engraved thereon. Each certificate shall recite that the stock represented thereby is transferrable only upon the books of the Company by the holder thereof or his attorney, upon surrender of the certificate properly endorsed. Any certificate of stock surrendered to the Company shall be cancelled at the time of transfer, and before a new certificate or certificates shall be issued in lieu thereof. Duplicate certificates of stock shall be issued only upon giving such security as may be satisfactory to the Board of Directors or the Executive Committee. Section 3. The Board of Directors of the Company is authorized to fix in advance a record date for the determination of the stockholders entitled to notice of, and to vote at, any meeting of stockholders and any adjournment thereof, or entitled to receive payment of any dividend, or to any allotment or rights, or to exercise any rights in respect of any change, conversion or exchange of capital stock, or in connection with obtaining the consent of stockholders for any purpose, which record date shall not be more than 60 nor less than 10 days proceeding the date of any meeting of stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent. 7 ARTICLE VI SEAL Section 1. The corporate seal of the Company shall be in the following form: Between two concentric circles the words "Wilmington Trust Company" within the inner circle the words "Wilmington, Delaware." ARTICLE VII FISCAL YEAR Section 1. The fiscal year of the Company shall be the calendar year. ARTICLE VIII EXECUTION OF INSTRUMENTS OF THE COMPANY Section 1. The Chairman of the Board, the President or any Vice President, however denominated by the Board of Directors, shall have full power and authority to enter into, make, sign, execute, acknowledge and/or deliver and the Secretary or any Assistant Secretary shall have full power and authority to attest and affix the corporate seal of the Company to any and all deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes, mortgages and all other instruments incident to the business of this Company or in acting as executor, administrator, guardian, trustee, agent or in any other fiduciary or representative capacity by any and every method of appointment or by whatever person, corporation, court officer or authority in the State of Delaware, or elsewhere, without any specific authority, ratification, approval or confirmation by the Board of Directors or the Executive Committee, and any and all such instruments shall have the same force and validity as although expressly authorized by the Board of Directors and/or the Executive Committee. ARTICLE IX COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES Section 1. Directors and associate directors of the Company, other than salaried officers of the Company, shall be paid such reasonable honoraria or fees for attending meetings of the Board of Directors as the Board of Directors may from time to time determine. Directors and associate directors who serve as members of committees, other than salaried employees of the Company, shall be paid such reasonable honoraria or fees for services as members of committees as the Board of Directors shall from time to time determine and directors and associate directors may be employed by the Company for such 8 special services as the Board of Directors may from time to time determine and shall be paid for such special services so performed reasonable compensation as may be determined by the Board of Directors. ARTICLE X INDEMNIFICATION Section 1. (A) The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The Corporation shall indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation. (B) The Corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a Director officer in his capacity as a Director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Director or officer to repay all amounts advanced if it should be ultimately determined that the Director or officer is not entitled to be indemnified under this Article or otherwise. (C) If a claim for indemnification or payment of expenses, under this Article X is not paid in full within ninety days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification of payment of expenses under applicable law. (D) The rights conferred on any person by this Article X shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter or Act of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested Directors or otherwise. (E) Any repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. 9 ARTICLE XI AMENDMENTS TO THE BY-LAWS Section 1. These By-Laws may be altered, amended or repealed, in whole or in part, and any new By-Law or By-Laws adopted at any regular or special meeting of the Board of Directors by a vote of the majority of all the members of the Board of Directors then in office. 10 EXHIBIT C SECTION 321(B) CONSENT Pursuant to Section 321(b) of the Trust Indenture Act of 1939, Wilmington Trust Company hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities Exchange Commission upon requests therefor. WILMINGTON TRUST COMPANY Dated: August 12, 1996 By: /s/ Emmet R. Harmon --------------------- Name: Emmet R. Harmon Title: Vice President EXHIBIT D NOTICE This form is intended to assist state nonmember banks and savings banks with state publication requirements. It has not been approved by any state banking authorities. Refer to your appropriate state banking authorities for your state publication requirements. R E P O R T O F C O N D I T I O N Consolidating domestic subsidiaries of the WILMINGTON TRUST COMPANY of WILMINGTON Name of Bank City in the State of DELAWARE, at the close of business on March 31, 1996. --------
ASSETS Thousands of dollars Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coins.............................................198,158 Interest-bearing balances ........................................................................... 0 Held-to-maturity securities ................................................................................536,638 Available-for-sale securities...............................................................................862,050 Federal funds sold...........................................................................................82,000 Securities purchased under agreements to resell .............................................................25,000 Loans and lease financing receivables: Loans and leases, net of unearned income................. 3,404,372 LESS: Allowance for loan and lease losses .............. 48,153 LESS: Allocated transfer risk reserve .................. 0 Loans and leases, net of unearned income, allowance, and reserve..............................3,356,219 Assets held in trading accounts...................................................................................0 Premises and fixed assets (including capitalized leases).....................................................76,915 Other real estate owned......................................................................................16,314 Investments in unconsolidated subsidiaries and associated companies ............................................146 Customers' liability to this bank on acceptances outstanding......................................................0 Intangible assets.............................................................................................4,403 Other assets................................................................................................107,240 Total assets..............................................................................................5,265,083 CONTINUED ON NEXT PAGE LIABILITIES Deposits: In domestic offices.......................................................................................3,450,823 Noninterest-bearing ................ 689,843 Interest-bearing.................... 2,760,980 Federal funds purchased..................................................................................... 99,885 Securities sold under agreements to repurchase..............................................................198,506 Demand notes issued to the U.S. Treasury.....................................................................38,856 Trading liabilities...............................................................................................0 Other borrowed money:......................................................................................./////// With original maturity of one year or less......................................................930,611 With original maturity of more than one year.....................................................28,000 Mortgage indebtedness and obligations under capitalized leases................................................ 0 Bank's liability on acceptances executed and outstanding..........................................................0 Subordinated notes and debentures.................................................................................0 Other liabilities.........................................................................................4,847,513 Limited-life preferred stock and related surplus..................................................................0 EQUITY CAPITAL Perpetual preferred stock and related surplus.....................................................................0 Common Stock....................................................................................................500 Surplus......................................................................................................62,118 Undivided profits and capital reserves......................................................................354,791 Net unrealized holding gains (losses) on available-for-sale securities..................................... 161 Total equity capital........................................................................................417,570 Total liabilities, limited-life preferred stock, and equity capital.......................................5,265,083
2 EX-25.B 14 STATEMENT OF ELIGIBILITY OF PROPERTY TRUSTEE ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) X ----------------- WILMINGTON TRUST COMPANY (Exact name of trustee as specified in its charter) Delaware 51-0055023 (State of incorporation) (I.R.S. employer identification no.) Rodney Square North Wilmington, Delaware 19890 (Address of principal executive offices) Myfanwy Phillips Bonilla Asst. Vice President and Trust Counsel Wilmington Trust Company Rodney Square North Wilmington, Delaware 19890 (302) 651-8914 (Name, address and telephone number of agent for service) Southwestern Public Service Capital I (Exact name of obligor as specified in its Trust Agreements) Delaware To Be Applied For (State of organization) (I.R.S. employer identification no.) Tyler at Sixth Amarillo, Texas 79101 (Address of principal executive offices) (Zip Code) Southwestern Public Service Capital I Preferred Securities (Title of the indenture securities) ================================================================================ ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Deposit Insurance Co. State Bank Commissioner Five Penn Center Dover, Delaware Suite #2901 Philadelphia, PA (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each affiliation: Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee. ITEM 3. LIST OF EXHIBITS. List below all exhibits filed as part of this Statement of Eligibility and Qualification. A. Copy of the Charter of Wilmington Trust Company, which includes the certificate of authority of Wilmington Trust Company to commence business and the authorization of Wilmington Trust Company to exercise corporate trust powers. B. Copy of By-Laws of Wilmington Trust Company. C. Consent of Wilmington Trust Company required by Section 321(b) of Trust Indenture Act. D. Copy of most recent Report of Condition of Wilmington Trust Company. Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Wilmington Trust Company, a corporation organized and existing under the laws of Delaware, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Wilmington and State of Delaware on the 12th day of August, 1996. WILMINGTON TRUST COMPANY [SEAL] Attest: /s/ Cynthia L. Corliss By:/s/ Emmet R. Harmon ---------------------- ------------------- Assistant Secretary Name: Emmet R. Harmon Title: Vice President 2 EXHIBIT A AMENDED CHARTER WILMINGTON TRUST COMPANY WILMINGTON, DELAWARE AS EXISTING ON MAY 9, 1987 AMENDED CHARTER OR ACT OF INCORPORATION OF WILMINGTON TRUST COMPANY WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act of Incorporation of which company has been from time to time amended and changed by merger agreements pursuant to the corporation law for state banks and trust companies of the State of Delaware, does hereby alter and amend its Charter or Act of Incorporation so that the same as so altered and amended shall in its entirety read as follows: FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY. SECOND: - The location of its principal office in the State of Delaware is at Rodney Square North, in the City of Wilmington, County of New Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose address is Rodney Square North, in said City. In addition to such principal office, the said corporation maintains and operates branch offices in the City of Newark, New Castle County, Delaware, the Town of Newport, New Castle County, Delaware, at Claymont, New Castle County, Delaware, at Greenville, New Castle County Delaware, and at Milford Cross Roads, New Castle County, Delaware, and shall be empowered to open, maintain and operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in the City of Wilmington, New Castle County, Delaware, and such other branch offices or places of business as may be authorized from time to time by the agency or agencies of the government of the State of Delaware empowered to confer such authority. THIRD: - (a) The nature of the business and the objects and purposes proposed to be transacted, promoted or carried on by this Corporation are to do any or all of the things herein mentioned as fully and to the same extent as natural persons might or could do and in any part of the world, viz.: (1) To sue and be sued, complain and defend in any Court of law or equity and to make and use a common seal, and alter the seal at pleasure, to hold, purchase, convey, mortgage or otherwise deal in real and personal estate and property, and to appoint such officers and agents as the business of the Corporation shall require, to make by-laws not inconsistent with the Constitution or laws of the United States or of this State, to discount bills, notes or other evidences of debt, to receive deposits of money, or securities for money, to buy gold and silver bullion and foreign coins, to buy and sell bills of exchange, and generally to use, exercise and enjoy all the powers, rights, privileges and franchises incident to a corporation which are proper or necessary for the transaction of the business of the Corporation hereby created. (2) To insure titles to real and personal property, or any estate or interests therein, and to guarantee the holder of such property, real or personal, against any claim or claims, adverse to his interest therein, and to prepare and give certificates of title for any lands or premises in the State of Delaware, or elsewhere. (3) To act as factor, agent, broker or attorney in the receipt, collection, custody, investment and management of funds, and the purchase, sale, management and disposal of property of all descriptions, and to prepare and execute all papers which may be necessary or proper in such business. (4) To prepare and draw agreements, contracts, deeds, leases, conveyances, mortgages, bonds and legal papers of every description, and to carry on the business of conveyancing in all its branches. (5) To receive upon deposit for safekeeping money, jewelry, plate, deeds, bonds and any and all other personal property of every sort and kind, from executors, administrators, guardians, public officers, courts, receivers, assignees, trustees, and from all fiduciaries, and from all other persons and individuals, and from all corporations whether state, municipal, corporate or private, and to rent boxes, safes, vaults and other receptacles for such property. (6) To act as agent or otherwise for the purpose of registering, issuing, certificating, countersigning, transferring or underwriting the stock, bonds or other obligations of any corporation, association, state or municipality, and may receive and manage any sinking fund therefor on such terms as may be agreed upon between the two parties, and in like manner may act as Treasurer of any corporation or municipality. (7) To act as Trustee under any deed of trust, mortgage, bond or other instrument issued by any state, municipality, body politic, corporation, association or person, either alone or in conjunction with any other person or persons, corporation or corporations. (8) To guarantee the validity, performance or effect of any contract or 2 agreement, and the fidelity of persons holding places of responsibility or trust; to become surety for any person, or persons, for the faithful performance of any trust, office, duty, contract or agreement, either by itself or in conjunction with any other person, or persons, corporation, or corporations, or in like manner become surety upon any bond, recognizance, obligation, judgment, suit, order, or decree to be entered in any court of record within the State of Delaware or elsewhere, or which may now or hereafter be required by any law, judge, officer or court in the State of Delaware or elsewhere. (9) To act by any and every method of appointment as trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity in the receiving, holding, managing, and disposing of any and all estates and property, real, personal or mixed, and to be appointed as such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian or bailee by any persons, corporations, court, officer, or authority, in the State of Delaware or elsewhere; and whenever this Corporation is so appointed by any person, corporation, court, officer or authority such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity, it shall not be required to give bond with surety, but its capital stock shall be taken and held as security for the performance of the duties devolving upon it by such appointment. (10) And for its care, management and trouble, and the exercise of any of its powers hereby given, or for the performance of any of the duties which it may undertake or be called upon to perform, or for the assumption of any responsibility the said Corporation may be entitled to receive a proper compensation. (11) To purchase, receive, hold and own bonds, mortgages, debentures, shares of capital stock, and other securities, obligations, contracts and evidences of indebtedness, of any private, public or municipal corporation within and without the State of Delaware, or of the Government of the United States, or of any state, territory, colony, or possession thereof, or of any foreign government or country; to receive, collect, receipt for, and dispose of interest, dividends and income upon and from any of the bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property held and owned by it, and to exercise in respect of all such bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property, any and all the rights, powers and privileges of individual owners thereof, including the right to vote thereon; to invest and deal in and with any of the moneys of the Corporation upon such securities and in such manner as it may think fit and proper, and from time to time to vary or 3 realize such investments; to issue bonds and secure the same by pledges or deeds of trust or mortgages of or upon the whole or any part of the property held or owned by the Corporation, and to sell and pledge such bonds, as and when the Board of Directors shall determine, and in the promotion of its said corporate business of investment and to the extent authorized by law, to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey real and personal property of any name and nature and any estate or interest therein. (b) In furtherance of, and not in limitation, of the powers conferred by the laws of the State of Delaware, it is hereby expressly provided that the said Corporation shall also have the following powers: (1) To do any or all of the things herein set forth, to the same extent as natural persons might or could do, and in any part of the world. (2) To acquire the good will, rights, property and franchises and to undertake the whole or any part of the assets and liabilities of any person, firm, association or corporation, and to pay for the same in cash, stock of this Corporation, bonds or otherwise; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business. (3) To take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell, exchange, transfer, or in any manner whatever dispose of property, real, personal or mixed, wherever situated. (4) To enter into, make, perform and carry out contracts of every kind with any person, firm, association or corporation, and, without limit as to amount, to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or transferable instruments. (5) To have one or more offices, to carry on all or any of its operations and businesses, without restriction to the same extent as natural persons might or could do, to purchase or otherwise acquire, to hold, own, to mortgage, sell, convey or otherwise dispose of, real and personal property, of every class and description, in any State, District, Territory or Colony of the United States, and in any foreign country or place. (6) It is the intention that the objects, purposes and powers specified and clauses contained in this paragraph shall (except where otherwise expressed in said paragraph) be nowise limited or restricted by reference to or inference 4 from the terms of any other clause of this or any other paragraph in this charter, but that the objects, purposes and powers specified in each of the clauses of this paragraph shall be regarded as independent objects, purposes and powers. FOURTH: - (a) The total number of shares of all classes of stock which the Corporation shall have authority to issue is forty-one million (41,000,000) shares, consisting of: (1) One million (1,000,000) shares of Preferred stock, par value $10.00 per share (hereinafter referred to as "Preferred Stock"); and (2) Forty million (40,000,000) shares of Common Stock, par value $1.00 per share (hereinafter referred to as "Common Stock"). (b) Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends, if any, thereon shall be cumulative, if made cumulative. The voting powers and the preferences and relative, participating, optional and other special rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding; and, subject to the provisions of subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of Directors of the Corporation is hereby expressly granted authority to fix by resolution or resolutions adopted prior to the issuance of any shares of a particular series of Preferred Stock, the voting powers and the designations, preferences and relative, optional and other special rights, and the qualifications, limitations and restrictions of such series, including, but without limiting the generality of the foregoing, the following: (1) The distinctive designation of, and the number of shares of Preferred Stock which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors; (2) The rate and times at which, and the terms and conditions on which, dividends, if any, on Preferred Stock of such series shall be paid, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes, or series of the same or other class of stock and whether such dividends shall be cumulative or non-cumulative; (3) The right, if any, of the holders of Preferred Stock of such series to 5 convert the same into or exchange the same for, shares of any other class or classes or of any series of the same or any other class or classes of stock of the Corporation and the terms and conditions of such conversion or exchange; (4) Whether or not Preferred Stock of such series shall be subject to redemption, and the redemption price or prices and the time or times at which, and the terms and conditions on which, Preferred Stock of such series may be redeemed. (5) The rights, if any, of the holders of Preferred Stock of such series upon the voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding-up, of the Corporation. (6) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock of such series; and (7) The voting powers, if any, of the holders of such series of Preferred Stock which may, without limiting the generality of the foregoing include the right, voting as a series or by itself or together with other series of Preferred Stock or all series of Preferred Stock as a class, to elect one or more directors of the Corporation if there shall have been a default in the payment of dividends on any one or more series of Preferred Stock or under such circumstances and on such conditions as the Board of Directors may determine. (c) (1) After the requirements with respect to preferential dividends on the Preferred Stock (fixed in accordance with the provisions of section (b) of this Article FOURTH), if any, shall have been met and after the Corporation shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of section (b) of this Article FOURTH), and subject further to any conditions which may be fixed in accordance with the provisions of section (b) of this Article FOURTH, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors. (2) After distribution in full of the preferential amount, if any, (fixed in accordance with the provisions of section (b) of this Article FOURTH), to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up, of the Corporation, the holders of the Common Stock shall be entitled to receive all of the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them 6 respectively. (3) Except as may otherwise be required by law or by the provisions of such resolution or resolutions as may be adopted by the Board of Directors pursuant to section (b) of this Article FOURTH, each holder of Common Stock shall have one vote in respect of each share of Common Stock held on all matters voted upon by the stockholders. (d) No holder of any of the shares of any class or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued stock of any class or series or any additional shares of any class or series to be issued by reason of any increase of the authorized capital stock of the Corporation of any class or series, or bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for stock of the Corporation of any class or series, or carrying any right to purchase stock of any class or series, but any such unissued stock, additional authorized issue of shares of any class or series of stock or securities convertible into or exchangeable for stock, or carrying any right to purchase stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, corporations or associations, whether such holders or others, and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its sole discretion. (e) The relative powers, preferences and rights of each series of Preferred Stock in relation to the relative powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in section (b) of this Article FOURTH and the consent, by class or series vote or otherwise, of the holders of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether or not the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in the resolution or resolutions as to any series of Preferred Stock adopted pursuant to section (b) of this Article FOURTH that the consent of the holders of a majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock. (f) Subject to the provisions of section (e), shares of any series of Preferred Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the 7 Board of Directors. (g) Shares of Common Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors. (h) The authorized amount of shares of Common Stock and of Preferred Stock may, without a class or series vote, be increased or decreased from time to time by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon. FIFTH: - (a) The business and affairs of the Corporation shall be conducted and managed by a Board of Directors. The number of directors constituting the entire Board shall be not less than five nor more than twenty-five as fixed from time to time by vote of a majority of the whole Board, provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the whole Board shall be twenty-four until otherwise fixed by a majority of the whole Board. (b) The Board of Directors shall be divided into three classes, as nearly equal in number as the then total number of directors constituting the whole Board permits, with the term of office of one class expiring each year. At the annual meeting of stockholders in 1982, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next annual election of directors. At such election, the stockholders shall elect a successor to such director to hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. (c) Notwithstanding any other provisions of this Charter or Act of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, this Charter or Act of Incorporation or the ByLaws of the Corporation), any director or the entire Board of Directors of the Corporation may be removed at any time without cause, but only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the stockholders called for that 8 purpose. (d) Nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors. Such nominations shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the Corporation not less than 14 days nor more than 50 days prior to any meeting of the stockholders called for the election of directors; provided, however, that if less than 21 days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the seventh day following the day on which notice of the meeting was mailed to stockholders. Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman on behalf of the Board. (e) Each notice under subsection (d) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of such nominee and (iii) the number of shares of stock of the Corporation which are beneficially owned by each such nominee. (f) The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. (g) No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. SIXTH: - The Directors shall choose such officers, agent and servants as may be provided in the By-Laws as they may from time to time find necessary or proper. SEVENTH: - The Corporation hereby created is hereby given the same powers, rights and privileges as may be conferred upon corporations organized under the Act entitled "An Act Providing a General Corporation Law", approved March 10, 1899, as from time to time amended. EIGHTH: - This Act shall be deemed and taken to be a private Act. NINTH: - This Corporation is to have perpetual existence. TENTH: - The Board of Directors, by resolution passed by a majority of the whole Board, may designate any of their number to constitute an Executive Committee, 9 which Committee, to the extent provided in said resolution, or in the By-Laws of the Company, shall have and may exercise all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. ELEVENTH: - The private property of the stockholders shall not be liable for the payment of corporate debts to any extent whatever. TWELFTH: - The Corporation may transact business in any part of the world. THIRTEENTH: - The Board of Directors of the Corporation is expressly authorized to make, alter or repeal the By-Laws of the Corporation by a vote of the majority of the entire Board. The stockholders may make, alter or repeal any By-Law whether or not adopted by them, provided however, that any such additional By-Laws, alterations or repeal may be adopted only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class). FOURTEENTH: - Meetings of the Directors may be held outside of the State of Delaware at such places as may be from time to time designated by the Board, and the Directors may keep the books of the Company outside of the State of Delaware at such places as may be from time to time designated by them. FIFTEENTH: - (a) In addition to any affirmative vote required by law, and except as otherwise expressly provided in sections (b) and (c) of this Article FIFTEENTH: (A) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with or into (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder), which, after such merger or consolidation, would be an Affiliate (as hereinafter defined) of an Interested Stockholder, or (B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate fair market value of $1,000,000 or more, or (C) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of related transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other 10 property (or a combination thereof) having an aggregate fair market value of $1,000,000 or more, or (D) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation, or (E) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder, or any Affiliate of any Interested Stockholder, shall require the affirmative vote of the holders of at least two-thirds of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purpose of this Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise. (2) The term "business combination" as used in this Article FIFTEENTH shall mean any transaction which is referred to any one or more of clauses (A) through (E) of paragraph 1 of the section (a). (b) The provisions of section (a) of this Article FIFTEENTH shall not be applicable to any particular business combination and such business combination shall require only such affirmative vote as is required by law and any other provisions of the Charter or Act of Incorporation of By-Laws if such business combination has been approved by a majority of the whole Board. (c) For the purposes of this Article FIFTEENTH: (1) A "person" shall mean any individual firm, corporation or other entity. (2) "Interested Stockholder" shall mean, in respect of any business combination, any person (other than the Corporation or any Subsidiary) who or which as of the record date for the determination of stockholders entitled to notice of and to vote on such business combination, or immediately prior to the consummation of any such transaction: (A) is the beneficial owner, directly or indirectly, of more than 10% of the 11 Voting Shares, or (B) is an Affiliate of the Corporation and at any time within two years prior thereto was the beneficial owner, directly or indirectly, of not less than 10% of the then outstanding voting Shares, or (C) is an assignee of or has otherwise succeeded in any share of capital stock of the Corporation which were at any time within two years prior thereto beneficially owned by any Interested Stockholder, and such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (3) A person shall be the "beneficial owner" of any Voting Shares: (A) which such person or any of its Affiliates and Associates (as hereafter defined) beneficially own, directly or indirectly, or (B) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding, or (C) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation. (4) The outstanding Voting Shares shall include shares deemed owned through application of paragraph (3) above but shall not include any other Voting Shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options or otherwise. (5) "Affiliate" and "Associate" shall have the respective meanings given those terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on December 31, 1981. (6) "Subsidiary" shall mean any corporation of which a majority of any class of equity security (as defined in Rule 3a11-1 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect in December 31, 1981) is owned, directly or indirectly, by the Corporation; provided, however, that for the 12 purposes of the definition of Investment Stockholder set forth in paragraph (2) of this section (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. (d) majority of the directors shall have the power and duty to determine for the purposes of this Article FIFTEENTH on the basis of information known to them, (1) the number of Voting Shares beneficially owned by any person (2) whether a person is an Affiliate or Associate of another, (3) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in paragraph (3) of section (c), or (4) whether the assets subject to any business combination or the consideration received for the issuance or transfer of securities by the Corporation, or any Subsidiary has an aggregate fair market value of $1,00,000 or more. (e) Nothing contained in this Article FIFTEENTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. SIXTEENTH: Notwithstanding any other provision of this Charter or Act of Incorporation or the By-Laws of the Corporation (and in addition to any other vote that may be required by law, this Charter or Act of Incorporation by the By-Laws), the affirmative vote of the holders of at least two-thirds of the outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter or Act of Incorporation. SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Laws as the same exists or may hereafter be amended. (b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a Director of the Corporation existing hereunder with respect to any act or omission occurring prior to the time of such repeal or modification." 13 EXHIBIT B BY-LAWS WILMINGTON TRUST COMPANY WILMINGTON, DELAWARE AS EXISTING ON FEBRUARY 21, 1991 BY-LAWS OF WILMINGTON TRUST COMPANY ARTICLE I STOCKHOLDERS' MEETINGS Section 1. The Annual Meeting of Stockholders shall be held on the third Thursday in April each year at the principal office at the Company or at such other date, time, or place as may be designated by resolution by the Board of Directors. Section 2. Special meetings of all stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President. Section 3. Notice of all meetings of the stockholders shall be given by mailing to each stockholder at least ten (10 days before said meeting, at his last known address, a written or printed notice fixing the time and place of such meeting. Section 4. A majority in the amount of the capital stock of the Company issued and outstanding on the record date, as herein determined, shall constitute a quorum at all meetings of stockholders for the transaction of any business, but the holders of a small number of shares may adjourn, from time to time, without further notice, until a quorum is secured. At each annual or special meeting of stockholders, each stockholder shall be entitled to one vote, either in person or by proxy, for each shares of stock registered in the stockholder's name on the books of the Company on the record date for any such meeting as determined herein. ARTICLE II DIRECTORS Section 1. The number and classification of the Board of Directors shall be as set forth in the Charter of the Bank. Section 2. No person who has attained the age of seventy-two (72) years shall be nominated for election to the Board of Directors of the Company, provided, however, that this limitation shall not apply to any person who was serving as director of the Company on September 16, 1971. Section 3. The class of Directors so elected shall hold office for three years or until their successors are elected and qualified. Section 4. The affairs and business of the Company shall be managed and conducted by the Board of Directors. Section 5. Regular meetings of the Board of Directors shall be held on the third Thursday of each month at the principal office of the Company, or at such other place and time as may be designated by the Board of Directors, the Chairman of the Board, or the President. Section 6. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors or by the President, and shall be called upon the written request of a majority of the directors. Section 7. A majority of the directors elected and qualified shall be necessary to constitute a quorum for the transaction of business at any meeting of the Board of Directors. Section 8. Written notice shall be sent by mail to each director of any special meeting of the Board of Directors, and of any change in the time or place of any regular meeting, stating the time and place of such meeting, which shall be mailed not less than two days before the time of holding such meeting. Section 9. In the event of the death, resignation, removal, inability to act, or disqualification of any director, the Board of Directors, although less than a quorum, shall have the right to elect the successor who shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director's successor shall have been duly elected and qualified. Section 10. The Board of Directors at its first meeting after its election by the stockholders shall appoint an Executive Committee, a Trust Committee, an Audit Committee and a Compensation Committee, and shall elect from its own members a Chairman of the Board of Directors and a President who may be the same person. The Board of Directors shall also elect at such meeting a Secretary and a Treasurer, who may be the same person, may appoint at any time such other committees and elect or appoint such other officers as it may deem advisable. The Board of Directors may also elect at such meeting one or more Associate Directors. Section 11. The Board of Directors may at any time remove, with or without cause, any member of any Committee appointed by it or any associate director or officer elected by it and may appoint or elect his successor. Section 12. The Board of Directors may designate an officer to be in charge of such of the departments or division of the Company as it may deem advisable. ARTICLE III COMMITTEES Section I. Executive Committee (A) The Executive Committee shall be composed of not more than nine members who shall be selected by the Board of Directors from its own members and who 2 shall hold office during the pleasure of the Board. (B) The Executive Committee shall have all the powers of the Board of Directors when it is not in session to transact all business for and in behalf of the Company that may be brought before it. (C) The Executive Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a week in each week the Board is not regularly scheduled to meet. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Executive Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Executive Committee shall be kept and submitted to the Board of Directors at its next meeting. (E) The Executive Committee shall advise and superintend all investments that may be made of the funds of the Company, and shall direct the disposal of the same, in accordance with such rules and regulations as the Board of Directors from time to time make. (F) In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Company by its directors and officers as contemplated by these By-Laws any two available members of the Executive Committee as constituted immediately prior to such disaster shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Company in accordance with the provisions of Article III of these By-Laws; and if less than three members of the Trust Committee is constituted immediately prior to such disaster shall be available for the transaction of its business, such Executive Committee shall also be empowered to exercise all of the powers reserved to the Trust Committee under Article III Section 2 hereof. In the event of the unavailability, at such time, of a minimum of two members of such Executive Committee, any three available directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Company in accordance with the foregoing provisions of this Section. This By-Law shall be subject to implementation by Resolutions of the Board of Directors presently existing or hereafter passed from time to time for that purpose, and any provisions of these By- Laws(other than this Section) and any resolutions which are contrary to the provisions of this Section or to the provisions of any such implementary Resolutions shall be suspended during such a disaster period until it shall be determined by any interim Executive Committee acting under this section that it shall be to the advantage of the Company to resume the conduct and management of its affairs and business under all of the other provisions of these By-Laws. 3 Section 2. Trust Committee (A) The Trust Committee shall be composed of not more than thirteen members who shall be selected by the Board of Directors, a majority of whom shall be members of the Board of Directors and who shall hold office during the pleasure of the Board. (B) The Trust Committee shall have general supervision over the Trust Department and the investment of trust funds, in all matters, however, being subject to the approval of the Board of Directors. (C) The Trust Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a month. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Trust Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Trust Committee shall be kept and promptly submitted to the Board of Directors. (E) The Trust Committee shall have the power to appoint Committees and/or designate officers or employees of the Company to whom supervision over the investment of trust funds may be delegated when the Trust Committee is not in session. Section 3. Audit Committee (A) The Audit Committee shall be composed of five members who shall be selected by the Board of Directors from its own members, none of whom shall be an officer of the Company, and shall hold office at the pleasure of the Board. (B) The Audit Committee shall have general supervision over the Audit Division in all matters however subject to the approval of the Board of Directors; it shall consider all matters brought to its attention by the officer in charge of the Audit Division, review all reports of examination of the Company made by any governmental agency or such independent auditor employed for that purpose, and make such recommendations to the Board of Directors with respect thereto or with respect to any other matters pertaining to auditing the Company as it shall deem desirable. (C) The Audit Committee shall meet whenever and wherever the majority of its members shall deem it to be proper for the transaction of its business, and a majority of its Committee shall constitute a quorum. Section 4. Compensation Committee (A) The Compensation Committee shall be composed of not more than 4 five (5) members who shall be selected by the Board of Directors from its own members who are not officers of the Company and who shall hold office during the pleasure of the Board. (B) The Compensation Committee shall in general advise upon all matters of policy concerning the Company brought to its attention by the management and from time to time review the management of the Company, major organizational matters, including salaries and employee benefits and specifically shall administer the Executive Incentive Compensation Plan. (C) Meetings of the Compensation Committee may be called at any time by the Chairman of the Compensation Committee, the Chairman of the Board of Directors, or the President of the Company. Section 5. Associate Directors (A) Any person who has served as a director may be elected by the Board of Directors as an associate director, to serve during the pleasure of the Board. (B) An associate director shall be entitled to attend all directors meetings and participate in the discussion of all matters brought to the Board, with the exception that he would have no right to vote. An associate director will be eligible for appointment to Committees of the Company, with the exception of the Executive Committee, Audit Committee and Compensation Committee, which must be comprised solely of active directors. Section 6. Absence or Disqualification of Any Member of a Committee (A) In the absence or disqualification of any member of any Committee created under Article III of the By-Laws of this Company, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absence or disqualified member. ARTICLE IV OFFICERS Section 1. The Chairman of the Board of Directors shall preside at all meetings of the Board and shall have such further authority and powers and shall perform such duties as the Board of Directors may from time to time confer and direct. He shall also exercise such powers and perform such duties as may from time to time be agreed upon between himself and the President of the Company. Section 2. The President shall have the powers and duties pertaining to the office of the President conferred or imposed upon him by statute or assigned to him by the Board of 5 Directors in the absence of the Chairman of the Board the President shall have the powers and duties of the Chairman of the Board. Section 3. The Chairman of the Board of Directors or the President as designated by the Board of Directors, shall carry into effect all legal directions of the Executive Committee and of the Board of Directors, and shall at all times exercise general supervision over the interest, affairs and operations of the Company and perform all duties incident to his office. Section 4. There may be one or more Vice Presidents, however denominated by the Board of Directors, who may at any time perform all the duties of the Chairman of the Board of Directors and/or the President and such other powers and duties as may from time to time be assigned to them by the Board of Directors, the Executive Committee, the Chairman of the Board or the President and by the officer in charge of the department or division to which they are assigned. Section 5. The Secretary shall attend to the giving of notice of meetings of the stockholders and the Board of Directors, as well as the Committees thereof, to the keeping of accurate minutes of all such meetings and to recording the same in the minute books of the Company. In addition to the other notice requirements of these By-Laws and as may be practicable under the circumstances, all such notices shall be in writing and mailed well in advance of the scheduled date of any other meeting. He shall have custody of the corporate seal and shall affix the same to any documents requiring such corporate seal and to attest the same. Section 6. The Treasurer shall have general supervision over all assets and liabilities of the Company. He shall be custodian of and responsible for all monies, funds and valuables of the Company and for the keeping of proper records of the evidence of property or indebtedness and of all the transactions of the Company. He shall have general supervision of the expenditures of the Company and shall report to the Board of Directors at each regular meeting of the condition of the Company, and perform such other duties as may be assigned to him from time to time by the Board of Directors of the Executive Committee. Section 7. There may be a Controller who shall exercise general supervision over the internal operations of the Company, including accounting, and shall render to the Board of Directors at appropriate times a report relating to the general condition and internal operations of the Company. There may be one or more subordinate accounting or controller officers however denominated, who may perform the duties of the Controller and such duties as may be prescribed by the Controller. Section 8. The officer designated by the Board of Directors to be in charge of the Audit Division of the Company with such title as the Board of Directors shall prescribe, shall 6 report to and be directly responsible only to the Board of Directors. There shall be an Auditor and there may be one or more Audit Officers, however denominated, who may perform all the duties of the Auditor and such duties as may be prescribed by the officer in charge of the Audit Division. Section 9. There may be one or more officers, subordinate in rank to all Vice Presidents with such functional titles as shall be determined from time to time by the Board of Directors, who shall ex officio hold the office Assistant Secretary of this Company and who may perform such duties as may be prescribed by the officer in charge of the department or division to whom they are assigned. Section 10. The powers and duties of all other officers of the Company shall be those usually pertaining to their respective offices, subject to the direction of the Board of Directors, the Executive Committee, Chairman of the Board of Directors or the President and the officer in charge of the department or division to which they are assigned. ARTICLE V STOCK AND STOCK CERTIFICATES Section 1. Shares of stock shall be transferrable on the books of the Company and a transfer book shall be kept in which all transfers of stock shall be recorded. Section 2. Certificate of stock shall bear the signature of the President or any Vice President, however denominated by the Board of Directors and countersigned by the Secretary or Treasurer or an Assistant Secretary, and the seal of the corporation shall be engraved thereon. Each certificate shall recite that the stock represented thereby is transferrable only upon the books of the Company by the holder thereof or his attorney, upon surrender of the certificate properly endorsed. Any certificate of stock surrendered to the Company shall be cancelled at the time of transfer, and before a new certificate or certificates shall be issued in lieu thereof. Duplicate certificates of stock shall be issued only upon giving such security as may be satisfactory to the Board of Directors or the Executive Committee. Section 3. The Board of Directors of the Company is authorized to fix in advance a record date for the determination of the stockholders entitled to notice of, and to vote at, any meeting of stockholders and any adjournment thereof, or entitled to receive payment of any dividend, or to any allotment or rights, or to exercise any rights in respect of any change, conversion or exchange of capital stock, or in connection with obtaining the consent of stockholders for any purpose, which record date shall not be more than 60 nor less than 10 days proceeding the date of any meeting of stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent. 7 ARTICLE VI SEAL Section 1. The corporate seal of the Company shall be in the following form: Between two concentric circles the words "Wilmington Trust Company" within the inner circle the words "Wilmington, Delaware." ARTICLE VII FISCAL YEAR Section 1. The fiscal year of the Company shall be the calendar year. ARTICLE VIII EXECUTION OF INSTRUMENTS OF THE COMPANY Section 1. The Chairman of the Board, the President or any Vice President, however denominated by the Board of Directors, shall have full power and authority to enter into, make, sign, execute, acknowledge and/or deliver and the Secretary or any Assistant Secretary shall have full power and authority to attest and affix the corporate seal of the Company to any and all deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes, mortgages and all other instruments incident to the business of this Company or in acting as executor, administrator, guardian, trustee, agent or in any other fiduciary or representative capacity by any and every method of appointment or by whatever person, corporation, court officer or authority in the State of Delaware, or elsewhere, without any specific authority, ratification, approval or confirmation by the Board of Directors or the Executive Committee, and any and all such instruments shall have the same force and validity as although expressly authorized by the Board of Directors and/or the Executive Committee. ARTICLE IX COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES Section 1. Directors and associate directors of the Company, other than salaried officers of the Company, shall be paid such reasonable honoraria or fees for attending meetings of the Board of Directors as the Board of Directors may from time to time determine. Directors and associate directors who serve as members of committees, other than salaried employees of the Company, shall be paid such reasonable honoraria or fees for services as members of committees as the Board of Directors shall from time to time determine and directors and associate directors may be employed by the Company for such 8 special services as the Board of Directors may from time to time determine and shall be paid for such special services so performed reasonable compensation as may be determined by the Board of Directors. ARTICLE X INDEMNIFICATION Section 1. (A) The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The Corporation shall indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation. (B) The Corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a Director officer in his capacity as a Director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Director or officer to repay all amounts advanced if it should be ultimately determined that the Director or officer is not entitled to be indemnified under this Article or otherwise. (C) If a claim for indemnification or payment of expenses, under this Article X is not paid in full within ninety days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification of payment of expenses under applicable law. (D) The rights conferred on any person by this Article X shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter or Act of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested Directors or otherwise. (E) Any repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. 9 ARTICLE XI AMENDMENTS TO THE BY-LAWS Section 1. These By-Laws may be altered, amended or repealed, in whole or in part, and any new By-Law or By-Laws adopted at any regular or special meeting of the Board of Directors by a vote of the majority of all the members of the Board of Directors then in office. 10 EXHIBIT C SECTION 321(B) CONSENT Pursuant to Section 321(b) of the Trust Indenture Act of 1939, Wilmington Trust Company hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities Exchange Commission upon requests therefor. WILMINGTON TRUST COMPANY Dated: August 12, 1996 By: /s/ Emmet R. Harmon ------------------- Name: Emmet R. Harmon Title: Vice President EXHIBIT D NOTICE This form is intended to assist state nonmember banks and savings banks with state publication requirements. It has not been approved by any state banking authorities. Refer to your appropriate state banking authorities for your state publication requirements. R E P O R T O F C O N D I T I O N Consolidating domestic subsidiaries of the - ------------------------------------------ ----------------- WILMINGTON TRUST COMPANY of WILMINGTON Name of Bank City in the State of DELAWARE , at the close of business on March 31, 1996. ------------
ASSETS Thousands of dollars Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coins........................................................198,158 Interest-bearing balances .......................................................................................0 Held-to-maturity securities ....................................................................................536,638 Available-for-sale securities...................................................................................862,050 Federal funds sold...............................................................................................82,000 Securities purchased under agreements to resell .................................................................25,000 Loans and lease financing receivables: Loans and leases, net of unearned income..........................3,404,372 LESS: Allowance for loan and lease losses .................................................................48,153 LESS: Allocated transfer risk reserve ..........................................................................0 Loans and leases, net of unearned income, allowance, and reserve.........................................3,356,219 Assets held in trading accounts.......................................................................................0 Premises and fixed assets (including capitalized leases).........................................................76,915 Other real estate owned..........................................................................................16,314 Investments in unconsolidated subsidiaries and associated companies ................................................146 Customers' liability to this bank on acceptances outstanding..........................................................0 Intangible assets.................................................................................................4,403 Other assets....................................................................................................107,240 Total assets..................................................................................................5,265,083 CONTINUED ON NEXT PAGE LIABILITIES Deposits: In domestic offices...........................................................................................3,450,823 Noninterest-bearing................................................689,843 Interest-bearing.................................................2,760,980 Federal funds purchased..........................................................................................99,885 Securities sold under agreements to repurchase..................................................................198,506 Demand notes issued to the U.S. Treasury.........................................................................38,856 Trading liabilities...................................................................................................0 Other borrowed money:.........................................................................................../////// With original maturity of one year or less..........................................................930,611 With original maturity of more than one year.........................................................28,000 Mortgage indebtedness and obligations under capitalized leases........................................................0 Bank's liability on acceptances executed and outstanding..............................................................0 Subordinated notes and debentures.....................................................................................0 Other liabilities...............................................................................................100,832 Total liabilities......................................................4,847,513 Limited-life preferred stock and related surplus......................................................................0 EQUITY CAPITAL Perpetual preferred stock and related surplus.........................................................................0 Common Stock........................................................................................................500 Surplus..........................................................................................................62,118 Undivided profits and capital reserves..........................................................................354,791 Net unrealized holding gains (losses) on available-for-sale securities..............................................161 Total equity capital............................................................................................417,570 Total liabilities, limited-life preferred stock, and equity capital...........................................5,265,083
2 EX-25.C 15 STATEMENT OF ELIGIBILITY OF GUARANTEE TRUSTEE =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) X --- WILMINGTON TRUST COMPANY (Exact name of trustee as specified in its charter) Delaware 51-0055023 (State of incorporation) (I.R.S. employer identification no.) Rodney Square North Wilmington, Delaware 19890 (Address of principal executive offices) Myfanwy Phillips Bonilla Asst. Vice President and Trust Counsel Wilmington Trust Company Rodney Square North Wilmington, Delaware 19890 (302) 651-8914 (Name, address and telephone number of agent for service) Southwestern Public Service Company (Exact name of obligor as specified in its Trust Agreements) New Mexico 75-0575400 (State of organization) (I.R.S. employer identification no.) Tyler at Sixth Amarillo, Texas 79101 (Address of principal executive offices) (Zip Code) Southwestern Public Service Company Guarantees with respect to Preferred Securities (Title of the indenture securities) ================================================================================ ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Deposit Insurance Co. State Bank Commissioner Five Penn Center Dover, Delaware Suite #2901 Philadelphia, PA (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each affiliation: Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee. ITEM 3. LIST OF EXHIBITS. List below all exhibits filed as part of this Statement of Eligibility and Qualification. A. Copy of the Charter of Wilmington Trust Company, which includes the certificate of authority of Wilmington Trust Company to commence business and the authorization of Wilmington Trust Company to exercise corporate trust powers. B. Copy of By-Laws of Wilmington Trust Company. C. Consent of Wilmington Trust Company required by Section 321(b) of Trust Indenture Act. D. Copy of most recent Report of Condition of Wilmington Trust Company. Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Wilmington Trust Company, a corporation organized and existing under the laws of Delaware, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Wilmington and State of Delaware on the 12th day of August, 1996. WILMINGTON TRUST COMPANY [SEAL] Attest:/s/ Cynthia L. Corliss By:/s/ Emmet R. Harmon ---------------------- ---------------------- Assistant Secretary Name: Emmet R. Harmon Title: Vice President 2 EXHIBIT A AMENDED CHARTER Wilmington Trust Company Wilmington, Delaware As existing on May 9, 1987 Amended Charter or Act of Incorporation of Wilmington Trust Company Wilmington Trust Company, originally incorporated by an Act of the General Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which company was changed to "Wilmington Trust Company" by an amendment filed in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act of Incorporation of which company has been from time to time amended and changed by merger agreements pursuant to the corporation law for state banks and trust companies of the State of Delaware, does hereby alter and amend its Charter or Act of Incorporation so that the same as so altered and amended shall in its entirety read as follows: First: - The name of this corporation is Wilmington Trust Company. Second: - The location of its principal office in the State of Delaware is at Rodney Square North, in the City of Wilmington, County of New Castle; the name of its resident agent is Wilmington Trust Company whose address is Rodney Square North, in said City. In addition to such principal office, the said corporation maintains and operates branch offices in the City of Newark, New Castle County, Delaware, the Town of Newport, New Castle County, Delaware, at Claymont, New Castle County, Delaware, at Greenville, New Castle County Delaware, and at Milford Cross Roads, New Castle County, Delaware, and shall be empowered to open, maintain and operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in the City of Wilmington, New Castle County, Delaware, and such other branch offices or places of business as may be authorized from time to time by the agency or agencies of the government of the State of Delaware empowered to confer such authority. Third: - (a) The nature of the business and the objects and purposes proposed to be transacted, promoted or carried on by this Corporation are to do any or all of the things herein mentioned as fully and to the same extent as natural persons might or could do and in any part of the world, viz.: (1) To sue and be sued, complain and defend in any Court of law or equity and to make and use a common seal, and alter the seal at pleasure, to hold, purchase, convey, mortgage or otherwise deal in real and personal estate and property, and to appoint such officers and agents as the business of the Corporation shall require, to make by-laws not inconsistent with the Constitution or laws of the United States or of this State, to discount bills, notes or other evidences of debt, to receive deposits of money, or securities for money, to buy gold and silver bullion and foreign coins, to buy and sell bills of exchange, and generally to use, exercise and enjoy all the powers, rights, privileges and franchises incident to a corporation which are proper or necessary for the transaction of the business of the Corporation hereby created. (2) To insure titles to real and personal property, or any estate or interests therein, and to guarantee the holder of such property, real or personal, against any claim or claims, adverse to his interest therein, and to prepare and give certificates of title for any lands or premises in the State of Delaware, or elsewhere. (3) To act as factor, agent, broker or attorney in the receipt, collection, custody, investment and management of funds, and the purchase, sale, management and disposal of property of all descriptions, and to prepare and execute all papers which may be necessary or proper in such business. (4) To prepare and draw agreements, contracts, deeds, leases, conveyances, mortgages, bonds and legal papers of every description, and to carry on the business of conveyancing in all its branches. (5) To receive upon deposit for safekeeping money, jewelry, plate, deeds, bonds and any and all other personal property of every sort and kind, from executors, administrators, guardians, public officers, courts, receivers, assignees, trustees, and from all fiduciaries, and from all other persons and individuals, and from all corporations whether state, municipal, corporate or private, and to rent boxes, safes, vaults and other receptacles for such property. (6) To act as agent or otherwise for the purpose of registering, issuing, certificating, countersigning, transferring or underwriting the stock, bonds or other obligations of any corporation, association, state or municipality, and may receive and manage any sinking fund therefor on such terms as may be agreed upon between the two parties, and in like manner may act as Treasurer of any corporation or municipality. (7) To act as Trustee under any deed of trust, mortgage, bond or other instrument issued by any state, municipality, body politic, corporation, association or person, either alone or in conjunction with any other person or persons, corporation or corporations. 2 (8) To guarantee the validity, performance or effect of any contract or agreement, and the fidelity of persons holding places of responsibility or trust; to become surety for any person, or persons, for the faithful performance of any trust, office, duty, contract or agreement, either by itself or in conjunction with any other person, or persons, corporation, or corporations, or in like manner become surety upon any bond, recognizance, obligation, judgment, suit, order, or decree to be entered in any court of record within the State of Delaware or elsewhere, or which may now or hereafter be required by any law, judge, officer or court in the State of Delaware or elsewhere. (9) To act by any and every method of appointment as trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity in the receiving, holding, managing, and disposing of any and all estates and property, real, personal or mixed, and to be appointed as such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian or bailee by any persons, corporations, court, officer, or authority, in the State of Delaware or elsewhere; and whenever this Corporation is so appointed by any person, corporation, court, officer or authority such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity, it shall not be required to give bond with surety, but its capital stock shall be taken and held as security for the performance of the duties devolving upon it by such appointment. (10) And for its care, management and trouble, and the exercise of any of its powers hereby given, or for the performance of any of the duties which it may undertake or be called upon to perform, or for the assumption of any responsibility the said Corporation may be entitled to receive a proper compensation. (11) To purchase, receive, hold and own bonds, mortgages, debentures, shares of capital stock, and other securities, obligations, contracts and evidences of indebtedness, of any private, public or municipal corporation within and without the State of Delaware, or of the Government of the United States, or of any state, territory, colony, or possession thereof, or of any foreign government or country; to receive, collect, receipt for, and dispose of interest, dividends and income upon and from any of the bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property held and owned by it, and to exercise in respect of all such bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property, any and all the rights, powers and privileges of individual 3 owners thereof, including the right to vote thereon; to invest and deal in and with any of the moneys of the Corporation upon such securities and in such manner as it may think fit and proper, and from time to time to vary or realize such investments; to issue bonds and secure the same by pledges or deeds of trust or mortgages of or upon the whole or any part of the property held or owned by the Corporation, and to sell and pledge such bonds, as and when the Board of Directors shall determine, and in the promotion of its said corporate business of investment and to the extent authorized by law, to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey real and personal property of any name and nature and any estate or interest therein. (b) In furtherance of, and not in limitation, of the powers conferred by the laws of the State of Delaware, it is hereby expressly provided that the said Corporation shall also have the following powers: (1) To do any or all of the things herein set forth, to the same extent as natural persons might or could do, and in any part of the world. (2) To acquire the good will, rights, property and franchises and to undertake the whole or any part of the assets and liabilities of any person, firm, association or corporation, and to pay for the same in cash, stock of this Corporation, bonds or otherwise; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business. (3) To take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell, exchange, transfer, or in any manner whatever dispose of property, real, personal or mixed, wherever situated. (4) To enter into, make, perform and carry out contracts of every kind with any person, firm, association or corporation, and, without limit as to amount, to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or transferable instruments. (5) To have one or more offices, to carry on all or any of its operations and businesses, without restriction to the same extent as natural persons might or could do, to purchase or otherwise acquire, to hold, own, to mortgage, sell, convey or otherwise dispose of, real and personal property, of every class and description, in any State, District, Territory or Colony of the United States, and in any foreign country or place. 4 (6) It is the intention that the objects, purposes and powers specified and clauses contained in this paragraph shall (except where otherwise expressed in said paragraph) be nowise limited or restricted by reference to or inference from the terms of any other clause of this or any other paragraph in this charter, but that the objects, purposes and powers specified in each of the clauses of this paragraph shall be regarded as independent objects, purposes and powers. Fourth: - (a) The total number of shares of all classes of stock which the Corporation shall have authority to issue is forty-one million (41,000,000) shares, consisting of: (1) One million (1,000,000) shares of Preferred stock, par value $10.00 per share (hereinafter referred to as "Preferred Stock"); and (2) Forty million (40,000,000) shares of Common Stock, par value $1.00 per share (hereinafter referred to as "Common Stock"). (b) Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends, if any, thereon shall be cumulative, if made cumulative. The voting powers and the preferences and relative, participating, optional and other special rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding; and, subject to the provisions of subparagraph 1 of Paragraph (c) of this Article Fourth, the Board of Directors of the Corporation is hereby expressly granted authority to fix by resolution or resolutions adopted prior to the issuance of any shares of a particular series of Preferred Stock, the voting powers and the designations, preferences and relative, optional and other special rights, and the qualifications, limitations and restrictions of such series, including, but without limiting the generality of the foregoing, the following: (1) The distinctive designation of, and the number of shares of Preferred Stock which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors; (2) The rate and times at which, and the terms and conditions on which, dividends, if any, on Preferred Stock of such series shall be paid, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes, or series of the same or other class of 5 stock and whether such dividends shall be cumulative or non-cumulative; (3) The right, if any, of the holders of Preferred Stock of such series to convert the same into or exchange the same for, shares of any other class or classes or of any series of the same or any other class or classes of stock of the Corporation and the terms and conditions of such conversion or exchange; (4) Whether or not Preferred Stock of such series shall be subject to redemption, and the redemption price or prices and the time or times at which, and the terms and conditions on which, Preferred Stock of such series may be redeemed. (5) The rights, if any, of the holders of Preferred Stock of such series upon the voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding-up, of the Corporation. (6) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock of such series; and (7) The voting powers, if any, of the holders of such series of Preferred Stock which may, without limiting the generality of the foregoing include the right, voting as a series or by itself or together with other series of Preferred Stock or all series of Preferred Stock as a class, to elect one or more directors of the Corporation if there shall have been a default in the payment of dividends on any one or more series of Preferred Stock or under such circumstances and on such conditions as the Board of Directors may determine. (c) (1) After the requirements with respect to preferential dividends on the Preferred Stock (fixed in accordance with the provisions of section (b) of this Article Fourth), if any, shall have been met and after the Corporation shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of section (b) of this Article Fourth), and subject further to any conditions which may be fixed in accordance with the provisions of section (b) of this Article Fourth, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors. (2) After distribution in full of the preferential amount, if any, (fixed in accordance with the provisions of section (b) of this Article Fourth), to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up, of the Corporation, the holders of the Common Stock shall be entitled to 6 receive all of the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them respectively. (3) Except as may otherwise be required by law or by the provisions of such resolution or resolutions as may be adopted by the Board of Directors pursuant to section (b) of this Article Fourth, each holder of Common Stock shall have one vote in respect of each share of Common Stock held on all matters voted upon by the stockholders. (d) No holder of any of the shares of any class or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued stock of any class or series or any additional shares of any class or series to be issued by reason of any increase of the authorized capital stock of the Corporation of any class or series, or bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for stock of the Corporation of any class or series, or carrying any right to purchase stock of any class or series, but any such unissued stock, additional authorized issue of shares of any class or series of stock or securities convertible into or exchangeable for stock, or carrying any right to purchase stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, corporations or associations, whether such holders or others, and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its sole discretion. (e) The relative powers, preferences and rights of each series of Preferred Stock in relation to the relative powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in section (b) of this Article Fourth and the consent, by class or series vote or otherwise, of the holders of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether or not the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in the resolution or resolutions as to any series of Preferred Stock adopted pursuant to section (b) of this Article Fourth that the consent of the holders of a majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock. 7 (f) Subject to the provisions of section (e), shares of any series of Preferred Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors. (g) Shares of Common Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors. (h) The authorized amount of shares of Common Stock and of Preferred Stock may, without a class or series vote, be increased or decreased from time to time by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon. Fifth: - (a) The business and affairs of the Corporation shall be conducted and managed by a Board of Directors. The number of directors constituting the entire Board shall be not less than five nor more than twenty-five as fixed from time to time by vote of a majority of the whole Board, provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the whole Board shall be twenty-four until otherwise fixed by a majority of the whole Board. (b) The Board of Directors shall be divided into three classes, as nearly equal in number as the then total number of directors constituting the whole Board permits, with the term of office of one class expiring each year. At the annual meeting of stockholders in 1982, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next annual election of directors. At such election, the stockholders shall elect a successor to such director to hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. (c) Notwithstanding any other provisions of this Charter or Act of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, this Charter or Act of Incorporation or the ByLaws of the Corporation), any director or the entire Board of Directors of the 8 Corporation may be removed at any time without cause, but only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the stockholders called for that purpose. (d) Nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors. Such nominations shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the Corporation not less than 14 days nor more than 50 days prior to any meeting of the stockholders called for the election of directors; provided, however, that if less than 21 days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the seventh day following the day on which notice of the meeting was mailed to stockholders. Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman on behalf of the Board. (e) Each notice under subsection (d) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of such nominee and (iii) the number of shares of stock of the Corporation which are beneficially owned by each such nominee. (f) The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. (g) No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. Sixth: - The Directors shall choose such officers, agent and servants as may be provided in the By-Laws as they may from time to time find necessary or proper. Seventh: - The Corporation hereby created is hereby given the same powers, rights and privileges as may be conferred upon corporations organized under the Act entitled "An Act Providing a General Corporation Law", approved March 10, 1899, as from time to time amended. Eighth: - This Act shall be deemed and taken to be a private Act. 9 Ninth: - This Corporation is to have perpetual existence. Tenth: - The Board of Directors, by resolution passed by a majority of the whole Board, may designate any of their number to constitute an Executive Committee, which Committee, to the extent provided in said resolution, or in the By-Laws of the Company, shall have and may exercise all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Eleventh: - The private property of the stockholders shall not be liable for the payment of corporate debts to any extent whatever. Twelfth: - The Corporation may transact business in any part of the world. Thirteenth: - The Board of Directors of the Corporation is expressly authorized to make, alter or repeal the By-Laws of the Corporation by a vote of the majority of the entire Board. The stockholders may make, alter or repeal any By-Law whether or not adopted by them, provided however, that any such additional By-Laws, alterations or repeal may be adopted only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class). Fourteenth: - Meetings of the Directors may be held outside of the State of Delaware at such places as may be from time to time designated by the Board, and the Directors may keep the books of the Company outside of the State of Delaware at such places as may be from time to time designated by them. Fifteenth: - (a) In addition to any affirmative vote required by law, and except as otherwise expressly provided in sections (b) and (c) of this Article Fifteenth: (A) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with or into (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder), which, after such merger or consolidation, would be an Affiliate (as hereinafter defined) of an Interested Stockholder, or (B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate fair market value of $1,000,000 or more, or 10 (C) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of related transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate fair market value of $1,000,000 or more, or (D) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation, or (E) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder, or any Affiliate of any Interested Stockholder, shall require the affirmative vote of the holders of at least two-thirds of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purpose of this Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise. (2) The term "business combination" as used in this Article Fifteenth shall mean any transaction which is referred to any one or more of clauses (A) through (E) of paragraph 1 of the section (a). (b) The provisions of section (a) of this Article Fifteenth shall not be applicable to any particular business combination and such business combination shall require only such affirmative vote as is required by law and any other provisions of the Charter or Act of Incorporation of By-Laws if such business combination has been approved by a majority of the whole Board. (c) For the purposes of this Article Fifteenth: (1) A "person" shall mean any individual firm, corporation or other entity. (2) "Interested Stockholder" shall mean, in respect of any business combination, any person (other than the Corporation or any Subsidiary) who or which as of the record date for the determination of stockholders entitled to notice of and to vote onsuch business combination, or immediately prior to the consummation of any such transaction: (A) is the beneficial owner, directly or indirectly, of more than 10% of the 11 Voting Shares, or (B) is an Affiliate of the Corporation and at any time within two years prior thereto was the beneficial owner, directly or indirectly, of not less than 10% of the then outstanding voting Shares, or (C) is an assignee of or has otherwise succeeded in any share of capital stock of the Corporation which were at any time within two years prior thereto beneficially owned by any Interested Stockholder, and such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (3) A person shall be the "beneficial owner" of any Voting Shares: (A) which such person or any of its Affiliates and Associates (as hereafter defined) beneficially own, directly or indirectly, or (B) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding, or (C) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation. (4) The outstanding Voting Shares shall include shares deemed owned through application of paragraph (3) above but shall not include any other Voting Shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options or otherwise. (5) "Affiliate" and "Associate" shall have the respective meanings given those terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on December 31, 1981. 12 (6) "Subsidiary" shall mean any corporation of which a majority of any class of equity security (as defined in Rule 3a11-1 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect in December 31, 1981) is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Investment Stockholder set forth in paragraph (2) of this section (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. (d) majority of the directors shall have the power and duty to determine for the purposes of this Article Fifteenth on the basis of information known to them, (1) the number of Voting Shares beneficially owned by any person (2) whether a person is an Affiliate or Associate of another, (3) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in paragraph (3) of section (c), or (4) whether the assets subject to any business combination or the consideration received for the issuance or transfer of securities by the Corporation, or any Subsidiary has an aggregate fair market value of $1,00,000 or more. (e) Nothing contained in this Article Fifteenth shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. Sixteenth: Notwithstanding any other provision of this Charter or Act of Incorporation or the By-Laws of the Corporation (and in addition to any other vote that may be required by law, this Charter or Act of Incorporation by the By-Laws), the affirmative vote of the holders of at least two-thirds of the outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter or Act of Incorporation. Seventeenth: (a) a Director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Laws as the same exists or may hereafter be amended. (b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a Director of the Corporation existing hereunder with respect to any act or omission occurring prior to the time of such repeal or modification." 13 EXHIBIT B BY-LAWS WILMINGTON TRUST COMPANY WILMINGTON, DELAWARE As existing on February 21, 1991 BY-LAWS OF WILMINGTON TRUST COMPANY ARTICLE I Stockholders' Meetings Section 1. The Annual Meeting of Stockholders shall be held on the third Thursday in April each year at the principal office at the Company or at such other date, time, or place as may be designated by resolution by the Board of Directors. Section 2. Special meetings of all stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President. Section 3. Notice of all meetings of the stockholders shall be given by mailing to each stockholder at least ten (10 days before said meeting, at his last known address, a written or printed notice fixing the time and place of such meeting. Section 4. A majority in the amount of the capital stock of the Company issued and outstanding on the record date, as herein determined, shall constitute a quorum at all meetings of stockholders for the transaction of any business, but the holders of a small number of shares may adjourn, from time to time, without further notice, until a quorum is secured. At each annual or special meeting of stockholders, each stockholder shall be entitled to one vote, either in person or by proxy, for each shares of stock registered in the stockholder's name on the books of the Company on the record date for any such meeting as determined herein. ARTICLE II Directors Section 1. The number and classification of the Board of Directors shall be as set forth in the Charter of the Bank. Section 2. No person who has attained the age of seventy-two (72) years shall be nominated for election to the Board of Directors of the Company, provided, however, that this limitation shall not apply to any person who was serving as director of the Company on September 16, 1971. Section 3. The class of Directors so elected shall hold office for three years or until their successors are elected and qualified. Section 4. The affairs and business of the Company shall be managed and conducted by the Board of Directors. Section 5. Regular meetings of the Board of Directors shall be held on the third Thursday of each month at the principal office of the Company, or at such other place and time as may be designated by the Board of Directors, the Chairman of the Board, or the President. Section 6. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors or by the President, and shall be called upon the written request of a majority of the directors. Section 7. A majority of the directors elected and qualified shall be necessary to constitute a quorum for the transaction of business at any meeting of the Board of Directors. Section 8. Written notice shall be sent by mail to each director of any special meeting of the Board of Directors, and of any change in the time or place of any regular meeting, stating the time and place of such meeting, which shall be mailed not less than two days before the time of holding such meeting. Section 9. In the event of the death, resignation, removal, inability to act, or disqualification of any director, the Board of Directors, although less than a quorum, shall have the right to elect the successor who shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director's successor shall have been duly elected and qualified. Section 10. The Board of Directors at its first meeting after its election by the stockholders shall appoint an Executive Committee, a Trust Committee, an Audit Committee and a Compensation Committee, and shall elect from its own members a Chairman of the Board of Directors and a President who may be the same person. The Board of Directors shall also elect at such meeting a Secretary and a Treasurer, who may be the same person, may appoint at any time such other committees and elect or appoint such other officers as it may deem advisable. The Board of Directors may also elect at such meeting one or more Associate Directors. Section 11. The Board of Directors may at any time remove, with or without cause, any member of any Committee appointed by it or any associate director or officer elected by it and may appoint or elect his successor. Section 12. The Board of Directors may designate an officer to be in charge of such of the departments or division of the Company as it may deem advisable. ARTICLE III Committees Section I. Executive Committee (A) The Executive Committee shall be composed of not more than nine members who shall be selected by the Board of Directors from its own members and who 2 shall hold office during the pleasure of the Board. (B) The Executive Committee shall have all the powers of the Board of Directors when it is not in session to transact all business for and in behalf of the Company that may be brought before it. (C) The Executive Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a week in each week the Board is not regularly scheduled to meet. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Executive Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Executive Committee shall be kept and submitted to the Board of Directors at its next meeting. (E) The Executive Committee shall advise and superintend all investments that may be made of the funds of the Company, and shall direct the disposal of the same, in accordance with such rules and regulations as the Board of Directors from time to time make. (F) In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Company by its directors and officers as contemplated by these By-Laws any two available members of the Executive Committee as constituted immediately prior to such disaster shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Company in accordance with the provisions of Article III of these By-Laws; and if less than three members of the Trust Committee is constituted immediately prior to such disaster shall be available for the transaction of its business, such Executive Committee shall also be empowered to exercise all of the powers reserved to the Trust Committee under Article III Section 2 hereof. In the event of the unavailability, at such time, of a minimum of two members of such Executive Committee, any three available directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Company in accordance with the foregoing provisions of this Section. This By-Law shall be subject to implementation by Resolutions of the Board of Directors presently existing or hereafter passed from time to time for that purpose, and any provisions of these By- Laws(other than this Section) and any resolutions which are contrary to the provisions of this Section or to the provisions of any such implementary Resolutions shall be suspended during such a disaster period until it shall be determined by any interim Executive Committee acting under this section that it shall be to the advantage of the Company to resume the conduct and management of its affairs and business under all of the other provisions of these By-Laws. 3 Section 2. Trust Committee (A) The Trust Committee shall be composed of not more than thirteen members who shall be selected by the Board of Directors, a majority of whom shall be members of the Board of Directors and who shall hold office during the pleasure of the Board. (B) The Trust Committee shall have general supervision over the Trust Department and the investment of trust funds, in all matters, however, being subject to the approval of the Board of Directors. (C) The Trust Committee shall meet at the principal office of the Company or elsewhere in its discretion at least once a month. A majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Trust Committee may be held at any time when a quorum is present. (D) Minutes of each meeting of the Trust Committee shall be kept and promptly submitted to the Board of Directors. (E) The Trust Committee shall have the power to appoint Committees and/or designate officers or employees of the Company to whom supervision over the investment of trust funds may be delegated when the Trust Committee is not in session. Section 3. Audit Committee (A) The Audit Committee shall be composed of five members who shall be selected by the Board of Directors from its own members, none of whom shall be an officer of the Company, and shall hold office at the pleasure of the Board. (B) The Audit Committee shall have general supervision over the Audit Division in all matters however subject to the approval of the Board of Directors; it shall consider all matters brought to its attention by the officer in charge of the Audit Division, review all reports of examination of the Company made by any governmental agency or such independent auditor employed for that purpose, and make such recommendations to the Board of Directors with respect thereto or with respect to any other matters pertaining to auditing the Company as it shall deem desirable. (C) The Audit Committee shall meet whenever and wherever the majority of its members shall deem it to be proper for the transaction of its business, and a majority of its Committee shall constitute a quorum. Section 4. Compensation Committee (A) The Compensation Committee shall be composed of not more than 4 five (5) members who shall be selected by the Board of Directors from its own members who are not officers of the Company and who shall hold office during the pleasure of the Board. (B) The Compensation Committee shall in general advise upon all matters of policy concerning the Company brought to its attention by the management and from time to time review the management of the Company, major organizational matters, including salaries and employee benefits and specifically shall administer the Executive Incentive Compensation Plan. (C) Meetings of the Compensation Committee may be called at any time by the Chairman of the Compensation Committee, the Chairman of the Board of Directors, or the President of the Company. Section 5. Associate Directors (A) Any person who has served as a director may be elected by the Board of Directors as an associate director, to serve during the pleasure of the Board. (B) An associate director shall be entitled to attend all directors meetings and participate in the discussion of all matters brought to the Board, with the exception that he would have no right to vote. An associate director will be eligible for appointment to Committees of the Company, with the exception of the Executive Committee, Audit Committee and Compensation Committee, which must be comprised solely of active directors. Section 6. Absence or Disqualification of Any Member of a Committee (A) In the absence or disqualification of any member of any Committee created under Article III of the By-Laws of this Company, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absence or disqualified member. ARTICLE IV Officers Section 1. The Chairman of the Board of Directors shall preside at all meetings of the Board and shall have such further authority and powers and shall perform such duties as the Board of Directors may from time to time confer and direct. He shall also exercise such powers and perform such duties as may from time to time be agreed upon between himself and the President of the Company. Section 2. The President shall have the powers and duties pertaining to the officeof the President conferred or imposed upon him by statute or assigned to him by the Board of 5 Directors in the absence of the Chairman of the Board the President shall have the powers and duties of the Chairman of the Board. Section 3. The Chairman of the Board of Directors or the President as designated by the Board of Directors, shall carry into effect all legal directions of the Executive Committee and of the Board of Directors, and shall at all times exercise general supervision over the interest, affairs and operations of the Company and perform all duties incident to his office. Section 4. There may be one or more Vice Presidents, however denominated by the Board of Directors, who may at any time perform all the duties of the Chairman of the Board of Directors and/or the President and such other powers and duties as may from time to time be assigned to them by the Board of Directors, the Executive Committee, the Chairman of the Board or the President and by the officer in charge of the department or division to which they are assigned. Section 5. The Secretary shall attend to the giving of notice of meetings of the stockholders and the Board of Directors, as well as the Committees thereof, to the keeping of accurate minutes of all such meetings and to recording the same in the minute books of the Company. In addition to the other notice requirements of these By-Laws and as may be practicable under the circumstances, all such notices shall be in writing and mailed well in advance of the scheduled date of any other meeting. He shall have custody of the corporate seal and shall affix the same to any documents requiring such corporate seal and to attest the same. Section 6. The Treasurer shall have general supervision over all assets and liabilities of the Company. He shall be custodian of and responsible for all monies, funds and valuables of the Company and for the keeping of proper records of the evidence of property or indebtedness and of all the transactions of the Company. He shall have general supervision of the expenditures of the Company and shall report to the Board of Directors at each regular meeting of the condition of the Company, and perform such other duties as may be assigned to him from time to time by the Board of Directors of the Executive Committee. Section 7. There may be a Controller who shall exercise general supervision over the internal operations of the Company, including accounting, and shall render to the Board of Directors at appropriate times a report relating to the general condition and internal operations of the Company. There may be one or more subordinate accounting or controller officers however denominated, who may perform the duties of the Controller and such duties as may be prescribed by the Controller. Section 8. The officer designated by the Board of Directors to be in charge of the Audit Division of the Company with such title as the Board of Directors shall prescribe, shall 6 report to and be directly responsible only to the Board of Directors. There shall be an Auditor and there may be one or more Audit Officers, however denominated, who may perform all the duties of the Auditor and such duties as may be prescribed by the officer in charge of the Audit Division. Section 9. There may be one or more officers, subordinate in rank to all Vice Presidents with such functional titles as shall be determined from time to time by the Board of Directors, who shall ex officio hold the office Assistant Secretary of this Company and who may perform such duties as may be prescribed by the officer in charge of the department or division to whom they are assigned. Section 10. The powers and duties of all other officers of the Company shall be those usually pertaining to their respective offices, subject to the direction of the Board of Directors, the Executive Committee, Chairman of the Board of Directors or the President and the officer in charge of the department or division to which they are assigned. ARTICLE V Stock and Stock Certificates Section 1. Shares of stock shall be transferrable on the books of the Company and a transfer book shall be kept in which all transfers of stock shall be recorded. Section 2. Certificate of stock shall bear the signature of the President or any Vice President, however denominated by the Board of Directors and countersigned by the Secretary or Treasurer or an Assistant Secretary, and the seal of the corporation shall be engraved thereon. Each certificate shall recite that the stock represented thereby is transferrable only upon the books of the Company by the holder thereof or his attorney, upon surrender of the certificate properly endorsed. Any certificate of stock surrendered to the Company shall be cancelled at the time of transfer, and before a new certificate or certificates shall be issued in lieu thereof. Duplicate certificates of stock shall be issued only upon giving such security as may be satisfactory to the Board of Directors or the Executive Committee. Section 3. The Board of Directors of the Company is authorized to fix in advance a record date for the determination of the stockholders entitled to notice of, and to vote at, any meeting of stockholders and any adjournment thereof, or entitled to receive payment of any dividend, or to any allotment or rights, or to exercise any rights in respect of any change, conversion or exchange of capital stock, or in connection with obtaining the consent of stockholders for any purpose, which record date shall not be more than 60 nor less than 10 days proceeding the date of any meeting of stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent. 7 ARTICLE VI Seal Section 1. The corporate seal of the Company shall be in the following form: Between two concentric circles the words "Wilmington Trust Company" within the inner circle the words "Wilmington, Delaware." ARTICLE VII Fiscal Year Section 1. The fiscal year of the Company shall be the calendar year. ARTICLE VIII Execution of Instruments of the Company Section 1. The Chairman of the Board, the President or any Vice President, however denominated by the Board of Directors, shall have full power and authority to enter into, make, sign, execute, acknowledge and/or deliver and the Secretary or any Assistant Secretary shall have full power and authority to attest and affix the corporate seal of the Company to any and all deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes, mortgages and all other instruments incident to the business of this Company or in acting as executor, administrator, guardian, trustee, agent or in any other fiduciary or representative capacity by any and every method of appointment or by whatever person, corporation, court officer or authority in the State of Delaware, or elsewhere, without any specific authority, ratification, approval or confirmation by the Board of Directors or the Executive Committee, and any and all such instruments shall have the same force and validity as although expressly authorized by the Board of Directors and/or the Executive Committee. ARTICLE IX Compensation of Directors and Members of Committees Section 1. Directors and associate directors of the Company, other than salaried officers of the Company, shall be paid such reasonable honoraria or fees for attending meetings of the Board of Directors as the Board of Directors may from time to time determine. Directors and associate directors who serve as members of committees, other than salaried employees of the Company, shall be paid such reasonable honoraria or fees for services as members of committees as the Board of Directors shall from time to time determine and directors and associate directors may be employed by the Company for such 8 special services as the Board of Directors may from time to time determine and shall be paid for such special services so performed reasonable compensation as may be determined by the Board of Directors. ARTICLE X Indemnification Section 1. (A) The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The Corporation shall indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation. (B) The Corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a Director officer in his capacity as a Director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Director or officer to repay all amounts advanced if it should be ultimately determined that the Director or officer is not entitled to be indemnified under this Article or otherwise. (C) If a claim for indemnification or payment of expenses, under this Article X is not paid in full within ninety days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification of payment of expenses under applicable law. (D) The rights conferred on any person by this Article X shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter or Act of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested Directors or otherwise. (E) Any repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. 9 ARTICLE XI Amendments to the By-Laws Section 1. These By-Laws may be altered, amended or repealed, in whole or in part, and any new By-Law or By-Laws adopted at any regular or special meeting of the Board of Directors by a vote of the majority of all the members of the Board of Directors then in office. 10 EXHIBIT C Section 321(b) Consent Pursuant to Section 321(b) of the Trust Indenture Act of 1939, Wilmington Trust Company hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities Exchange Commission upon requests therefor. WILMINGTON TRUST COMPANY Dated: August 12, 1996 By: /s/ Emmet R. Harmon ------------------- Name: Emmet R. Harmon Title: Vice President EXHIBIT D NOTICE This form is intended to assist state nonmember banks and savings banks with state publication requirements. It has not been approved by any state banking authorities. Refer to your appropriate state banking authorities for your state publication requirements. R E P O R T O F C O N D I T I O N Consolidating domestic subsidiaries of the WILMINGTON TRUST COMPANY of WILMINGTON - ----------------------------------------------------------- -------------- Name of Bank City in the State of DELAWARE , at the close of business on March 31, 1996. --------
ASSETS Thousands of dollars Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coins.............................................198,158 Interest-bearing balances ..................................................................... 0 Held-to-maturity securities ................................................................................536,638 Available-for-sale securities...............................................................................862,050 Federal funds sold...........................................................................................82,000 Securities purchased under agreements to resell .............................................................25,000 Loans and lease financing receivables: Loans and leases, net of unearned income.................. 3,404,372 LESS: Allowance for loan and lease losses ............... 48,153 LESS: Allocated transfer risk reserve ................... 0 Loans and leases, net of unearned income, allowance, and reserve..............................3,356,219 Assets held in trading accounts...................................................................................0 Premises and fixed assets (including capitalized leases).....................................................76,915 Other real estate owned......................................................................................16,314 Investments in unconsolidated subsidiaries and associated companies ............................................146 Customers' liability to this bank on acceptances outstanding......................................................0 Intangible assets.............................................................................................4,403 Other assets................................................................................................107,240 Total assets..............................................................................................5,265,083 CONTINUED ON NEXT PAGE LIABILITIES Deposits: In domestic offices.......................................................................................3,450,823 Noninterest-bearing ............... 689,843 Interest-bearing................... 2,760,980 Federal funds purchased..................................................................................... 99,885 Securities sold under agreements to repurchase..............................................................198,506 Demand notes issued to the U.S. Treasury.....................................................................38,856 Trading liabilities...............................................................................................0 Other borrowed money:......................................................................................./////// With original maturity of one year or less......................................................930,611 With original maturity of more than one year.....................................................28,000 Mortgage indebtedness and obligations under capitalized leases....................................................0 Bank's liability on acceptances executed and outstanding..........................................................0 Subordinated notes and debentures.................................................................................0 Other liabilities.......................................................................................... 100,832 Total liabilities.........................................................................................4,847,513 Limited-life preferred stock and related surplus..................................................................0 EQUITY CAPITAL Perpetual preferred stock and related surplus.....................................................................0 Common Stock....................................................................................................500 Surplus......................................................................................................62,118 Undivided profits and capital reserves......................................................................354,791 Net unrealized holding gains (losses) on available-for-sale securities..........................................161 Total equity capital........................................................................................417,570 Total liabilities, limited-life preferred stock, and equity capital.......................................5,265,083
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