-----------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
KCPL FINANCING I
Dated as of April 15, 1997
-----------------------------------
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS............................................1
SECTION 1.1. DEFINITIONS.................................................1
ARTICLE II
TRUST INDENTURE ACT......................................................11
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION...........................11
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.............................11
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE............................12
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE.......................12
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.................................................12
SECTION 2.6. EVENTS OF DEFAULT; WAIVER..................................12
SECTION 2.7. EVENTS OF DEFAULT; NOTICE..................................14
ARTICLE III
ORGANIZATION.............................................................14
SECTION 3.1. NAME.......................................................14
SECTION 3.2. OFFICE.....................................................15
SECTION 3.3. PURPOSE....................................................15
SECTION 3.4. AUTHORITY..................................................15
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST.............................15
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES..................15
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND
THE TRUSTEES..............................................19
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE..................19
SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF
THE PROPERTY TRUSTEE......................................22
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE........................24
SECTION 3.11. DELAWARE TRUSTEE..........................................26
SECTION 3.12. EXECUTION OF DOCUMENTS....................................26
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF SECURITIES........................................26
SECTION 3.14. DURATION OF TRUST.........................................26
SECTION 3.15. MERGERS...................................................26
ARTICLE IV
SPONSOR..................................................................28
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES....................28
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR............................28
-i-
ARTICLE V
TRUSTEES.................................................................29
SECTION 5.1. NUMBER OF TRUSTEES.........................................29
SECTION 5.2. DELAWARE TRUSTEE...........................................30
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY..............................30
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY................................31
SECTION 5.5. INITIAL TRUSTEES...........................................31
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES..................................................31
SECTION 5.7. VACANCIES AMONG TRUSTEES...................................33
SECTION 5.8. EFFECT OF VACANCIES........................................33
SECTION 5.9. MEETINGS...................................................33
SECTION 5.10. DELEGATION OF POWER.......................................34
ARTICLE VI
DISTRIBUTIONS............................................................34
SECTION 6.1. DISTRIBUTIONS..............................................34
ARTICLE VIII
SSUANCE OF SECURITIES....................................................35
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES....................35
ARTICLE VIII
TERMINATION OF TRUST.....................................................36
SECTION 8.1. TERMINATION OF TRUST.......................................36
ARTICLE IX
TRANSFER OF INTERESTS....................................................37
SECTION 9.1. TRANSFER OF SECURITIES.....................................37
SECTION 9.2. TRANSFER OF CERTIFICATES...................................37
SECTION 9.3. DEEMED SECURITY HOLDERS....................................38
SECTION 9.4. BOOK ENTRY INTERESTS.......................................38
SECTION 9.5. NOTICES TO CLEARING AGENCY.................................39
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY...................39
SECTION 9.7. DEFINITIVE PREFERRED SECURITY
CERTIFICATES..............................................39
SECTION 9.8. MUTILATED, DESTROYED, LOST OR
STOLEN CERTIFICATES.......................................40
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS.....40
SECTION 10.1. LIABILITY.................................................40
SECTION 10.2. EXCULPATION...............................................41
SECTION 10.3. FIDUCIARY DUTY............................................41
-ii-
SECTION 10.4. INDEMNIFICATION...........................................42
SECTION 10.5. OUTSIDE BUSINESSES........................................43
ARTICLE XI
ACCOUNTING...............................................................44
SECTION 11.1. FISCAL YEAR...............................................44
SECTION 11.2. CERTAIN ACCOUNTING MATTERS................................44
SECTION 11.3. BANKING...................................................44
SECTION 11.4. WITHHOLDING...............................................45
ARTICLE XII
AMENDMENTS AND MEETINGS..................................................45
SECTION 12.1. AMENDMENTS................................................45
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT............................47
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
TRUSTEE..................................................................49
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF
PROPERTY TRUSTEE........................................49
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF
DELAWARE TRUSTEE........................................50
ARTICLE XIV
SUCCESSOR CORPORATION....................................................50
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC..............................50
SECTION 14.2. SUCCESSOR CORPORATION SUBSTITUTED.........................51
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO
PROPERTY TRUSTEE........................................51
ARTICLE XV
MISCELLANEOUS............................................................51
SECTION 15.1. NOTICES...................................................51
SECTION 15.2. GOVERNING LAW.............................................52
SECTION 15.3. INTENTION OF THE PARTIES..................................53
SECTION 15.4. HEADINGS..................................................53
SECTION 15.5. SUCCESSORS AND ASSIGNS....................................53
SECTION 15.6. PARTIAL ENFORCEABILITY....................................53
SECTION 15.7. COUNTERPARTS..............................................53
-iii-
CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
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(f) Inapplicable
315(a) 3.9(b)
315(b) 2.8
315(c) 3.9(a)
315(d) 3.9(a)
316(a) Exhibit A, 2.6
316(c) 3.6(e)
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
-iv-
EXHIBIT A
TERMS OF SECURITIES
EXHIBIT B
PREFERRED SECURITIES GUARANTEE
EXHIBIT C
PURCHASE AGREEMENT
-v-
AMENDED AND RESTATED DECLARATION OF TRUST
OF
KCPL FINANCING I
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated
and effective as of April 15, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein), and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
W I T N E S S E T H:
WHEREAS, certain of the Trustees and the Sponsor have heretofore
established a trust (the "Trust") under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated December 10, 1996 (the
"Original Declaration") for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Subordinated Debentures of
the Subordinated Debenture Issuer;
WHEREAS, all the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms used in this Declaration
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1. A term defined anywhere in this Declaration has the
same meaning throughout. A term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires.
AFFILIATE:
The term "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
AUTHORIZED OFFICER:
The term "Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
BOOK ENTRY INTEREST:
The term "Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
BUSINESS DAY:
The term "Business Day" means any day other than a day on which
banking institutions in Chicago, Illinois or New York, New York are authorized
or required by law to close.
BUSINESS TRUST ACT:
The term "Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 ET SEQ., as it may be amended from time
to time.
CERTIFICATE:
The term "Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
CLEARING AGENCY:
The term "Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depository for the Preferred Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
CLEARING AGENCY PARTICIPANT:
The term "Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom, from time to time, the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
CLOSING DATE:
The term "Closing Date" means April 15, 1997.
CODE:
The term "Code" means the Internal Revenue Code of 1986.
COMMON SECURITY:
The term "Common Security" has the meaning specified in Section 7.1.
COMMON SECURITY CERTIFICATE:
The term "Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Annex II to Exhibit A.
COVERED PERSON:
The term "Covered Person" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
DEBENTURE ISSUER:
The term "Debenture Issuer" means KCPL, in its capacity as the issuer
of the Subordinated Debentures.
DEBENTURE TRUSTEE:
The term "Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Indenture, until a successor
3
is appointed thereunder and thereafter means such successor trustee.
DELAWARE TRUSTEE:
The term "Delaware Trustee" has the meaning set forth in Section 5.2.
DEFINITIVE PREFERRED SECURITY CERTIFICATES:
The term "Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
DIRECTION:
The term "Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
DISTRIBUTION:
The term "Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
DTC:
The term "DTC" means The Depository Trust Company, the initial
Clearing Agency.
EVENT OF DEFAULT:
The term "Event of Default" in respect of the Securities means an
Indenture Default has occurred and is continuing in respect of the Subordinated
Debentures.
EXCHANGE ACT:
The term "Exchange Act" means the Securities Exchange Act of 1934.
4
GLOBAL CERTIFICATE:
The term "Global Certificate" has the meaning set forth in Section
9.4.
HOLDER:
The term "Holder" means the Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act; provided, however, that in
determining whether Holders of the requisite liquidation amount of Preferred
Securities have voted on any matter provided for in this Declaration, then for
the purpose of such determination only (and not for any other purpose
hereunder), if the Preferred Securities remain in the form of one or more Global
Certificates, the term "Holder" shall mean the holder of the Global Certificate
acting at the direction of the Preferred Security Beneficial Owners.
INDEMNIFIED PERSON:
The term "Indemnified Person" means any Trustee, any Affiliate of any
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the Trust
or its Affiliates.
INDENTURE:
The term "Indenture" means the Indenture dated as of April 1, 1997
between the Debenture Issuer and the Debenture Trustee, and any amendment
thereto and any indenture supplemental thereto pursuant to which the
Subordinated Debentures are to be issued.
INDENTURE DEFAULT:
The term "Indenture Default" means an "Event of Default" as such term
is defined in the Indenture.
INVESTMENT COMPANY:
The term "Investment Company" means an investment company as defined
in the Investment Company Act.
INVESTMENT COMPANY ACT:
The term "Investment Company Act" means the Investment Company Act of
1940.
5
KCPL:
The term "KCPL" means Kansas City Power & Light Company, a Missouri
corporation, or any successor entity in a merger or consolidation.
LEGAL ACTION:
The term "Legal Action" has the meaning set forth in Section 3.6(g).
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Preferred
Securities or outstanding Common Securities voting separately as a class,
representing more than 50% of the aggregate stated liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of such class.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each such officer signing the Certificate
has read the covenant or condition and the definition(s) relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each such officer in rendering the
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
6
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
PAYING AGENT:
The term "Paying Agent" has the meaning specified in Section 3.8(i).
PERSON:
The term "Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint stock company, unincorporated
association or government or any agency or political subdivision thereof, or any
other entity of whatever nature.
PREFERRED SECURITIES GUARANTEE:
The term "Preferred Securities Guarantee" means the Preferred
Securities Guarantee Agreement to be dated as of April 15, 1997 of the Sponsor
in respect of the Preferred Securities in the form of Exhibit B.
PREFERRED SECURITY:
The term "Preferred Security" has the meaning specified in Section
7.1.
PREFERRED SECURITY BENEFICIAL OWNER:
The term "Preferred Security Beneficial Owner" means, with respect to
a Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
PREFERRED SECURITY CERTIFICATE:
The term "Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Annex I to
Exhibit A.
7
PROPERTY TRUSTEE:
The term "Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
PROPERTY TRUSTEE ACCOUNT:
The term "Property Trustee Account" has the meaning set forth in
Section 3.8(c)(i).
QUORUM:
The term "Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
REGULAR TRUSTEE:
The term "Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
RELATED PARTY:
The term "Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
which owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the Property
Trustee, means the chairman of the board of directors, the President, any Vice
President, the Secretary, the Treasurer, any trust officer or, any corporate
trust officer or any other officer or assistant officer of the Property Trustee
customarily performing functions similar to those performed by any of the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
RULE 3a-5:
The term "Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
SECURITIES:
The term "Securities" mean the Common Securities and the Preferred
Securities.
8
SECURITIES ACT:
The term "Securities Act" means the Securities Act of 1933, as
amended.
66-2/3% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "66-2/3% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Preferred
Securities or outstanding Common Securities, voting separately as a class,
representing 66-2/3% of the aggregate stated liquidation amount (including the
stated amount that would be paid on redemption, liquidation or maturity, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of such class.
SPONSOR:
The term "Sponsor" means KCPL, in its capacity as sponsor of the
Trust, and its successor or successors by merger, consolidation or purchase of
all or substantially all of its assets.
SUBORDINATED DEBENTURES:
The term "Subordinated Debentures" means the series of Subordinated
Debentures to be issued by the Debenture Issuer under the Indenture to the
Property Trustee for the benefit of the Trust and the Holders.
SUCCESSOR PROPERTY TRUSTEE:
The term "Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under Section 5.3(a).
10% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "10% in liquidation amount of the Securities" means, except
as provided in the terms of the Preferred Securities or the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred Securities or
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate stated liquidation amount (including the stated amount
9
that would be paid on redemption, liquidation or maturity, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of such class.
TAX EVENT:
The term "Tax Event" means a "Tax Event" as defined in the Indenture.
TREASURY REGULATIONS:
The term "Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury Department, as amended.
TRUSTEE OR TRUSTEES:
The terms "Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939.
UNDERWRITING AGREEMENT:
The term "Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
SECTION 1.2. INTERPRETATION. Each definition in this Declaration
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Declaration as a
10
whole. The headings to the Articles and Sections are for convenience of
reference and shall not affect the meaning or interpretation of this
Declaration. References to Articles, Sections, Annexes and Schedules mean the
Articles, Sections, Annexes and Schedules of this Declaration. The Annexes, if
any, and Schedules are hereby incorporated by reference into and shall be deemed
a part of this Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION. (a) This Declaration
is subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration 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. If and to the extent that any
provision of this Declaration limits, qualifies or conflicts with the duties
imposed by sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
(c) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES. (a) Each of the Sponsor
and the Regular Trustee(s) on behalf of the Trust shall provide the Property
Trustee (i) within fourteen (14) days after each record date for payment of
Distributions a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, PROVIDED that none of the Sponsor or the
Regular Trustees on behalf of the Trust shall 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 Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other time, within thirty (30)
days of receipt by the Trust of a written request for a List of Holders as of a
date no more than fourteen (14) days before such List of Holders is given to the
Property Trustee. The Property Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in its capacity as Paying Agent (if acting in such
capacity) PROVIDED that the Property Trustee may destroy any List
11
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE. Within 60 days after
May 15 of each year, the Property Trustee shall provide to the Holders of the
Preferred Securities such reports, if any, as are required by Section 313 of the
Trust Indenture Act, in the form and in the manner and to the Person or Persons
provided by section 313 of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by section
314 (if any) and the compliance certificate as required by section 314 of the
Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with the conditions precedent,
if any, provided for in this Declaration which 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) may be given in
the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER. (a) 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 in respect of the Preferred Securities and its consequences, PROVIDED
that if the Event of Default:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Debentures (a
"Super-Majority") to be waived under the Indenture, the Event of Default
under this Declaration may only be waived by the vote of the Holders of at
least the proportion in liquidation amount of the Preferred Securities that
the relevant Super Majority represents to the
12
aggregate principal amount of the Subordinated Debentures outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon. Any waiver by the Holders of the Preferred
Securities of an Event of Default with respect to the Preferred Securities shall
also be deemed to constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities for all purposes
of this Declaration without any further act, vote, or consent of the Holders of
the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default in respect of the Common Securities
and its consequences, PROVIDED that if the Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
this Declaration as provided below, the Event of Default under this
Declaration is not waivable; or
(ii) requires the consent or vote of all of the holders of the
Subordinated Debentures to be waived, the Event of Default under this
Declaration may only be waived by the vote of all of the Holders of the
Preferred Securities, PROVIDED that each Holder of Common Securities will
be deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated and until such Events of Default have
been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the Holders of the Preferred
Securities and only the Holders of the Preferred Securities will have the
right to direct the Property Trustee in accordance with the terms of the
Securities. Subject to the foregoing proviso, upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or
13
Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE. (a) The Property 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 Securities, notices of
all defaults with respect to the Securities known to the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults", for the purposes of this Section 2.7(a), is hereby defined as an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); PROVIDED that, except for a default in the payment of the principal of
(or the premium, if any) or the interest on any of the Subordinated Debentures
or in the payment of any sinking fund installment established for the
Subordinated Debentures, the Property Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers, of the Property
Trustee in good faith determine that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default arising under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property Trustee
charged with the administration of this Declaration shall have obtained
written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1. NAME. The Trust is named "KCPL Financing I", as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
14
SECTION 3.2. OFFICE. The address of the principal office of the
Trust is 1201 Walnut, Kansas City, Missouri 64106-2124. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3. PURPOSE. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such sale
to acquire the Subordinated Debentures and (b) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4. AUTHORITY. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust, and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with a Trustee or the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of such Trustee or Trustees to bind the Trust. Persons dealing with
the Trust are entitled to rely conclusively on the power and authority of a
Trustee or the Trustees as set forth in this Declaration.
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST. Except as provided in
Section 3.8 with respect to the Subordinated Debentures and the Property Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title of any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES. The Regular
Trustees shall have the exclusive power and authority and duty to cause the
Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of
15
Common Securities, and, PROVIDED FURTHER, there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange Commission
(the "Commission") the registration statement on Form S-3 prepared by
the Sponsor in relation to the Preferred Securities, including any
amendments thereto prepared by the Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in order to
qualify or register all or part of the Preferred Securities in any
state in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange, Inc. or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto prepared by the
Sponsor; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Subordinated Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; PROVIDED,
HOWEVER, that the Regular Trustees shall cause legal title to the
Subordinated Debentures to be held of record in the name of the Property
Trustee for the benefit of the Trust and the Holders of the Preferred
Securities and the Holders of the Common Securities;
16
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event, PROVIDED that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking any
Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including for
the purposes of section 316(c) of the Trust Indenture Act and with respect
to Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and the Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, transfer agent
for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election (i) to defer
payments of interest on the Subordinated Debentures by extending the
interest payment period under the Indenture or (ii) to shorten the
scheduled maturity date on the Subordinated Debentures;
17
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be characterized for United States
federal income tax purposes as a grantor trust and causing each Holder
of Securities to be treated as owning an undivided beneficial interest
in the Subordinated Debentures; and
(iii) co-operating with the Debenture Issuer to ensure that the
Subordinated Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax purposes,
PROVIDED that such action does not adversely affect the interests of the
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner which is consistent with the purposes and functions of the Trust set out
in Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
18
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not, and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) consent to the modification of the Subordinated Debentures or
any other asset of the Trust, unless the Trust shall have received an
opinion of counsel to the effect that such modification will not cause more
than an insubstantial risk that for United States federal income tax
purposes the Trust will not be characterized as a grantor trust.
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE. (a) The
legal title to the Subordinated Debentures shall be owned by and held of record
in the name of the Property Trustee in trust for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Debentures shall vest automatically in each Person
who may hereafter be appointed as Property Trustee as set forth in Section 5.6.
Such vesting and cessation of title shall be
19
effective whether or not conveyancing documents with respect to the Subordinated
Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Debentures to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and the Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account which is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Debentures are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated Debentures to
Holders of Securities upon the liquidation and dissolution of the Trust.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall hold the Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
20
(f) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration (including the Preferred Securities
Guarantee) or the Trust Indenture Act.
(g) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Section 5.6.
(h) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of the Holders of the Securities,
enforce its rights under the Indenture with respect to the Subordinated
Debentures and its rights under the Preferred Securities Guarantee in accordance
with the terms of the Preferred Securities Guarantee, subject to the rights of
the Holders pursuant to the terms of such Securities and the Preferred
Securities Guarantee.
(i) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and the
Common Securities and any such Paying Agent shall comply with section 317(b) of
the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the powers or the authority of the Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes and functions of
the Trust set forth in Section 3.3 and the Property Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
21
SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE. (a) 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 Declaration and in the terms of the Securities, and no implied covenants
shall be read into this Declaration against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, 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.
(b) No provision of this Declaration 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) 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 Property Trustee shall be
determined solely by the express provisions of this Declaration and in
the terms of the Securities, and the Property Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property 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 Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the
22
Property Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) 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 Securities at the time outstanding 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 Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or adequate indemnity
against such risk is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Subordinated Debentures and
the Property Trustee 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 Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Subordinated Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the Sponsor.
Money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Property Trustee Account maintained by
the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration,
23
nor shall the Property Trustee be liable for the default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. (a) Subject to
the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, approval, bond, security 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 Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(iii) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, 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 and, if the Trust is excluded from the
definition of an Investment Company solely by means of Rule 3a-5, subject
to the requirements of Rule 3a-5, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees.
(iv) The Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any rerecording, refiling or
reregistration thereof).
(v) The Property Trustee may consult with counsel 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 or suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Sponsor or any of its Affiliates and may include any of its employees. The
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction.
(vi) The Property Trustee shall be under no obligation to exercise any
rights or powers vested in it under this Declaration at the request or
direction of any Holder, unless
24
such Holder shall have provided to the Property Trustee reasonable security
or indemnity against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee, PROVIDED that nothing contained in this
Section 3.10(a)(vi) shall, however, relieve the Property Trustee, upon the
occurrence of an Event of Default, from exercising the rights and powers
vested in it by this Declaration.
(vii) 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, direction, consent, order,
approval, bond, security or other papers or documents, but the Property
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Property 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 Property 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.
(ix) Any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Declaration 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
Securities representing the aggregate liquidation amount of all outstanding
Securities of such class required under the terms of the Securities to
direct the Property Trustee to enforce such remedy or right or take such
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.
25
(b) No provision of this Declaration 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 3.11. DELAWARE TRUSTEE. Notwithstanding any other provision
of this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Trustees described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
SECTION 3.12. EXECUTION OF DOCUMENTS. Unless otherwise determined by
the Regular Trustees, a majority of, or if there are only two, both of the
Regular Trustees are authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to execute pursuant to
Section 3.6, PROVIDED that any listing application prepared by the Sponsor
referred to in Section 3.6(b)(iii) may be executed by any Regular Trustee.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14. DURATION OF TRUST. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall have existence for
forty-five (45) years from the Closing Date.
SECTION 3.15. MERGERS. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Section 3.15(b) and (c).
26
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Property Trustee, the Delaware Trustee or the Holders of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by a
trust organized as such under the laws of any State; PROVIDED that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust with
respect to the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities and Common
Securities, respectively (the "Successor Securities"), so long as the
Successor Securities rank the same as the Preferred Securities and
Common Securities rank with respect to Distributions and payments upon
liquidation, redemption, maturity and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties as the Property
Trustee as the Holder of the Subordinated Debentures;
(iii) the Preferred Securities or any Successor Securities thereof are
listed, or any such Successor Securities will be listed upon notification
of issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities thereof)
to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
27
(vii) prior to such merger, consolidation, amalgamation or replacement,
the Sponsor has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities of the Preferred Securities at least
to the extent provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity for United States federal income tax purposes to be classified
as other than a grantor trust and each Holder of the Securities not to be
treated as owning an undivided beneficial interest in the Subordinated
Debentures, except with the consent of Holders of 100% in liquidation amount of
the Securities.
ARTICLE IV
SPONSOR
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount equal to approximately 3% of the capital of the Trust at the
same time as the Preferred Securities are sold.
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
28
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) 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
take any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such states;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange, Inc. or any other national stock exchange or the Nasdaq
Stock Market's National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. NUMBER OF TRUSTEES. The number of Trustees shall
initially be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities;
PROVIDED that in any case, the number of Trustees shall be at least four (4)
unless the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee pursuant to Section 5.2, in which case the number of Trustees shall be
at least three (3).
29
SECTION 5.2. DELAWARE TRUSTEE. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware and otherwise meets the requirements
of applicable law,
PROVIDED that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY. (a) There shall at all
times be one Trustee which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority (if such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation 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 Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set out in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if they were the
obligor referred to in
30
Section 310(b) of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY. Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least twenty-one (21) years of age or a legal entity which shall act through
one or more Authorized Officers.
SECTION 5.5. INITIAL TRUSTEES. The initial Regular Trustees shall
be:
John J. DeStefano
1201 Walnut
Kansas City, Missouri 64106-2124
Andrea F. Bielsker
1201 Walnut
Kansas City, Missouri 64106-2124
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60603
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. (a)
Subject to Section 5.6(b), Trustees may be appointed or removed without cause at
any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities, voting as a class
at a meeting of the Holders of the Common Securities.
31
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until the
successor of such Trustee shall have been appointed or until the death, removal
or resignation of such Trustee. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
PROVIDED, HOWEVER, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust and the Sponsor; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust and the Sponsor.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee
as the case may be if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
32
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7. VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
a majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with Section 5.6.
SECTION 5.8. EFFECT OF VACANCIES. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9. MEETINGS. Meetings of the Regular Trustees shall be
held from time to time upon the call of any Regular Trustee. Regular meetings
of the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meetings of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that
33
the meeting has not been lawfully called or convened. Unless provided otherwise
in this Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present (whether in person
or by telephone) and eligible to vote with respect to such matter, PROVIDED that
a Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees. In the event there is only one Regular Trustee, any
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
SECTION 5.10. DELEGATION OF POWER. (a) Any Regular 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 3.6, including any registration statement or
amendment thereto filed with the Commission or making any other governmental
filing.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular 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 VI
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and principal on the
Subordinated Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a Distribution of
the Payment Amount to the Holders.
34
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES. (a) The
Regular Trustees shall, on behalf of the Trust, issue one class of preferred
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit A and incorporated herein by
reference (the "Preferred Securities"), and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Exhibit A and incorporated herein by reference
(the "Common Securities"). The Trust shall have no securities or other
interests in the assets of the Trust other than the Preferred Securities and the
Common Securities.
(b) The Securities shall be signed on behalf of the Trust by the
Regular Trustees (or, if there are more than two Regular Trustees, by any two of
the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Security. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Security so signed shall be delivered by the Trust,
such Security nevertheless may be delivered as though the person who signed such
Security had not ceased to be such Regular Trustee; and any Security may be
signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Security, are the Regular Trustees of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.1(b) with respect to the Common
Securities.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
35
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. TERMINATION OF TRUST. (a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor, the
filing of a certificate of cancellation with respect to the Trust or the
revocation of the charter of the Holder of the Common Securities or of the
Sponsor and the expiration of ninety (90) days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the dissolution of the Trust in accordance with the terms of
the Securities and pursuant to which all of the Subordinated Debentures
shall have been distributed to the Holders of Securities in exchange for
all of the Securities; or
(vi) upon delivery of written direction to the Property Trustee by the
Sponsor at any time (which direction is wholly optional and within the
discretion of the Sponsor) to dissolve the Trust and distribute the
Subordinated Debentures to the Holders of the Securities in accordance with
Section 3 of EXHIBIT A hereto.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Article X shall survive the termination of the
Trust.
36
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. TRANSFER OF SECURITIES. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor, PROVIDED that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust and each Holder of Securities would
not be treated as owning an undivided beneficial interest in the
Subordinated Debentures; and
(ii) the Trust would be an Investment Company or the transferee would
be an Investment Company if the transferee was not an Investment Company
before the transfer.
SECTION 9.2. TRANSFER OF CERTIFICATES. The Regular Trustees shall
provide for the registration of Certificates and of transfers of Certificates,
which will be effected without charge but only upon payment (with such indemnity
as the Regular Trustees may require) in respect of any tax or other government
charges which may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be
37
bound by this Declaration and the documents incorporated by reference herein.
SECTION 9.3. DEEMED SECURITY HOLDERS. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trustees shall have actual or other notice
thereof.
SECTION 9.4. BOOK ENTRY INTERESTS. Unless otherwise specified in the
terms of the Preferred Securities, the Preferred Securities Certificates, on
original issuance, will be issued in the form of one or more, fully registered,
global Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements
38
between such Preferred Security Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
SECTION 9.5. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the Preferred Security Holders to the Clearing
Agency, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
SECTION 9.7. DEFINITIVE PREFERRED SECURITY CERTIFICATES. If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within ninety (90) days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect, after consultation with the Sponsor,
to terminate the book entry system through the Clearing Agency with respect
to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable
39
for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such
instructions. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Preferred Securities may
be listed, or to conform to usage.
SECTION 9.8. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees 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 Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. LIABILITY. (a) Except as expressly set forth in this
Declaration, the Subordinated Debentures, the
40
Preferred Securities Guarantee and the terms of the Securities, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
SECTION 10.2. EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, pursuant to Section 3.9,
negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. FIDUCIARY DUTY. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
41
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or terms so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of, or factors
affecting, the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. INDEMNIFICATION. (a) To the fullest extent permitted
by applicable law, the Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim incurred by such
42
Indemnified Person by reason of the creation, operation or termination of
the Trust or any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, pursuant to Section 3.9, negligence) or willful misconduct
with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The rights to indemnification set forth herein shall survive the
termination of this Declaration.
SECTION 10.5. OUTSIDE BUSINESSES. Any Covered Person, the Sponsor,
the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depository for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
43
ARTICLE XI
ACCOUNTING
SECTION 11.1. FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2. CERTAIN ACCOUNTING MATTERS. (a) At all times during
the existence of the Trust, the Regular Trustees shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined
by and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an annual United States federal
income tax information statement, if one is required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within thirty (30) days
after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3. BANKING. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; PROVIDED, HOWEVER,
that all payments of funds in respect of
44
the Subordinated Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; PROVIDED, HOWEVER, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4. WITHHOLDING. The Trust and the Trustees shall comply
with all withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular
Trustee(s) shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder. In the event of any claimed over-withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. AMENDMENTS. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
be amended by, and only by, a written instrument approved and executed by the
Regular Trustees (or, if there are more than two Regular Trustees, a majority of
the Regular Trustees); PROVIDED, HOWEVER, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(1) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of
45
this Declaration (including the terms of the Securities);
(2) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(ii) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result thereof would be to
(A) cause the Trust not to be characterized for purposes of
United States federal income taxation as a grantor trust and each
Holder of Securities not to be treated as owning an undivided
beneficial interest in the Subordinated Debentures, as evidenced by an
Opinion of Counsel to the effect that such amendment shall not result
in the foregoing;
(B) affect adversely the rights, powers, duties, obligations or
immunities of the Property Trustee or the Delaware Trustee; or
(C) cause the Trust to be deemed to be an Investment Company
which is required to be registered under the Investment Company Act;
(iii) at such time after the Trust has issued any Securities which
remain outstanding, any amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(iv) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
46
(v) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
(vi) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove, Trustees
shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities.
(b) Notwithstanding Section 12.1(a)(iii), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of such class of Holders, if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Security Certificates held by the Holders of Securities exercising the right
to call a meeting and only those specified shall be counted for purposes of
47
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven (7) days and not
more than sixty (60) days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on which
the Preferred Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of Securities.
Any action that may be taken at a meeting of the Holders of Securities may
be taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballots submitted to the
Holders of Securities for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which such Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of eleven (11) months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Holder of
Securities executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate.
48
(iv) Unless the Business Trust Act, this Declaration, the Trust
Indenture Act, the terms of the Securities or the listing rules of any
stock exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a national banking association duly
organized under the laws of the United States of America, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee, and it constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or
49
constitute a breach of the Articles of Organization or By-Laws of the
Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Delaware Trustee represents and warrants to the Trust and the Sponsor at the
date of this Declaration, that the Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and this Declaration.
This Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
ARTICLE XIV
SUCCESSOR CORPORATION
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC. Nothing contained in
this Declaration or in any of the Securities shall prevent any consolidation or
merger of the Sponsor with or into any other corporation or corporations
(whether or not affiliated with the Sponsor), or successive consolidations or
mergers in which the Sponsor or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of
the property of the Sponsor or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Sponsor or its successor or successors) authorized to
acquire and operate the same; PROVIDED, HOWEVER, the Sponsor hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment, performance and observance
of all the covenants and conditions of this Declaration to be paid, performed or
observed by the Sponsor, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Property Trustee executed and delivered to
the Property Trustee by the entity formed by such consolidation, or into which
the Sponsor shall have been merged, or by the entity which shall have acquired
such property.
50
SECTION 14.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Property
Trustee and satisfactory in form to the Property Trustee, of the due and
punctual payment, performance and observance of all of the covenants and
conditions of this Declaration to be paid, performed or observed by the Sponsor,
such successor corporation shall succeed to and be substituted for the Sponsor
with the same effect as if it had been named as the Sponsor herein.
(b) Nothing contained in this Declaration or in any of the Securities
shall prevent the Sponsor from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Sponsor).
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO PROPERTY TRUSTEE.
The Property Trustee, subject to the provisions of Section 3.9, may receive an
opinion of counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. NOTICES. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
KCPL FINANCING I
c/o Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Treasurer
Facsimile: 816-556-2992
51
(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0216
Chicago, Illinois 60670-0216
Attention: Corporate Trust Administration
Facsimile: 312-407-4656
(c) if given to the Delaware Trustee, at the mailing address of the
Property Trustee with a copy to the address set forth below (or such other
address as the Delaware Trustee may give notice of to the Holders of the
Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Facsimile: 815-356-0391
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder
of the Common Securities may give notice of to the Trust):
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Treasurer
Facsimile: 816-556-2992
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.2. GOVERNING LAW. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
52
SECTION 15.3. INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust not be characterized for United States federal
income tax purposes as an association taxable as a corporation or a partnership
but rather, that the Trust be characterized as a grantor trust or otherwise in a
manner such that each Holder of Securities be treated as owning an undivided
beneficial interest in the Subordinated Debentures. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
SECTION 15.4. HEADINGS. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 15.5. SUCCESSORS AND ASSIGNS. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 15.6. PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 15.7. COUNTERPARTS. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
53
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ John J. DeStefano
John J. DeStefano
as Trustee
s/s Andrea F. Bielsker
Andrea F. Bielsker
as Trustee
THE FIRST NATIONAL BANK OF CHICAGO
Not in its individual capacity but solely as Property
Trustee
By: s/s John J. Prendiville
Name:John J. Prendiville
Title: Vice President
FIRST CHICAGO DELAWARE INC.
Not in its individual capacity
but solely as Delaware Trustee
By: /s/ John J. Prendiville
Name: John J. Prendiville
Title: Vice President
KANSAS CITY POWER & LIGHT COMPANY
as Sponsor
By: /s/ B. J. Beaudoin
Name: Bernard J. Beaudoin
Title: Executive Vice President -
Chief Executive Officer
54
EXHIBIT A
TERMS OF
8.3% TRUST ORIGINATED PREFERRED SECURITIES
8.3% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust of KCPL Financing I dated as of April 15, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of one
hundred fifty million dollars ($150,000,000) and a liquidation amount with
respect to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "8.3% Trust Originated
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
(b) COMMON SECURITIES. Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of four
million six hundred fourty thousand dollars ($4,640,000) and a liquidation
amount with respect to the assets of the Trust of $25 per Common Security, are
hereby designated for the purposes of identification only as "8.3% Trust
Originated Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex II, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
A-1
2. DISTRIBUTIONS. (a) Distributions payable on each Security will
be fixed at a rate per annum of 8.3% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the rate of interest
payable on the Subordinated Debentures to be held by the Property Trustee.
Distributions in arrears will bear interest compounded quarterly at the Coupon
Rate to the extent permitted by applicable law. The term "Distributions," as
used herein, includes any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Subordinated Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period, on the basis
of the actual number of days elapsed in such a 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from April 15, 1997 and will be payable quarterly in arrears, on March 31, June
30, September 30, and December 31 of each year, commencing on June 30, 1997,
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Subordinated Debentures for a period not
exceeding twenty consecutive quarters (each such period, an "Extension Period")
and, as a consequence of such extension, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the Coupon Rate,
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED that such Extension Period, together with all such
previous and further extensions thereof, may not exceed twenty consecutive
quarters or extend beyond the maturity of the Subordinated Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Subordinated
A-2
Debentures. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company" in the
Prospectus dated April 3, 1997, as supplemented by the Prospectus Supplement
dated April 9, 1997 (the "Prospectus") of the Trust included in the Registration
Statement on Form S-3 of the Sponsor and the Trust. The relevant record dates
for the Common Securities, and if the Preferred Securities shall not continue to
remain in book-entry-only form, the relevant record dates for the Preferred
Securities, shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates which payment dates correspond to the interest
payment dates on the Subordinated Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment under the
Subordinated Debentures, will cease to be payable to the Person in whose name
such Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distribution
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 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 such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Securities on the date of the dissolution, winding-up or
termination, as the case may be, will be entitled to receive out of the assets
of the Trust available for distribution to Holders of Securities, after paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act, an amount equal to
the aggregate of the stated liquidation amount of $25 per Security plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation
A-3
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, 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 the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION. (a) Upon the repayment of the Subordinated
Debentures in whole or in part, whether at maturity or upon acceleration,
redemption or otherwise, the proceeds from such repayment or payment shall be
simultaneously applied to redeem Securities having an aggregate stated
liquidation amount equal to the aggregate principal amount of the Subordinated
Debentures so repaid or redeemed at a redemption price of $25 per Security plus
an amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption except in the case
of payments upon maturity.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur and
be continuing, the Regular Trustees, upon not less than 30 nor more than 60 days
notice, may redeem the Securities in whole or in part for cash within 90 days
following the occurrence of such Tax Event (the "90 Day Period") at the
Redemption Price on a Pro Rata basis PROVIDED, that, if at the time there is
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Tax Event by taking some ministerial action ("Ministerial Action"), such as
filing a form or making an election, or pursuing some other similar reasonable
measure that has no adverse effect on the Sponsor, the Trust, the Debenture
Issuer or the Holders of the Securities, the Trust will pursue such Ministerial
Action in lieu of redemption.
"TAX EVENT" means that the Regular Trustees shall have received an
opinion from independent tax counsel experienced in
A-4
such matters (a "Redemption Tax Opinion") to the effect that, on or after the
latest date of the Prospectus, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the latest date of the Prospectus, there is more than an insubstantial
risk that interest payable by the Debenture Issuer to the Trust on the
Subordinated Debentures is not, or within 90 days of the date thereof will not
be, deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
5. DISTRIBUTION OF SUBORDINATED DEBENTURES IN EXCHANGE FOR
SECURITIES. (a) On and from the date fixed by the Trustees for any distribution
of Subordinated Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depositary") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Debentures to be delivered upon such distribution and any certificates
representing Securities, except for certificates representing Preferred
Securities held by the Depository or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
(b) If the Subordinated Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Subordinated Debentures listed on the New York
Stock Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Subordinated Debentures.
A-5
6. REDEMPTION OR DISTRIBUTION PROCEDURES. (a) Notice of any
redemption of, or notice of distribution of Subordinated Debentures in exchange
for, the Securities (a "Redemption/Distribution Notice") will be given by the
Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date fixed for
redemption of the Subordinated Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 6(a), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Preferred Securities; PROVIDED that if, as a result of such Pro
Rata redemption, Clearing Agency Participants would hold fractional interests in
the Preferred Securities, the Depositary will adjust the amount of the interest
of each Clearing Agency Participant to be redeemed to avoid such fractional
interests.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Debentures are redeemed as set out in this Section 4 (which notice
will be irrevocable), then (i) while the Preferred Securities are in book entry
only form, with respect to the Preferred Securities, by 12:00 noon, New York
City time, on the redemption date, PROVIDED that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debentures, the Property Trustee will
deposit irrevocably with the Depositary or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities, and (ii) if the Preferred Securities are
issued in definitive form, with respect to the Preferred Securities, and with
respect to the Common Securities, PROVIDED that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the related
redemption
A-6
or maturity of the Subordinated Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds have been deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or on
the redemption date, as applicable, all rights of Holders of such Securities so
called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities which have
been so called for redemption. If any date fixed for redemption of Securities
is not a Business Day, then payment of the Redemption Price 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 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 each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption
Price in respect of Securities is improperly withheld or refused and not paid
either by the Property Trustee or by the Sponsor as Guarantor pursuant to the
Preferred Securities Guarantee, Distributions on such Securities will continue
to accrue, from the original redemption date to the actual 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.
(d) Redemption/Distribution Notices shall be sent to (i) in respect
of the Preferred Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if Global Certificates have been issued or if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof, and (ii) in respect of the Common Securities, to the Holders thereof.
(e) Subject to applicable law (including, without limitation, United
States federal securities laws), the Sponsor or any of its Affiliates may at any
time and from time to time purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
7. VOTING RIGHTS - PREFERRED SECURITIES. (a) Except as provided
under Sections 7(b) and 9 and as otherwise required by law and the Declaration,
the Holders of the Preferred Securities will have no voting rights.
A-7
(b) The Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class, may direct 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 the
Declaration, including (i) directing 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
Subordinated Debentures, (ii) waive any past default and its consequences that
are waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Debentures shall be due
and payable, or (iv) consent to any amendment, modification or termination of
the Indenture or the Subordinated Debentures, where such consent shall be
required, PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of greater than a majority of the Holders in principal
amount of Subordinated Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent at the direction of the Holders of
at least the proportion in liquidation amount of the Preferred Securities which
the relevant Super Majority represents of the aggregate principal amount of the
Subordinated Debentures. The Property Trustee shall not take any action in
accordance with the directions of the Holders of the Preferred Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, for the purposes of United States
federal income tax, the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of Securities will continue
to be treated as owning an undivided beneficial interest in the Subordinated
Debentures on account of such action. If the Property Trustee fails to enforce
its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
A-8
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Debentures in accordance with the Declaration and
the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor, or by any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
8. VOTING RIGHTS - COMMON SECURITIES. (a) Except as provided under
Section 8(b) and (c) and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Only after the Event of Default with respect to the Preferred
Securities has been cured, waived or otherwise eliminated, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct 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 the Declaration, including (i)
directing 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 Subordinated Debentures, (ii) waive
any past default and its consequences that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, PROVIDED,
HOWEVER, that where a consent under the Indenture would require the consent of a
Super Majority, the Property Trustee may only give such consent at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the
A-9
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Debentures. The Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, for the purposes of United States
federal income tax, the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of Securities will continue
to be treated as owning an undivided beneficial interest in the Subordinated
Debentures on account of such action. If the Property Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Debentures in accordance with the Declaration and the terms of
the Securities.
9. AMENDMENTS. If any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities,
as a single class, will be entitled to vote on such amendment or proposal (but
not on any other amendment or proposal) and such amendment or proposal shall not
be effective except with the approval of the Holders of at least 66-2/3 in
liquidation amount of the Securities affected thereby, provided that a
A-10
reduction of the aggregate liquidation amount or the distribution rate, or a
change in the payment dates or maturities of the Preferred Securities shall not
be permitted without the consent of each holder of the Preferred Securities. In
the event any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected 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 66-2/3 in liquidation amount of such class of Securities.
10. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Indenture has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
11. RANKING. The Preferred Securities rank PARI PASSU and payment
thereon shall be made Pro Rata with the Common Securities except that when an
Event of Default occurs and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
12. LISTING. The Regular Trustees shall use their best efforts to
cause the Preferred Securities to be listed for quotation on the New York Stock
Exchange, Inc.
13. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions therein and to the
provisions of the Indenture.
A-11
14. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have
no preemptive rights to subscribe for any additional Securities.
15. MISCELLANEOUS. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred
Securities Guarantee to a Holder without charge on written request to the
Sponsor at its principal place of business.
A-12
ANNEX I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security as a whole (except by the Depositary to a nominee of the Depositary or
by a nominee of the Depositary to the Depositary 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, New
York) to the Trust 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 is 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
CUSIP NO. 482432 20 0
Certificate Evidencing Preferred Securities
of
KCPL FINANCING I
Preferred Securities
(Liquidation Amount $25 per Preferred Security)
KCPL FINANCING I, a business trust formed under the laws of the State
of Delaware (the "TRUST"), hereby certifies that ________ (the "Holder") is the
registered owner of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.3% Trust
Originated Preferred Securities (liquidation amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities
I-1
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. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of April 15, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Exhibit A to the Declaration. Capitalized terms used
herein but not defined herein shall have the respective meanings given them in
the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Trust will provide a
copy of the Declaration and the Preferred Securities Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated Debentures
as indebtedness and the Preferred Securities as evidence of indirect beneficial
ownership in the Subordinated Debentures.
I-2
IN WITNESS WHEREOF, the Trust has executed this certificate this
________ day of ________, ________.
KCPL FINANCING I
By:_________________________
as Reguar Trustee
By:_________________________
as Regular Trustee
--------------------------
I-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate 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.)
ANNEX II
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
KCPL FINANCING I
Common Securities
(Liquidation Amount $25 per Common Security)
KCPL FINANCING I, a business trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that _____ (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.3% Trust
Originated Common Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). The Common 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. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of April 15, 1997, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Exhibit A to the Declaration.
Capitalized terms used herein but not defined herein shall have the respective
meanings given them in the Declaration. The Holder is entitled to the benefits
of the Common Securities Guarantee to the extent provided therein. The Trust
will provide a copy of the Declaration and the Common Securities Guarantee to
the Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated Debentures
as indebtedness and the Common Securities as evidence of indirect beneficial
ownership in the Subordinated Debentures.
II-1
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of ________, ________.
KCPL FINANCING I
By:_________________________
as Reguar Trustee
By:_________________________
as Regular Trustee
______________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate 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.)
II-2