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EXHIBIT 4.8.6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALPINE CAPITAL TRUST II
January 31, 2000
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TABLE OF CONTENTS
ARTICLE I Interpretation and Definitions
Section 1.01 Definitions 2
ARTICLE II Trust Indenture Act
Section 2.01 Trust Indenture Act; Application 11
Section 2.02 Lists of Holders of Securities 12
Section 2.03 Reports by the Property Trustee 12
Section 2.04 Periodic Reports to Property Trustee 12
Section 2.05 Evidence of Compliance with Conditions Precedent 12
Section 2.06 Events of Default; Waiver 12
Section 2.07 Event of Default; Notice 14
ARTICLE III Organization
Section 3.01 Name 15
Section 3.02 Office 15
Section 3.03 Purpose 15
Section 3.04 Authority 15
Section 3.05 Title to Property of the Trust 16
Section 3.06 Powers and Duties of the Administrative Trustees 16
Section 3.07 Prohibition of Actions by the Trust and the Trustees 19
Section 3.08 Powers and Duties of the Property Trustee 20
Section 3.09 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 Depositor
Section 4.01 Depositor's Purchase of Common Securities 28
Section 4.02 Responsibilities of the Depositor 28
Section 4.03 Guarantee of Payment of Trust Obligations 29
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ARTICLE V Trustees
Section 5.01 Number of Trustees 29
Section 5.02 Delaware Trustee 30
Section 5.03 Property Trustee; Eligibility 30
Section 5.04 Qualifications of Administrative Trustees and Delaware Trustee
Generally 31
Section 5.05 Initial Trustees 31
Section 5.06 Appointment, Removal and Resignation of Trustees 32
Section 5.07 Vacancies among Trustees 34
Section 5.08 Effect of Vacancies 34
Section 5.09 Meetings 35
Section 5.10 Delegation of Power 35
Section 5.11 Merger, Conversion, Consolidation or Succession to Business 35
ARTICLE VI Distributions
Section 6.01 Distributions 36
ARTICLE VII Issuance of Securities
Section 7.01 General Provisions Regarding Securities 36
Section 7.02 Execution and Authentication 37
Section 7.03 Form and Dating 38
Section 7.04 Registrar, Paying Agent, Conversion Agent and Tender Agent 40
Section 7.05 Paying Agent to Hold Money in Trust 41
Section 7.06 Replacement Securities 41
Section 7.07 Outstanding Preferred Securities 42
Section 7.08 Preferred Securities in Treasury 42
Section 7.09 Temporary Securities 42
Section 7.10 Cancellation 42
ARTICLE VIII Termination of Trust
Section 8.01 Dissolution of Trust 43
ARTICLE IX Transfer and Exchange
Section 9.01 General 44
Section 9.02 Transfer Procedures and Restrictions 45
Section 9.03 Deemed Security Holders 49
Section 9.04 Notices to Depositary 49
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Section 9.05 Appointment of Successor Depositary 49
ARTICLE X Limitation of Liability of
Holders of Securities, Trustees or Others
Section 10.01 Liability 50
Section 10.02 Exculpation 50
Section 10.03 Fiduciary Duty 50
Section 10.04 Indemnification 51
Section 10.05 Outside Businesses 52
ARTICLE XI Accounting
Section 11.01 Fiscal Year 52
Section 11.02 Certain Accounting Matters 52
Section 11.03 Banking 53
Section 11.04 Withholding 53
ARTICLE XII Amendments and Meetings
Section 12.01 Amendments 54
Section 12.02 Meetings of the Holders of Securities; Action by Written Consent 54
ARTICLE XIII Representations of Property
Trustee and Delaware Trustee
Section 13.01 Representations and Warranties of Property Trustee 56
Section 13.02 Representations and Warranties of Delaware Trustee 56
ARTICLE XIV Registration Rights
Section 14.01 Registration Rights 57
ARTICLE XV Miscellaneous
Section 15.01 Notices 58
Section 15.02 Governing Law 59
Section 15.03 Intention of the Parties 59
Section 15.04 Headings 59
Section 15.05 Successors and Assigns 59
Section 15.06 Partial Enforceability 59
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Section 15.07 Counterparts 60
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALPINE CAPITAL TRUST II
January 31, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated
and effective as of January 31, 2000, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Calpine
Corporation, a Delaware corporation, as trust Depositor (the "Depositor"), and
by the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (as defined below) issued pursuant to this Declaration;
WHEREAS, the Trustees and the Depositor established Calpine
Capital Trust II (the "Trust") under the Business Trust Act (as hereinafter
defined) pursuant to a Declaration of Trust dated as of January 24, 2000 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on January 25, 2000, 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 Debentures of the Debenture Issuer (as hereinafter defined);
WHEREAS, as of the date hereof, no interests of the Trust have
been issued;
WHEREAS, all of the Trustees and the Depositor, by this
Declaration, amend and restate in its entirety each and every term and provision
of the Original Declaration; and
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.
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ARTICLE I
Interpretation and Definitions
Section 1.1 Definitions. Unless the context otherwise requires:
(1) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(2) a term defined anywhere in this Declaration or the Indenture
has the same meaning throughout;
(3) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(4) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(5) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(6) 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; and
(7) a reference to the singular includes the plural and vice
versa.
"Additional Amounts" has the meaning specified in the Indenture.
"Administrative Action" has the meaning set forth in the
definition of "Tax Event" in this Section 1.01.
"Administrative Trustee" means any Trustee other than the
Property Trustee and the Delaware Trustee.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with
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respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-Registrar.
"Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Beneficiaries" has the meaning set forth in Section 4.03(a).
"Book Entry Interest" means a beneficial interest in a Global
Preferred Securities Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Depositary as described in Section
9.02.
"Business Day" means any day other than a Saturday or a Sunday, a
day on which banking institutions in New York, New York are authorized or
required by law to close, or a day on which the corporate trust office of the
Property Trustee or the Debenture Trustee is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Change in 1940 Act Law" has the meaning specified in paragraph
4(d) of Annex I.
"Closing Date" means January 31, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor legislation.
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"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(a).
"Common Securities Guarantee" means the guarantee agreement to be
dated as of January 31, 2000 of the Depositor in respect of the Common
Securities.
"Common Stock" has the meaning specified in the Indenture.
"Compounded Interest" has the meaning specified in the Indenture.
"Conversion Agent" has the meaning set forth in Section 7.04.
"Conversion Date" has the meaning specified in paragraph 5(b) of
Annex I.
"Conversion Request" has the meaning specified in paragraph 5(b)
of Annex I.
"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 Event of Default" in respect of the Securities means
an Event of Default (as defined in the Indenture) has occurred and is continuing
in respect of the Debentures.
"Debenture Issuer" means the Depositor in its capacity as issuer
of the Debentures.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture and to be held by the Property Trustee, in
the form attached to the Indenture as Exhibit A.
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Declaration" means this Amended and Restated Declaration of
Trust as originally executed or as it may from time to time be supplemented or
amended.
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"Declaration Trustees" means collectively, the Administrative
Trustees, the Property Trustee and the Delaware Trustee.
"Deferral Period" has the meaning specified in paragraph 2(b) of
Annex I.
"Definitive Preferred Securities" means any Preferred Securities
in definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 5.02.
"Depositary" means The Depository Trust Company, the initial
clearing agency, until a successor shall be appointed pursuant to Section 9.05,
and thereafter means such successor Depositary.
"Depositor" means Calpine Corporation, a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as Depositor of the Trust.
"Direct Action" has the meaning specified in Section 3.08(e).
"Disclosure Documents" has the meaning specified in the
Remarketing Agreement.
"Dissolution Tax Opinion" has the meaning specified in the
definition of Tax Event in this Section 1.01.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"Event of Default" means:
(1) a Debenture Event of Default; or
(2) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days (subject to the deferral of any due date
in the case of a Deferral Period); or
(3) default by the Trust in the payment of any
Redemption Price of any Security when it becomes due and payable; or
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(4) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of
which or the breach of which is addressed in clause (ii) or (iii)
above), and continuation of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to the
defaulting Declaration Trustee or Declaration Trustees by the holders of
at least 25% in aggregate liquidation amount of the outstanding
Preferred Securities, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the Declaration; or
(5) the failure of the Depositor to appoint a successor
Property Trustee in the manner required by Section 5.06(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation, and the rules and
regulations promulgated thereunder.
"Failed Final Remarketing" has the meaning specified in the
Remarketing Agreement.
"Fiscal Year" shall have the meaning specified in Section 11.01.
"Global Preferred Securities" means Rule 144A Global Preferred
Securities and/or Unrestricted Global Preferred Securities, as the context
requires.
"Holder" means a 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.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of
any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture, dated as of January 31, 2000,
between the Debenture Issuer and the Debenture Trustee, as it may be amended
from time to time.
"Initial Conversion Price" has the meaning specified in paragraph
5(a) of Annex I.
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"Initial Rate" has the meaning specified in paragraph 2(a) of
Annex I.
"Initial Redemption Price" has the meaning specified in the
Indenture.
"Investment Company" means an investment company as defined in
the Investment Company Act, and the rules and regulations promulgated
thereunder.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in paragraph
4(d) of Annex I.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Like Amount" means (i) with respect to a redemption of
Securities, Securities having an aggregate liquidation amount equal to that
portion of the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture, allocated to such Securities based upon the
relative liquidation amounts of such classes and the proceeds of which will be
used to pay the applicable Redemption Price of such Securities and (ii) with
respect to a distribution of Debentures to Holders of the Securities in
connection with a dissolution and liquidation of the Trust, Debentures having a
principal amount equal to the aggregate liquidation amount of the Securities of
the Holder to whom such Debentures are distributed.
"Liquidation Distribution" has the meaning specified in paragraph
3 of Annex I.
"List of Holders" has the meaning set forth in Section 2.02(a).
"Majority in liquidation amount of the Securities" means, except
as provided in the terms of the Securities and by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in paragraph 4(d)
in Annex I.
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"No Recognition Opinion" has the meaning specified in paragraph
4(d) of Annex I.
"Obligations" means any costs, expenses or liabilities of the
Trust, other than obligations of the Trust to pay to Holders of any Securities
or other similar interests in the Trust the amounts due such Holders pursuant to
the terms of the Securities or such other similar interests, as the case may be.
"Offering Circular" means the confidential offering circular,
dated January 25, 2000, relating to the issuance by the Trust of Preferred
Securities.
"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:
(1) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Certificate;
(3) 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
(4) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OID" means original issue discount.
"Optional Closing Date" has the meaning assigned to such term in
the Purchase Agreement.
"Optional Redemption" has the meaning specified in the Indenture.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 7.04.
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"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section
7.01(a).
"Preferred Securities Guarantee" means the guarantee agreement to
be dated as of January 31, 2000, between the Depositor and The Bank of New York,
as Guarantee Trustee, in respect of the Preferred Securities.
"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 Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in Section
3.08(c).
"Pro Rata" has the meaning specified in paragraph 9 of Annex I.
"Purchase Agreement" has the meaning set forth in Section 7.03.
"QIBs" has the meaning set forth in Section 7.03(a).
"Quorum" means a majority of the Administrative Trustees or, if
there are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning specified in the Indenture.
"Redemption Tax Opinion" has the meaning specified in paragraph 4
(d) of Annex I.
"Registrar" has the meaning set forth in Section 7.04.
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"Registration Default" has the meaning specified in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated January 31, 2000, among the Depositor, the Trust and the
initial Purchasers named in the Purchase Agreement.
"Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Related Party" means, with respect to the Depositor, any direct
or indirect wholly owned subsidiary of the Depositor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Depositor.
"Remarketing" has the meaning specified in the Remarketing
Agreement.
"Remarketing Agent" has the meaning specified in the Indenture.
"Remarketing Agreement" means the Remarketing Agreement, dated
January 31, 2000 among the Depositor, the Trust, the Tender Agent and the
Remarketing Agent.
"Responsible Officer" means, with respect to the Property
Trustee, any vice-president, any assistant vice-president, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer in the Corporate Trust Department of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Preferred Securities" shall mean the Rule 144A Global
Preferred Securities.
"Restricted Securities Legend" has the meaning specified in
Section 9.02(h).
"Rule 144A" has the meaning specified in Section 7.03(a).
"Rule 144A Global Preferred Security" has the meaning specified
in Section 7.03(a).
"Securities" means the Common Securities and the Preferred
Securities.
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"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation, and the rules and regulations
promulgated thereunder.
"Securities Guarantee" means the Common Securities Guarantee and
the Preferred Securities Guarantee.
"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Trustee" means a trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(ii)(B).
"Successor Delaware Trustee" has the meaning set forth in Section
5.06(c).
"Successor Entity" has the meaning specified in Section 3.15(b)
"Successor Property Trustee" has the meaning set forth in Section
5.06(a).
"Successor Securities" has the meaning specified in Section
3.15(b).
"Super Majority" has the meaning set forth in Section
2.06(a)(ii).
"Tax Event" means the receipt by the Property Trustee of an
opinion of nationally recognized independent tax counsel to the Depositor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by
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the Trust, there is more than an insubstantial risk that (a) if the Debentures
are held by the Property Trustee, (x) the Trust is, or will be within 90 days of
the date of such opinion, subject to United States federal income tax with
respect to interest accrued or received on the Debentures or subject to more
than a de minimis amount of other taxes, duties or other governmental charges as
determined by such counsel, or (y) any portion of interest payable by the
Depositor to the Trust (or OID accruing) on the Debentures is not, or within 90
days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes or (b) with
respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Depositor (or OID accruing) on the Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Depositor in whole or in part for United States federal income tax purposes.
"Tender Agent" means the Property Trustee if any Preferred
Securities are outstanding and the Debenture Trustee if the Debentures have been
distributed to the Holders of the Preferred Securities.
"Tender Notification Date" has the meaning specified in the
Indenture.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holders
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Term Provisions" has the meaning specified in the Remarketing
Agreement.
"Term Call Protections" has the meaning specified in the
Remarketing Agreement.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust" has the meaning specified in the first recital of this
Agreement.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation, and the rules and
regulations promulgated thereunder.
"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.
"Unrestricted Global Preferred Security" has the meaning set
forth in Section 9.02(b).
ARTICLE II
Trust Indenture Act
Section 1.2 Trust Indenture Act; Application. (a) This
Declaration is, or will be upon qualification under the Trust Indenture Act,
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration, which are incorporated by reference in and made part
of this Declaration and shall, to the extent applicable, be governed by such
provisions. This Declaration will not be qualified under the Trust Indenture Act
except upon the effectiveness of the Shelf Registration Statement.
(1) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(2) Until such time as this Declaration is qualified under the
Trust Indenture Act, the parties hereto agree that the provisions of Sections
310 to 317, inclusive, of the Trust Indenture Act shall be incorporated herein
by reference, subject to the provisions of this Declaration, 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.
(3) 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.
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Section 1.3 Lists of Holders of Securities. (a) Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
the Property Trustee (i) within 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 neither the Depositor nor the
Administrative 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 Depositor and
the Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 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 of
Holders previously given to it on receipt of a new List of Holders.
(1) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 1.4 Reports by the Property Trustee. Within 60 days after
March 15 of each year, commencing March 15, 2000, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 1.5 Periodic Reports to Property Trustee. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act, such
compliance certificate to be delivered annually on or before 120 days after the
end of each fiscal year of the Depositor.
Section 1.6 Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
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Section 1.7 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:
(1) is caused by a Debenture Event of Default that is not
waivable under the Indenture, the Event of Default under the Declaration
shall also not be waivable;
(2) is caused by a Debenture Event of Default that
requires the consent or vote of greater than a majority in principal
amount of the holders of the Debentures (a "Super Majority") to be
waived under the Indenture, the Event of Default under the 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 of the aggregate principal amount of the
Debentures outstanding;
(3) is the result of a default by the Trust in the payment
of any Distribution when it becomes due and payable, which default has
continued for 30 days (subject to the deferral of any due date in the
case of a Default Period), the Event of Default shall not be waivable;
or
(4) is the result of a default by the Trust in the payment
of any Redemption Price of any Preferred Security when it becomes due
and payable, the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
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 an Event of
Default with respect to the Preferred Securities 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.
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(2) 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 with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:
(1) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this Section 2.06(b),
the Event of Default under the Declaration shall also not be waivable;
or
(2) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.06(b), the Event of Default under the
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 of the aggregate principal amount
of the Debentures outstanding;
provided further, 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 the effects of 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. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), 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 Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(3) 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. The foregoing
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provisions of this Section 2.06(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act
is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
Section 1.8 Event of Default; Notice. (a) The Property Trustee
shall, within ten Business Days after the occurrence of an Event of Default
actually known to the Property Trustee, (i) transmit by mail, first-class
postage prepaid, to the Holders of the Securities, and (ii) transmit by any
means provided for in this Declaration to the Administrative Trustees and the
Depositor, notices of all defaults actually known to the Property Trustee,
unless such defaults have been cured or waived before the giving of such notice
(the term "defaults" for the purposes of this Section 2.07(a) being hereby
defined to be an Event of Default, not including any periods of grace and
irrespective of the giving of any notice); provided that, except for a default
in the payment of principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment established for the
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 determines that the withholding of such notice is in the interests of
the Holders of the Securities.
(1) The Property Trustee shall not be deemed to have knowledge of
any default except:
(1) a default under Sections 5.01(1) and 5.01(2)
of the Indenture; or
(2) any default as to which the Property Trustee shall
have received written notice.
ARTICLE III
Organization
Section 1.9 Name. The Trust is named "Calpine Capital Trust II,"
as such name may be modified from time to time by the Administrative 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 Administrative Trustees.
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Section 1.10 Office. The address of the principal office of the
Trust is c/o Calpine Corporation, 50 West San Fernando Street, San Jose,
California 95113, Attention: General Counsel. On ten Business Days' written
notice to the Holders of Securities, the Administrative Trustees may designate
another principal office.
Section 1.11 Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell the Securities and use the proceeds from such
sale to acquire the 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 1.12 Authority. (a) Subject to the limitations provided
in this Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative 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 the
Trustees acting on behalf of the Trust, no Person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
(1) Except as expressly set forth in this Declaration and except
if a meeting of the Administrative Trustees is called with respect to any matter
over which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(2) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.06.
Section 1.13 Title to Property of the Trust. Except as provided
in Section 3.08 with respect to the 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 to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
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Section 1.14 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have, together (except in the case of
paragraphs (a), (b) and (c) of this Section 3.06) with any Special Trustee
holding office pursuant to Section 5.06, if any, the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(1) 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 Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to simultaneous issuances of both Preferred Securities and
Common Securities on the Closing Date and any Optional Closing Date;
(2) in connection with the issue and sale of the Preferred
Securities to:
(1) assist in the preparation of the Offering Circular and
preliminary offering circular, if any, in each case prepared by the
Depositor, in relation to the offering and sale of the Preferred
Securities to qualified institutional buyers in reliance of Rule 144A
under the Securities Act and to execute and file with the Commission, at
such time as determined by the Depositor (whether in accordance with the
Registration Rights Agreement or otherwise), a registration statement on
Form S-3, or other form as applicable, prepared by the Depositor,
including any amendments thereto in relation to the Preferred
Securities;
(2) execute and file any documents prepared by the
Depositor, or take any acts as determined by the Depositor to be
necessary in order to qualify or register all or part of the Preferred
Securities in any State or foreign jurisdiction in which the Depositor
has determined to qualify or register such Preferred Securities for
sale;
(3) execute and file an application, prepared by the
Depositor, to the Private Offerings, Resale and Trading through
Automated Linkages ("PORTAL") Market and, at such time as determined by
the Depositor (whether pursuant to the Registration Rights Agreement or
otherwise), to the New York Stock Exchange, Inc. or any other national
stock exchange or the NASDAQ National Market for listing or quotation of
the Preferred Securities, but if and only if the Depositor has so
instructed the Administrative Trustees to make such filing;
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(4) to execute and deliver letters, documents, or
instruments with The Depository Trust Company relating the Preferred
Securities;
(5) execute and file with the Commission a registration
statement on Form 8-A, at such time as determined by the Depositor,
including any amendments thereto, prepared by the Depositor relating to
the registration of the Preferred Securities under Section 12 of the
Exchange Act, but if and only if the Depositor has so instructed the
Administrative Trustees to make such filing; and
(6) execute and enter into the Remarketing Agreement, the
Registration Rights Agreement and the Purchase Agreement and other
related agreements providing for the sale of the Preferred Securities;
and
(7) and to execute and file any agreement, certificate or
other document which such Administrative Trustee deems necessary or
appropriate in connection with the issuance and sale of the Preferred
Securities;
(3) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(4) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of a Tax Event or an Investment Company Event; provided
that the Administrative Trustees (and Special Trustee, if any) shall consult
with the Depositor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Tax Event or Investment Company
Event;
(5) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(6) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the Securities;
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(7) 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 3.08(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(8) 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;
(9) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(10) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(11) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(12) to act as, or appoint another Person to act as, Registrar,
Conversion Agent, Paying Agent, Tender Agent and transfer agent for the
Securities;
(13) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(14) 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;
(15) to take all action that 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 Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
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(16) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.06, including, but not limited to:
(1) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(2) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation or partnership; and
(3) cooperating with the Debenture Issuer to ensure that
the 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 Holders;
and
(17) 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 Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth in
this Section 3.06 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.08.
Any expenses incurred by the Administrative Trustee (or the
Special Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by
the Debenture Issuer.
The Administrative Trustees shall take all action on behalf of
the Trust that are not specifically required by this Declaration to be taken by
any other Trustee.
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Section 1.15 Prohibition of Actions by the Trust and the
Trustees. (a The Trust shall not, and the Trustees (including the Property
Trustee) on behalf of the Trust shall not, 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:
(1) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(2) acquire any assets other than as expressly
provided herein;
(3) possess Trust property for other than a Trust
purpose;
(4) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(5) 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;
(6) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(7) other than as provided in the Declaration or Annex I
hereto, (A) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under Section
5.14 of the Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Debentures shall be due and
payable, or (D) consent to any amendment, modification or termination of
the Indenture or the Debentures where such consent shall be required
unless, in the case of each action described in clause (A), (B), (C) or
(D), the Trust shall have received an opinion of a nationally recognized
independent counsel experienced in such matters 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
classified as a grantor trust.
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Section 1.16 Powers and Duties of the Property Trustee. (a) The
legal title to the Debentures shall be owned by and held of record in the name
of the Property Trustee in trust for the benefit of the Holders of the
Securities. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.06. To the fullest
extent permitted by law, such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Debentures have been
executed and delivered.
(1) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(2) The Property Trustee shall:
(1) establish and maintain a segregated non-interest
bearing trust 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 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 Holders of the Common Securities
from the Property Trustee Account in accordance with Section 6.01. Funds
in the Property Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration.
(2) engage in such ministerial activities as so directed
and as shall be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(3) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed as shall be
necessary or appropriate to effect the distribution of the Debentures to
Holders of Securities upon the occurrence of certain special events (as
may be defined in the terms of the Securities) arising from a change in
law or a change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
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(3) 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.
(4) 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 or the Trust Indenture Act;
provided, however, that if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Depositor as
issuer of the Debentures to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
institute a legal proceeding directly, subject to the terms of the Indenture
(including the subordination provisions set forth in Article XII thereof), for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Securities. In connection with such Direct
Action, the Holders of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made by the
Depositor to such Holder of Preferred Securities in such Direct Action. In
addition, if the Property Trustee fails to enforce its rights under the
Debentures (other than rights arising from an Event of Default described in the
immediately preceding sentence) after any Holder of Preferred Securities shall
have made a written request to the Property Trustee to enforce such rights, such
Holder of Preferred Securities may, to the fullest extent permitted by law,
institute a direct action to enforce the rights of the Property Trustee or any
other Person. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(5) The Property Trustee shall not resign as a Trustee unless
either:
(1) 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
(2) a Successor Property Trustee has been appointed and
has accepted that appointment in accordance with Section 5.06.
(6) The Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for the benefit of
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Holders of the Securities, enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of such Securities.
(7) The Property Trustee shall act as the initial Paying Agent
and Registrar to pay Distributions, redemption payments or liquidation payments
on behalf of the Trust with respect to all 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 Administrative Trustees at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the
Administrative Trustees. The Paying Agent may resign upon 30 days' written
notice to the Property Trustee, the Administrative Trustees and the Depositor.
(8) Subject to this Section 3.08, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
The Property Trustee must exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.03.
Section 1.17 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 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 2.06), 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 its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(1) 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:
(1) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(1) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
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Declaration and in 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 in the Securities, and no implied covenants or obligations
shall be read into this Declaration or the Securities against
the Property Trustee; and
(2) 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 (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated
therein);
(2) 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 Property Trustee was
negligent in ascertaining the pertinent facts;
(3) 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 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;
(4) 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;
(5) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the 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
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account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and the Trust
Indenture Act;
(6) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency
of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(7) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Depositor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.08(c)(i) and except to the extent otherwise required by law;
and
(8) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Declaration, nor shall
the Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
Section 1.18 Certain Rights of Property Trustee. (a) Subject to
the provisions of Section 3.09:
(1) the Property Trustee may rely conclusively and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties;
(2) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(3) 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, request and
rely upon an
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Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative Trustees;
(4) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(5) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion,
such counsel may be counsel to the Depositor 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;
(6) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Property Trustee security satisfactory to the Property
Trustee, against the costs, expenses (including its 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 in writing by the Property Trustee, provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(7) 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, security, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(8) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
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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;
(9) 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 and 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;
(10) 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 which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
acting in accordance with such instructions;
(11) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(12) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(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
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right, power, duty or obligation. No permissive power or authority available to
the Property Trustee shall be construed to be a duty.
Section 1.19 Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.02, 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 Administrative Trustees or
the Property Trustee (except as required by the Business Trust Act) described in
this Declaration. Except as set forth in Section 5.02, 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 1.20 Execution of Documents. Except as otherwise required
by applicable law, any Administrative Trustee is authorized to execute on behalf
of the Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.06; provided that, the registration
statement referred to in Section 3.06(b)(i), including any amendments thereto,
shall be signed by a majority of the Administrative Trustees.
Section 1.21 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 Depositor, 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, the Debentures or the Securities.
Section 1.22 Duration of Trust. The Trust, unless dissolved
pursuant to the provisions of Article VIII hereof, shall exist until February 1,
2035.
Section 1.23 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 Person, except as
described in Section 3.15(b) and (c) of this Declaration or paragraph 3 of Annex
I.
(1) The Trust may, with the consent of a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State or the District of Columbia; provided that:
(1) if the Trust is not the surviving entity, the
successor entity (the "Successor Entity") either:
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(1) expressly assumes all of the
obligations of the Trust under the Securities; or
(2) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") as long as the Successor
Securities rank, with respect to participation in the profits and
Distributions or in the assets of the Successor Entity at least
as high as the Preferred Securities rank with respect to
participation in the profits and dividends or in the assets of
the Trust;
(2) the Debenture Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Debentures;
(3) to the extent the Preferred Securities are listed on
any national securities exchange or with another organization for
listing or quotation, the Preferred Securities or any Successor
Securities shall be so listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities
exchange or with any other organization on which the Preferred
Securities are then listed or quoted;
(4) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(5) such merger, consolidation, amalgamation or
replacement does not adversely affect the powers, preferences and other
special rights of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect;
(6) such Successor Entity has a purpose
substantially identical and limited to that of the Trust;
(7) prior to such merger, consolidation, amalgamation or
replacement, the Depositor has received an opinion of a nationally
recognized independent counsel (reasonably acceptable to the Property
Trustee) to the Trust experienced in such matters to the effect that:
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(1) following such merger, consolidation,
amalgamation or replacement, the Trust or the Successor Entity
will continue to be treated as a grantor trust for United States
federal income tax purposes;
(2) following such merger, consolidation,
amalgamation or replacement, neither the Depositor nor the
Successor Entity will be required to register as an Investment
Company;
(3) such merger, consolidation, amalgamation or
replacement will not adversely affect the limited liability of
the Holders of the Securities (including any Successor
Securities);
(8) the Depositor or any permitted successor or assignee
directly or indirectly owns all the common securities of such successor
entity and provides a guarantee to the Holders of the Successor
Securities with respect to the Successor Entity having substantially the
same terms as the Preferred Securities Guarantee; and
(9) such merger, consolidation, amalgamation, replacement
or lease is not a taxable event for the Holders of the Preferred
Securities.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
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
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 to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
Depositor
Section 1.24 Depositor's Purchase of Common Securities. On the
Closing Date and any Optional Closing Date the Depositor will purchase an amount
of Common Securities issued by the Trust such that the aggregate liquidation
amount of
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such Common Securities purchased by the Depositor shall at such date equal at
least 3% of the total capital of the Trust.
Section 1.25 Responsibilities of the Depositor. In connection
with the issue and sale of the Preferred Securities, the Depositor shall have
the exclusive right and responsibility to engage in the following activities:
(1) to prepare the Offering Circular and to prepare for filing by
the Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;
(2) to determine the States and foreign jurisdictions, if any, in
which to take appropriate action to qualify or register for sale all or part of
the Preferred Securities and to do any and all such acts (including at the time
of the Remarketing), 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 Depositor deems
necessary or advisable in order to comply with the applicable laws of any such
States and foreign jurisdictions;
(3) if so determined by the Depositor, to prepare for filing by
the Trust an application to PORTAL, the New York Stock Exchange or any other
national stock exchange or the NASDAQ National Market for listing or quotation
of the Preferred Securities (including at the time of the Remarketing);
(4) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities (both at the time of their original issuance and at the time of the
Remarketing, if required) under Section 12 of the Exchange Act, including any
amendments thereto, if the Depositor in its sole discretion determines such a
filing is necessary or appropriate; and
(5) to negotiate the terms of the Purchase Agreement, the
Registration Rights Agreement and the Remarketing Agreement and other related
agreements providing for the sale of the Preferred Securities (both at the time
of their original issuance and at the time of the Remarketing).
Section 1.26 Guarantee of Payment of Trust Obligations.
(1) Subject to the terms and conditions of this Section 4.03, the
Depositor hereby irrevocably and unconditionally guarantees, to the extent set
forth in the Securities Guarantees and subject to the terms of the Indenture
(including the subordination provisions set forth in Article XII thereof), to
each Person to whom the Trust is now
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or hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations to such Beneficiaries.
(2) The agreement of the Depositor in Section 4.03(a) is intended
to be for the benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
(3) The agreement of the Depositor set forth in Section 4.03(a)
shall terminate and be of no further force and effect upon the later of (a) the
date on which full payment has been made of all amounts payable to all Holders
of all the Preferred Securities (whether upon redemption, liquidation, exchange
or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
Trustees
Section 1.27 Number of Trustees. The number of Trustees shall
initially be five (5), consisting of three (3) Administrative Trustees, the
Delaware Trustee and the Property Trustee, and:
(1) at any time before the issuance of any Securities, the
Depositor may, by written instrument, increase or decrease the number of
Trustees; and
(2) after the issuance of any Securities:
(1) the number of Trustees may be increased or decreased,
except as provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with
respect to the Special Trustee, 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, however,
that, the number of Trustees shall in no event be less than two (2);
provided, further, that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has its principal
place of business in the State of
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Delaware; (2) there shall be at least one Trustee who is an employee or
officer of, or is affiliated with the Depositor (an "Administrative
Trustee"); and (3) one Trustee shall be the Property Trustee for so long
as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee
if it meets the applicable requirements.
(2) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation amount of the
Preferred Securities appoint a Special Trustee in accordance with
Section 5.06(a)(ii).
Section 1.28 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. The initial Delaware Trustee shall be The Bank of New York
(Delaware).
Section 1.29 Property Trustee; Eligibility. (a) There shall at
all times be one Trustee which shall act as Property Trustee which shall:
(1) not be an Affiliate of the Depositor; and
(2) 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 5.03(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.
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(2) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.06(e).
(3) 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 Holder of the Common Securities (as if it were the
obligor referred to in 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.
(4) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(5) The initial Property Trustee shall be The Bank of New York.
Section 1.30 Qualifications of Administrative Trustees and
Delaware Trustee Generally. Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall act
through one or more Authorized Officers.
Section 1.31 Initial Trustees. The initial Administrative
Trustees shall be:
Peter Cartwright
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Ann B. Curtis
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Thomas R. Mason
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
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The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Section 1.32 Appointment, Removal and Resignation of Trustees.
Except as provided otherwise in this Section 5.06, Trustees may be appointed or
removed without cause at any time:
(1) until the issuance of any Securities, by
written instrument executed by the Depositor; and
(2) after the issuance of any Securities:
(1) other than in respect to a Special Trustee, 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, unless a Debenture Event of Default
shall have occurred and be continuing, in which event the
Property Trustee and the Delaware Trustee may only be removed by
the Holders of a Majority in liquidation amount of the Preferred
Securities, voting as a class at a meeting of the Holders of the
Preferred Securities; and
(2) if an Appointment Event has occurred and is
continuing, one (1) additional trustee (the "Special Trustee"),
who shall have the same rights, powers and privileges as an
Administrative Trustee, may be appointed by vote of the Holders
of a Majority in liquidation amount of the Preferred Securities,
voting as a class at a meeting of the Holders of the Preferred
Securities, and such Special Trustee may only be removed
(otherwise than by the
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operation of Section 5.06(e)), by vote of the Holders of a
Majority in liquidation amount of the Preferred Securities
voting as a class at a meeting of the Holders of the Preferred
Securities. (1) (2) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.06 until a
successor Property Trustee meeting the requirements of Section
5.03 (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 Administrative
Trustees and the Depositor.
(3) The Depositor shall remove the Property Trustee by written
instrument upon:
(1) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Property Trustee as bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Property Trustee under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Property Trustee or of any substantial
part of its property or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(2) the institution by the Property Trustee of proceedings
to be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Property Trustee or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due and its willingness to be adjudicated a bankrupt, or
the taking of corporate action by the Property Trustee in furtherance of
any such action.
The Depositor shall appoint a Successor Property Trustee within 60 days of such
an event.
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(4) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.06(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (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 Trustees and the Depositor.
(5) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. 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 Depositor and the Trust,
which resignation shall take effect upon such delivery or upon such later date
as is specified therein; provided, however, that:
(1) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(1) until 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, the Depositor and the resigning Property Trustee; or
(2) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed
to the Holders of the Securities;
(2) 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,
the Depositor and the resigning Delaware Trustee; and
(3) no such resignation of a Special Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Trustee to the Depositor and the Trust or
such later date specified in such instrument during which period the
Holders of the Preferred Securities shall have the right to appoint a
successor Special Trustee as provided in this Section 5.06.
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(6) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.
(7) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Depositor and the Trust of an
instrument of resignation or removal, the resigning Property Trustee or Delaware
Trustee, resigning or being removed 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.
(8) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
Section 1.33 Vacancies among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.06.
Section 1.34 Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of a
Administrative Trustee in accordance with Section 5.06, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.
Section 1.35 Meetings. Meetings of the Administrative Trustees
shall be held from time to time upon the call of any Administrative Trustee.
Regular meetings of the Administrative Trustees may be held at a time and place
fixed by resolution of the Administrative Trustees. Notice of any meetings of
the Administrative Trustees shall be hand delivered or otherwise delivered in
writing (including by facsimile or overnight courier) not less than 24 hours
before such meeting. Notices shall contain a brief statement of the time, place
and anticipated purposes of the meeting. The presence
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(whether in person or by telephone) of an Administrative Trustee at a meeting
shall constitute a waiver of notice of such meeting except where an
Administrative Trustee attends a meeting for the express purpose of objecting to
the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Administrative Trustees may be taken at a meeting by vote of a
majority of the Administrative 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 and without prior notice by the
unanimous written consent of the Administrative Trustees.
In the event there is only one Administrative Trustee, any and
all action of such Administrative Trustee shall be evidenced by a written
consent of such Administrative Trustee. In the event a Special Trustee is
holding office pursuant to Section 5.06, such Special Trustee shall have the
same rights as an Administrative Trustee with respect to notice and
participation in a meeting of the Administrative Trustees.
Section 1.36 Delegation of Power.
(1) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.06, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(2) the Administrative 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 Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
Section 1.37 Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any
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paper or any further act on the part of any of the parties hereto other than as
required by applicable law.
ARTICLE VI
Distributions
Section 1.38 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 the terms attached as
Annex I hereto. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Amounts (as defined in the Indenture)) premium and principal on the
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 (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
Issuance of Securities
Section 1.39 General Provisions Regarding Securities.
(1) The Administrative Trustees shall on behalf of the Trust
issue one class of convertible preferred securities, designated as Remarketable
Term Income Deferrable Equity Securities (HIGH TIDES)_, liquidation amount $50
per HIGH TIDES, representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), having such terms as are set forth in Annex
I (including as such terms may be modified in accordance with the provisions of
the Remarketing Agreement) and one class of convertible common securities,
liquidation amount $50, representing undivided beneficial interests in the
assets of the Trust (the "Common Securities"), having such terms as are set
forth in Annex I. On the Reset Date and as contemplated by the Remarketing
Agreement, the Trust may also issue securities having Term Provisions to be set
by the Remarketing Agent in accordance with the terms of the Remarketing
Agreement. The Trust shall have no securities or other interests in the assets
of the Trust other than the Preferred Securities and the Common Securities. The
Trust shall issue no Securities in bearer form.
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(2) 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.
(3) 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 10.01 with respect to the
Common Securities.
(4) 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.
(5) 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 covenanted to treat the Debentures as
indebtedness and the Securities as evidence of an indirect beneficial ownership
interest in the Debentures.
Section 1.40 Execution and Authentication.
(1) The Securities shall be signed on behalf of the Trust by one
Administrative Trustee. In case any Administrative Trustee who shall have signed
any of the Securities shall cease to be such Administrative Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Administrative Trustee; and any Securities may be
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees, although at
the date of the execution and delivery of the Declaration any such person was
not such an Administrative Trustee.
(2) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue by
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executing the Property Trustee's certificate of authentication contained in the
form of Preferred Securities attached hereto as Exhibit A-1. The aggregate
number of Preferred Securities outstanding at any time shall not exceed the
number set forth in the terms in Annex I hereto except as provided in Sections
7.06 and 7.07.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Depositor or an Affiliate.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the Trustee
in good faith shall determine that such action would expose the Trustee to
personal liability to existing Holders.
Section 1.41 Form and Dating. The Preferred Securities and the
Property Trustee's certificate of authentication shall be substantially in the
form of Exhibit A-1 and the Common Securities shall be substantially in the form
of Exhibit A-2, each of which is hereby incorporated in and expressly made a
part of this Declaration. Certificates may be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by their execution thereof. The Securities
may have letters, numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Depositor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Depositor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the Trust
pursuant to a Purchase Agreement relating to the Preferred Securities, dated
January 25, 2000, among the Trust, the Depositor and the Purchasers named
therein (the "Purchase Agreement").
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(1) Global Securities. Preferred Securities offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
initially issued in the form of one or more permanent global Securities in
definitive, fully registered form without distribution coupons with the
appropriate global legends and Restricted Securities Legend set forth in Exhibit
A-1 hereto (each, a "Rule 144A Global Preferred Security"), which shall be
deposited on behalf of the purchasers of the Preferred Securities represented
thereby with the Property Trustee, at its New York office, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Trust and authenticated by the Property Trustee
as provided herein. The number of Preferred Securities represented by the Rule
144A Global Preferred Security may from time to time be increased or decreased
by adjustments made on the records of the Property Trustee and the Depositary or
its nominee as hereinafter provided.
(2) Book-Entry Provisions. This Section 7.03(b) shall apply only
to the Rule 144A Global Preferred Securities and such other Preferred Securities
in global form as may be authorized by the Trust to be deposited with or on
behalf of the Depositary.
An Administrative Trustee on behalf of the Trust shall execute
and the Property Trustee shall, in accordance with this Section 7.03,
authenticate and deliver initially one or more Rule 144A Global Preferred
Securities that (a) shall be registered in the name of Cede & Co. or other
nominee of the Depositary and (b) shall be delivered by the Trustee to such
Depositary or pursuant to the Depositary's written instructions or held by the
Trustee as custodian for the Depositary.
Unless and until definitive, fully registered certificated
Preferred Securities have been issued to the Preferred Security Beneficial
Owners pursuant to Section 7.03:
(1) the provisions of this Section 7.03 shall be
in full force and effect;
(2) the Trust, the Trustees, the Registrar and the Paying
Agent shall be entitled to deal with the Depositary for all purposes of
this Declaration (including the payment of Distributions on the Global
Preferred Security and receiving approvals, votes or consents hereunder)
as the Holder of the Preferred Securities and the sole holder of the
Global Preferred Security and shall have no obligation to the Preferred
Security Beneficial Owners;
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(3) to the extent that the provisions of this Section 7.03
conflict with any other provisions of this Declaration, the provisions
of this Section 7.03 shall control; and
(4) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Depositary and/or the Participants and the
Depositary shall receive and transmit payments of Distributions on the
Global Preferred Securities to such Participants. The Depositary will
make book-entry transfers among the Participants and receive and
transmit payments of Distributions on the Global Preferred Securities to
such Participants; provided, that solely for the purposes of determining
whether the Holders of the requisite amount of Preferred Securities have
voted on any matter provided for in this Declaration, so long as
Definitive Preferred Security Certificates have not been issued, the
Trustees may conclusively rely on, and shall be protected in relying on,
any written instrument (including a proxy) delivered to the Trustees by
the Depositary setting forth the Preferred Security Beneficial Owners'
votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.
Members of, or participants in, the Depositary ("Participants")
shall have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Depositary or by the Property Trustee as
the custodian of the Depositary or under such Global Preferred Security, and the
Depositary may be treated by the Trust, the Property Trustee and any agent of
the Trust or the Property Trustee as the absolute owner of such Global Preferred
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Trust, the Property Trustee or any agent of the Trust
or the Property Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Participants, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Preferred Security.
(3) Certificated Securities. Except as provided in Section
7.03(d), owners of beneficial interests in the Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities.
(4) Subject to Section 9.05, a Global Preferred Security
deposited with the Depositary or with the Property Trustee as custodian for the
Depositary pursuant to this Section 7.03 shall be transferred to the beneficial
owners thereof in the form of
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certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Depositor that it is unwilling or
unable to continue as Depositary for such Global Preferred Security or if at any
time such Depositary ceases to be a "clearing agency" registered under the
Exchange Act, at a time when the Depositary is required to be so registered to
act as such depositary, (ii) the Administrative Trustees decide in their sole
discretion determines that such Global Preferred Security shall be so
exchangeable, or (iii) an Event of Default has occurred and is continuing.
(5) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Preferred Securities of authorized denominations in the form of certificated
Preferred Securities. Any portion of a Global Preferred Security transferred
pursuant to this Section shall be registered in such names and such amounts as
the Depositary shall direct. Any Preferred Security in the form of certificated
Preferred Securities delivered in exchange for an interest in the Rule 144A
Global Preferred Security shall, except as otherwise provided by Section 9.02,
bear the Restricted Securities Legend set forth in Section 9.02(h).
(6) Subject to the provisions of Section 7.03(e), the registered
holder of a Global Preferred Security may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interests through
Participants, to take any action which a holder is entitled to take under this
Declaration or the Securities.
(1)
(7) In the event of the occurrence of any of the events specified
in Section 7.03(d), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without distribution coupons.
Section 1.42 Registrar, Paying Agent, Conversion Agent and Tender
Agent. The Administrative Trustees shall maintain in the Borough of Manhattan,
City of New York, State of New York (i) an office or agency where Preferred
Securities may be presented for registration of transfer or for exchange
("Registrar"), (ii) an office or agency where Preferred Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Administrative Trustees may appoint the Registrar, the Paying
Agent and the Conversion Agent and may appoint one or more co-Registrars, one or
more additional
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paying agents and one or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional conversion
agent. The Administrative Trustees may change any Paying Agent, Registrar,
co-Registrar or Conversion Agent without prior notice to any Holder; provided
that the Administrative Trustees shall provide notice of such change to all
Holders promptly thereafter. The Administrative Trustees shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Administrative Trustees fail to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Property Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar, or Conversion Agent. The Trust shall act as Paying Agent, Registrar,
co-Registrar, and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar,
Paying Agent, and Conversion Agent for the Preferred Securities. The Property
Trustee shall also serve as Tender Agent and shall have the responsibilities of
such described in the Remarketing Agreement for so long as the Debentures are
held by the Property Trustee.
Section 1.43 Paying Agent to Hold Money in Trust. The Trust shall
require each Paying Agent other than the Property Trustee to agree in writing
that the Paying Agent will hold in trust for the benefit of Holders or the
Property Trustee all money held by the Paying Agent for the payment of principal
or distribution on the Securities, and will notify the Property Trustee if there
are insufficient funds. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to the Property
Trustee. The Administrative Trustees at any time may require a Paying Agent to
pay all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Depositor or an Affiliate of the
Trust or the Depositor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
Section 1.44 Replacement Securities. If the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Trust or in the case of the
Preferred Securities to the Property Trustee, an Administrative Trustee on
behalf of the Trust shall issue and the Property Trustee shall authenticate a
replacement Security if the Property Trustee's and such Administrative Trustee's
requirements, as the case may be, are met. If required by the Property Trustee
or such Administrative Trustee, an indemnity bond must be sufficient in the
judgment of both to protect the Trustees, the Depositor or any authenticating
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agent from any loss which any of them may suffer if a Security is replaced. The
Depositor may charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Depositor pursuant to Article IV hereof, the Depositor in its discretion
may, instead of the Trust's issuing a new Security, pay or purchase such
Security, as the case may be.
Every replacement Security is an additional obligation of the
Trust.
Section 1.45 Outstanding Preferred Securities. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Preferred Security is replaced, paid or purchased pursuant
to Section 7.06 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a protected purchaser (as such term is used in Section 8-405
of the Delaware Uniform Commercial Code).
If Preferred Securities are considered paid in full in accordance
with the terms of this Declaration, they cease to be outstanding and
Distributions on them ceases to accumulate.
A Preferred Security does not cease to be outstanding because one
of the Trust, the Depositor or an Affiliate of the Depositor holds the Security.
Section 1.46 Preferred Securities in Treasury. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Depositor or an Affiliate of the Depositor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the purposes of
determining whether the Property Trustee shall be fully protected in relying on
any such direction, waiver or consent, only Securities which the Property
Trustee knows are so owned shall be so disregarded.
Section 1.47 Temporary Securities. Until definitive Securities
are ready for delivery, the Trust may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust
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shall prepare and deliver to the Property Trustee Preferred Securities in
certificated form (other than in the case of Preferred Securities in global
form) and thereupon any or all temporary Preferred Securities (other than any
such Preferred Securities in global form) may be surrendered in exchange
therefor, at the office of the Registrar, and the Property Trustee shall
authenticate and deliver an equal aggregate liquidation amount of definitive
Preferred Securities in certificated form in exchange for temporary Preferred
Securities (other than any such Preferred Securities in global form).
Section 1.48 Cancellation. Any Administrative Trustee on behalf
of the Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall
forward to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall return such canceled Preferred Securities to the
Administrative Trustees. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has converted.
ARTICLE VIII
Termination of Trust
Section 1.49 Dissolution of Trust. (a) The Trust shall dissolve
upon the earliest to occur of the following:
(1) the bankruptcy of the Holder of the Common
Securities or the Depositor;
(2) the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Depositor; the revocation of the charter of the Holder of the Common
Securities or the Depositor and the expiration of 90 days after the date
of revocation without a reinstatement thereof;
(3) a written direction of the Depositor to dissolve the
Trust and distribute a Like Amount of Debentures to Holders of the
Securities in accordance with the terms of the Securities;
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(4) 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;
(5) the expiration of the term of the Trust as set forth
in Section 3.14 hereof;
(6) the entry of a decree of judicial dissolution
of the Holder of the Common Securities, the Depositor or the Trust;
(7) upon distribution of the Common Stock of the
Depositor to Holders of all outstanding Securities upon conversion
of all such Securities; or
(8) before the issuance of any Securities, with
the consent of all the Administrative Trustees and the Depositor.
(2) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a), and after the completion of the winding up of
the affairs of the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(3) The provisions of Section 3.09 and Article X shall survive
the termination of the Trust.
ARTICLE IX
Transfer and Exchange
Section 1.50 General.
(1) When Preferred Securities are presented to the Registrar or a
co-Registrar with a request to register a transfer or to exchange them for an
equal number of Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers and
exchanges, the Administrative Trustees shall prepare and one Administrative
Trustee shall execute and the Property Trustee shall authenticate Preferred
Securities at the Registrar's request.
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(2) 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. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
Subject to this Article IX, the Depositor and any Related Party
may only transfer Common Securities (i) in accordance with Article VIII of the
Indenture, or (ii) to the Depositor or a Related Party of the Depositor;
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:
(1) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(2) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(3) The Administrative Trustees shall provide for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued and authenticated by the Property Trustee in
the name of the designated transferee or transferees. Every Security surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Administrative Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each Security
surrendered for registration of transfer shall be cancelled in accordance with
Section 7.10. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
(4) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
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(5) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Preferred
Securities surrendered upon such transfer or exchange.
Section 1.51 Transfer Procedures and Restrictions.
(1) General. Subject to Sections 9.02(b) and 9.02(h)(ii), if
Preferred Securities are issued upon the transfer, exchange or replacement of
Preferred Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted Securities
Legend on Preferred Securities, the Preferred Securities so issued shall bear
the Restricted Securities Legend, or the Restricted Securities Legend shall not
be removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which may include an opinion of
counsel licensed to practice law in the State of New York, as may be reasonably
required by the Depositor, that (i) neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or (ii) that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Property Trustee, at the written
direction of the Trust, shall authenticate and deliver Preferred Securities that
do not bear the Restricted Securities Legend.
(2) Transfers After Effectiveness of Shelf Registration
Statement. After the effectiveness of a Shelf Registration Statement for any
Preferred Securities, all requirements pertaining to Restricted Securities
Legends on any Preferred Security included within such Shelf Registration
Statement will cease to apply, and beneficial interests in a Preferred Security
in global form without Restricted Securities Legends will be available to
transferees of such Preferred Securities upon directions to transfer such
Holder's beneficial interest in the Rule 144A Global Preferred Security. After
the effectiveness of the Shelf Registration Statement, an Administrative Trustee
on behalf of the Trust shall execute and the Property Trustee shall authenticate
a Preferred Security in global form without the Restricted Securities Legend
(the "Unrestricted Global Preferred Security") to deposit with the Depositary to
evidence transfers of beneficial interests from the Rule 144A Global Preferred
Security.
(3) Transfer and Exchange of Definitive Preferred Securities.
When Definitive Preferred Securities are presented to the Registrar or
co-Registrar
(x) to register the transfer of such
Definitive Preferred Securities; or
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(y) to exchange such Definitive Preferred
Securities for an equal number of Definitive
Preferred Securities of another denomination;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing.
(2) in the case of Definitive Preferred Securities that
are Restricted Preferred Securities, are being transferred or exchanged
(x) pursuant to an effective registration statement under the Securities
Act or (y) pursuant to, and in compliance with, clause (A) or (B) below:
(1) if such Restricted Preferred Securities are
being delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, such Holder shall
deliver a certification to that effect (in the form set forth on
the reverse of the Preferred Security); or
(2) if such Restricted Preferred Securities are
being transferred pursuant to an exemption from registration in
accordance with Rule 144A under the Securities Act such Holder
shall deliver: (i) a certification to that effect (in the form
set forth on the reverse of the Preferred Security) and (ii) if
the Trust or Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the restrictions
set forth in the Restricted Securities Legend.
Definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act must be delivered to QIBs in
the form of a beneficial interest in the Rule 144A Global Preferred Security in
accordance with Section 9.02(d) except as otherwise provided in Section 7.03(d).
(4) Restrictions on Transfer of a Definitive Preferred Security
for a Beneficial Interest in a Global Preferred Security. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon
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satisfaction of the requirements set forth below. Upon receipt by the Property
Trustee of a Definitive Preferred Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Property
Trustee, together with written instructions directing the Property Trustee to
make, or to direct the Depositary to make, an adjustment on its books and
records with respect to such Global Preferred Security to reflect an increase in
the number of the Preferred Securities represented by the Global Preferred
Security, then the Property Trustee shall cancel such Definitive Preferred
Security and cause, or direct the Depositary to cause, the aggregate number of
Preferred Securities represented by the Global Preferred Security to be
increased accordingly. If no Global Preferred Securities are then outstanding,
an Administrative Trustee on behalf of the Trust shall execute and the Property
Trustee shall authenticate, upon written order of any Administrative Trustee, an
appropriate number of Preferred Securities in global form.
(5) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(6) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security. Definitive Preferred Securities
issued in exchange for a beneficial interest in a Global Preferred Security
pursuant to this Section 9.02(f) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the Property
Trustee. The Property Trustee shall deliver such Preferred Securities to the
Persons in whose names such Preferred Securities are so registered in accordance
with the instructions of the Depositary.
(7) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
(8) Legend.
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(1) Except as permitted by the following paragraph (ii),
each Preferred Security certificate evidencing the Global Preferred
Securities and the Definitive Preferred Securities (and all Preferred
Securities issued in exchange therefor or substitution thereof) shall
bear a legend the "Restricted Securities Legend") in substantially the
following form:
"EACH OF THE PREFERRED SECURITIES (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF
THE PREFERRED SECURITIES AND ANY DEBENTURES ISSUED UPON EXCHANGE FOR THE
PREFERRED SECURITIES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF EACH OF THE PREFERRED SECURITIES
IS HEREBY NOTIFIED THAT THE SELLER OF EACH OF THE PREFERRED SECURITIES
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS PREFERRED SECURITY AGREES FOR THE BENEFIT OF
THE ISSUER AND THE COMPANY THAT (A) THIS PREFERRED SECURITY AND ANY
DEBENTURES OR COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii)
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
EACH OF THE PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE."
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(2) Upon any sale or transfer of a Restricted Preferred
Security (including any Restricted Preferred Security represented by a
Global Preferred Security) pursuant to Rule 144 under the Securities Act
or an effective registration statement under the Securities Act the
Registrar shall permit the Holder thereof to exchange such Restricted
Preferred Security for an interest in the Unrestricted Global Preferred
Security.
(9) Cancellation or Adjustment of Global Preferred Security. At
such time as all beneficial interests in a Global Preferred Security have either
been exchanged for Definitive Preferred Securities to the extent permitted by
the Declaration or redeemed, repurchased or cancelled in accordance with the
terms of this Declaration, such Global Preferred Security shall be returned to
the Depositary for cancellation or retained and cancelled by the Property
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Preferred Security is exchanged for Definitive Preferred Securities,
Preferred Securities represented by such Global Preferred Security shall be
reduced and an adjustment shall be made on the books and records of the Property
Trustee (if it is then the Registrar for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Registrar, to reflect such reduction.
(10) No Obligation of the Property Trustee.
(1) The Property Trustee shall have no responsibility or
obligation to any Preferred Security Beneficial Owner, a Participant in
the Depositary or other Person with respect to the accuracy of the
records of the Depositary or its nominee or of any Participant thereof,
with respect to any ownership interest in the Preferred Securities or
with respect to the delivery to any Participant, Preferred Security
Beneficial Owner or other Person (other than the Depositary) of any
notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Preferred Securities. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Preferred Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Preferred Security).
The rights of Preferred Security Beneficial Owners in any Global
Preferred Security shall be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Property Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Depositary or agent thereof
with respect to its Participants and any Preferred Security Beneficial
Owners.
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(2) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in any
Preferred Security (including any transfers between or among Depositary
Participants or Preferred Security Beneficial Owners in any Global
Preferred Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and to
do so if and when expressly required by, the terms of this Declaration,
and to examine the same to determine substantial compliance as to form
with the express requirements hereof.
Section 1.52 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 Trust, the Property Trustee, the Registrar or a
co-Registrar shall have actual or other notice thereof.
Section 1.1
Section 1.53 Notices to Depositary. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary and shall have no
notice obligations to the Preferred Security Beneficial Owners.
Section 1.54 Appointment of Successor Depositary. If the
Depositary elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Depositary with respect to such Preferred
Securities.
ARTICLE X
Limitation of Liability of Holders of Securities, Trustees or Others
Section 1.55 Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantee and the terms of the Securities, the
Depositor shall not be:
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(1) 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; or
(2) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(2) The Holder of the Common Securities 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.
(3) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
Section 1.56 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, negligence) or willful
misconduct with respect to such acts or omissions.
(1) 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 1.57 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
extent that they restrict the duties and liabilities of an Indemnified Person
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otherwise existing at law or in equity (other than the 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.
(1) Unless otherwise expressly provided herein:
(1) whenever a conflict of interest exists or
arises between an Indemnified Person and any Covered Person; or
(2) 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 term 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.
(2) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision
(1) 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
(2) 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 1.58 Indemnification. (a) To the fullest extent permitted
by applicable law, the Debenture Issuer shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any
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kind or nature whatsoever incurred by such 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, negligence) or willful
misconduct with respect to such acts or omissions. The Debenture Issuer shall be
entitled to participate in the defense of any action arising hereunder and, to
the extent it may wish, assume the defense thereof, with counsel satisfactory to
such Indemnified Persons (who shall not, except with the consent of the
Indemnified Persons, be counsel to the Debenture Issuer). Upon assuming such
defense, the Debenture Issuer shall not be liable for any legal or other
expenses subsequently incurred by such Indemnified Persons in connection with
the defense thereof, other than reasonable costs of investigation. The Debenture
Issuer shall not, without the prior written consent of the Indemnified Persons,
effect any settlement of any pending or threatened action in respect of which
any Indemnified Person is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Person unless such settlement (i)
includes an unconditional release of such Indemnified Person from all liability
on any claims that are the subject matter of such action and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of an Indemnified Person.
(1) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
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 indemnification shall survive
the termination of this Declaration.
Section 1.59 Outside Businesses. Any Covered Person, the
Depositor, the Delaware Trustee and the Property Trustee (subject to Section
5.03(c)) 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. None of the Depositor, any Covered Person, the Delaware Trustee,
the Administrative Trustees or the Property Trustee shall be obligated to
present
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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 Depositor, 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 Depositor or any Affiliate of the Depositor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Depositor or its Affiliates.
ARTICLE XI
Accounting
Section 1.60 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 1.61 Certain Accounting Matters.
(1) At all times during the existence of the Trust, the
Administrative 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 by a firm of independent certified public accountants
selected by the Administrative Trustees.
(2) The Administrative 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;
(3) The Administrative Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, 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
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later date, the Administrative Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the Trust.
(4) The Administrative 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 Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
Section 1.62 Banking. The Administrative Trustees on behalf of
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 the 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 Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
Section 1.63 Withholding. The Trust and the Administrative
Trustees on behalf of the Trust shall comply with all withholding requirements
under United States federal, state and local law. The Administrative Trustees on
behalf of the Trust shall request, and the Holders shall provide to the
Administrative Trustees, 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 Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling the Trust's withholding obligations. The Administrative Trustees
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 overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Administrative
Trustees on behalf of the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
Amendments and Meetings
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Section 1.64 Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
be amended from time to time by the Depositor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders of the Securities,
(i) to cure any ambiguity, correct or supplement any provision in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to ministerial matters or questions arising under
the Declaration, which shall not be inconsistent with the other provisions of
the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
not be taxable as a corporation or will be classified for United States federal
income tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any Holder of Securities, and any such
amendments of the Declaration shall become effective when notice thereof is
given to the Holders of the Securities.
(1) Except as provided in (c) below, and the terms of the
Securities, this Declaration may be amended by the Trustees and the Depositor
with (i) the consent of Holders representing not less than a Majority in
liquidation amount of the outstanding Preferred Securities, and (ii) receipt by
the Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status as an "investment
company" under the Investment Company Act.
(2) Without the consent of each Holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
Section 1.65 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 Administrative 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. Except as otherwise set
forth in the terms of the Securities, the Administrative Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 25% in
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liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Administrative Trustees one or more requests 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
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities represented by the Certificates so specified
shall be counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.
(1) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(1) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days and
not more than 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 and without prior notice if a
consent in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum aggregate
liquidation amount of Securities 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
Administrative Trustees may specify that any written ballot submitted to
the Holders for the purpose of taking any action without a meeting shall
be returned to the Trust within the time specified by the Administrative
Trustees;
(2) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a 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 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
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interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(3) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that
the Administrative Trustees may designate; and
(4) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules of
any stock exchange on which the Preferred Securities are then listed or
trading, provide otherwise, the Administrative 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 1.66 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Depositor at the date of this Declaration, at the Closing Date
and at each Optional Closing Date, if any, and each Successor Property Trustee
represents and warrants to the Trust and the Depositor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
that:
(1) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(2) The execution, delivery and performance by the Property
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and 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
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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).
(3) The execution, delivery and performance of the Declaration by
the Property Trustee do not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(4) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
(e) The Property Trustee satisfies the qualifications set forth
in Section 5.03 and shall not create, incur or assume or suffer to exist any
mortgage, pledge, hypothecation, encumbrance, lien or other change or security
interest upon the Debentures.
Section 1.67 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Depositor at the date of this Declaration, at the Closing Date
and at each Optional Closing Date, if any, and each Successor Delaware Trustee
represents and warrants to the Trust and the Depositor at the time of the
Successor Property Trustee's acceptance of its appointment as Delaware Trustee
that:
(1) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(2) The execution, delivery and performance by the Delaware
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and 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).
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(3) The execution, delivery and performance of the Declaration by
the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(4) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(5) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
(6) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
Registration Rights
Section 14.01. Registration Rights. The Holders of the Preferred
Securities, the Debentures, the Guarantee and the shares of Common Stock of the
Depositor issuable upon conversion of the Securities are entitled to the
benefits of a Registration Rights Agreement.
ARTICLE XV
Miscellaneous
Section 1.68 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:
(1) if given to the Trust, in care of the Administrative Trustees
at the Trust's mailing address set forth below (or such other address as the
Administrative Trustees may give notice of to the Holders of the Securities):
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Calpine Capital Trust II
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Attention: Secretary
(2) 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 Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
(3) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice of to
the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(4) if given to the Holder of the Common Securities, at the
mailing address of the Depositor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Attention: Secretary
(5) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
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
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other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
Section 1.69 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. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust. To the
fullest extent permitted by law, there shall not be applicable to the parties
hereunder or this Declaration any provision of the laws (statutory or common) of
the State of Delaware pertaining to trusts that relate to or regulate, in a
manner inconsistent with the terms hereof (A) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges, (B) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (C) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (D) fees or other sums payable to trustees, officers,
agents, or employees of a trust, (E) the allocation of receipts and expenditures
to income or principal, (F) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets or (G)
the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the trustees hereunder
as set forth or referenced in this Declaration.
Section 1.70 Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
Section 1.71 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 1.72 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 Depositor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
Section 1.73 Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held
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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 1.74 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.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
Peter Cartwright,
as Administrative Trustee
------------------------------------
Ann B. Curtis,
as Administrative Trustee
------------------------------------
Thomas R. Mason,
as Administrative Trustee
------------------------------------
Calpine Corporation,
as Depositor and Debenture Issuer
By:
---------------------------------
Name:
Title:
The Bank of New York,
as Delaware Trustee
By:
---------------------------------
Name:
Title:
The Bank of New York,
as Property Trustee
By:
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Name:
Title:
79
ANNEX I
TERMS OF
Remarketable Term Income Deferrable
Equity Securities (HIGH TIDES_) and
HIGH TIDES Common Securities
Pursuant to Section 7.01 of the Amended and Restated Declaration
of Trust, dated as of January 31, 2000 (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 the Indenture (as defined in the
Declaration) or, if not defined in the Declaration, Indenture or Remarketing
Agreement, as defined in the Offering Circular (as defined in the Declaration):
1. Designation and Number.
(a) "Preferred Securities." 7,200,000 (including 1,200,000 relating to
the exercise of the full amount of the option granted by the Trust) Preferred
Securities of the Trust with an aggregate liquidation preference with respect to
the assets of the Trust of THREE HUNDRED SEVENTY-ONE MILLION ONE HUNDRED
THIRTY-FOUR THOUSAND ONE HUNDRED Dollars ($371,134,100) (including SIXTY-ONE
MILLION EIGHT HUNDRED FIFTY-FIVE THOUSAND SEVEN HUNDRED Dollars ($61,855,700)
relating to the exercise of the full amount of the option granted by the Trust),
and a liquidation amount with respect to the assets of the Trust of $50 per
Preferred Security, are hereby designated for the purposes of identification
only as "Remarketable Term Income Deferrable Equity Securities (HIGH TIDES_)"
(the "Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Exhibit A-1, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or other organization on which the Preferred Securities
are listed, if any.
(b) "Common Securities." 222,682 (including 37,114 relating to the
exercise of the full amount of the option granted by the Trust) Common
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of ELEVEN MILLION ONE HUNDRED THIRTY-FOUR THOUSAND ONE
HUNDRED Dollars ($11,134,100) (including ONE MILLION EIGHT HUNDRED FIFTY-FIVE
THOUSAND SEVEN HUNDRED Dollars ($1,855,700) relating to the
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exercise of the full amount of the option granted by the Trust) and a
liquidation amount with respect to the assets of the Trust of $50 per Common
Security, are hereby designated for the purposes of identification only as "HIGH
TIDES Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Exhibit A-2, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will accrue at the Applicable
Rate applied to the stated liquidation amount of $50 per Security, such rate
being the rate of interest payable on the Debentures to be held by the Property
Trustee. The Applicable Rate will be 5_% per annum (the "Initial Rate") from
January 31, 2000 to but excluding the Reset Date. From the Reset Date, the
Applicable Rate will be the Term Rate established by the Remarketing Agent to be
effective on the Reset Date. The Applicable Rate will be increased by 0.50% per
annum during the continuation of a Registration Default until such Registration
Default is cured. Distributions in arrears for more than one quarter will bear
interest thereon compounded quarterly at the Applicable Rate (to the extent
permitted by applicable law) as described in the Declaration. The term
"Distributions" as used herein includes such quarterly Distributions, additional
Distributions on quarterly Distributions not paid on the applicable Distribution
Date and Additional Amounts, as applicable. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. 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 for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
January 31, 2000 and will be payable quarterly in arrears, on the following
dates, which dates correspond to the interest payment dates on the Debentures:
February 1, May 1, August 1 and November 1 of each year, commencing on May 1,
2000, except as otherwise described below (each such date being a "Distribution
Date"). The Reset Date is any date (1) not later than February 1, 2005 (or, if
such day is not a Business Day, the next succeeding Business Day), and (2) not
earlier than 70 Business Days prior to February 1, 2005, as may be determined by
the Remarketing Agent, in its sole discretion, for settlement of a successful
remarketing. The fifteenth day of the month immediately preceding each
Distribution Date is the record date for determining which
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holders of Securities shall be paid the Distributions and Additional Amounts, if
any, payable on such Distribution Date. If the Reset Date is prior to the record
date for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Security is registered on the
relevant record date, subject to our right to initiate a Deferral Period. If the
Reset Date is on or after the record date for the immediately following
Distribution Date, then (1) Distributions and Additional Amounts, if any,
accrued from and after the record date to but excluding the Reset Date shall be
paid on the immediately following Distribution Date to the person in whose name
each Security is registered on the relevant record date and (2) Distributions
and Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on the
second Distribution Date immediately following the Reset Date to the person in
whose name each Security is registered on the relevant record date for such
second Distribution Date, subject in each case to our right to initiate a
Deferral Period.
So long as no Debenture Event of Default has occurred and is continuing,
the Depositor has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each a "Deferral Period") and, as
a consequence of such deferral, 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 Applicable Rate
compounded quarterly during any such Deferral Period. Prior to three Business
Days before a Regular Record Date relating to a Payment Resumption Date (as
defined in the Indenture), the Depositor may further extend such Deferral
Period; provided that such Deferral Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters or extend
beyond (i) the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture and (ii) in the case of a Deferral Period which begins prior to the
Reset Date, the Reset Date. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the Regular
Record Date for the relevant Payment Resumption Date. Upon the termination of
any Deferral Period and the payment of all amounts then due, the Depositor may
commence a new Deferral 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 at the close of
business on the relevant record dates. The relevant record dates shall be on the
fifteenth day of the month immediately preceding each relevant payment date,
except as otherwise described in this Annex I to the Declaration. Subject to any
applicable laws and
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regulations and the provisions of the Declaration, each such payment in respect
of Preferred Securities being held in book-entry form through The Depository
Trust Company (the "Depositary"), or any successor Depositary appointed pursuant
to the Declaration, will be made as described under the heading "Description of
HIGH TIDES -- Form, Book-Entry Procedures and Transfer" in the Offering
Circular. The relevant record dates for the Common Securities shall be the same
record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Depositor having failed to make a payment under the 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
additional Distributions or other payment in respect of any such delay) except
that, with respect to any Redemption Date, if such Business Day is in the next
succeeding calendar year, such Redemption Date shall be the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as forth in this Annex I to the Declaration, no payment, allowance or
adjustment shall be made with respect to accumulated and unpaid Distributions on
such Securities, or be required to be made; provided that Holders of Securities
at the close of business on any record date for the payment of Distributions
will be entitled to receive the Distributions payable on such Securities on the
corresponding payment date notwithstanding the conversion of such Securities
into Common Stock following such record date.
(e) 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 of the Trust,
the Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount of Debentures, unless such distribution would not be
practical, in which event such Holders will
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be entitled to receive out of the assets of the Trust available for distribution
to Holders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the aggregate liquidation amount
thereof plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the 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 in accordance with paragraph 9. The Holder of the Common Securities
will be entitled to receive Distributions upon any such liquidation Pro Rata
with the Holders of the Preferred Securities, except as provided in paragraph
10.
4. Redemption and Distribution.
(a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise (other than following any
distribution of the Debentures to the Holders), the proceeds from such repayment
or redemption shall be simultaneously applied to redeem, on a Pro Rata basis, a
Like Amount of Securities, on the redemption date, in an amount per Security
equal to the applicable Redemption Price, payable in cash, which Redemption
Price will be equal to (i) the liquidation amount of each of the Securities plus
any accrued and unpaid Distributions thereon (A) in the case of the repayment of
the Debentures at stated maturity, or (B) in the case of a redemption of the
Debentures in certain limited circumstances set forth in the Indenture upon the
occurrence of a Tax Event, or (ii) (A) in the case of an Optional Redemption
after February 5, 2003 until but excluding the Tender Notification Date, the
Initial Redemption Price; (B) in the case of an Optional Redemption on or after
the Reset Date (except in the event of a Failed Final Remarketing), in
accordance with the Term Call Protections or (C) in the event of a Failed Final
Remarketing, 100% of the then outstanding aggregate principal amount of the
Securities being redeemed, plus accrued and unpaid interest thereon.
(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 Paragraph
4(f)(ii) below.
(c) The Depositor, as the Holder of the outstanding Common Securities,
shall have the right at any time (including, without limitation, upon the
occurrence of a Tax Event or Investment Company Event) to dissolve the Trust
and, after satisfaction of the creditors of the Trust, cause a Like Amount of
the Debentures to be distributed to the Holders of the Securities in liquidation
of the Trust, provided that neither the Depositor nor the Administrative
Trustees may cause the dissolution of the Trust during the period beginning on
the Business Day following the Tender Notification
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Date and ending on the Reset Date (other than upon the occurrence of a Tax Event
or an Investment Company Event), provided that the Administrative Trustees shall
have received a No Recognition Opinion (as defined below) prior to the
dissolution of the Trust.
(d) If, at any time, a Tax Event shall occur and be continuing the
Depositor shall cause the Trustees to dissolve the Trust and, after satisfaction
of the creditors of the Trust, cause a Like Amount of Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Tax Event; provided, however, that such
dissolution, liquidation and distribution shall be conditioned on (i) the
Trustees' receipt of an opinion of a nationally recognized independent tax
counsel (reasonably acceptable to the Trustees) experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such dissolution and distribution of
Debentures, and (ii) the Depositor being unable to avoid such Tax Event within
such 90-day period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Depositor, will have no
adverse effect on the Trust, the Depositor or the Holders of the Preferred
Securities and will involve no material cost ("Ministerial Action").
If (i) the Depositor has received an opinion (a "Redemption Tax Opinion")
of a nationally recognized independent tax counsel (reasonably acceptable to the
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that (a) the Trust would not be considered to be
a grantor trust for United States federal income tax purposes or (b) the
Depositor would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities upon liquidation of the Trust as
described in this paragraph 4(d), or (ii) the Trustees shall have been informed
by such tax counsel that it cannot deliver a No Recognition Opinion, the
Depositor shall have the right, upon not less than 30 nor more than 60 days'
notice, and within 90 days following the occurrence and continuation of such Tax
Event, to redeem the Debentures in whole, but not in part, for cash, for the
principal amount plus accrued and unpaid interest thereon and, following such
redemption, all the Securities will be redeemed by the Trust at the liquidation
amount of $50 per Security plus accrued and unpaid Distributions thereon;
provided, however, that, if at the time there is available to the Depositor or
the Trust the opportunity to eliminate, within such 90-day period, the Tax Event
by taking some Ministerial Action, the Trust or the Depositor will pursue such
Ministerial Action in lieu of redemption.
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In lieu of the foregoing options, the Depositor shall also have the
option of causing the Securities to remain outstanding and pay Additional
Amounts on the Debentures.
"Tax Event" means that the Property Trustee shall have received an
opinion of a nationally recognized independent tax counsel to the Depositor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to, or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority therefor or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (x) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (y) any portion of interest payable by
the Depositor to the Trust (or OID accruing) on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes or (b) with
respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Depositor (or OID accruing) on the Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Depositor in whole or in part for United States federal income tax purposes.
If an Investment Company Event (as hereinafter defined) shall occur and
be continuing, the Depositor shall cause the Trustees to dissolve the Trust and,
after satisfaction to creditors of the Trust, cause a Like Amount of the
Debentures to be distributed to the Holders of the Securities in liquidation of
the Trust within 90 days following the occurrence of such Investment Company
Event.
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"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.
After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee (or any successor Depositary or its nominee), as record Holder of
Preferred Securities represented by global certificates, will receive a
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by
the Depositary or its nominee (or any successor Depositary or its nominee), will
be deemed to represent Debentures having an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Depositor or its agent for transfer
or reissuance.
(e) The Securities will not be redeemed 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.
(f) Redemption, Distribution and Remarketing Procedures.
(1) Holders will be given not less than 20 nor more than 60 days
notice of an Optional Redemption. Holders will be given at least 30 days
but not more than 60 days notice of a redemption pursuant to paragraph
4(d). Notice of distribution of Debentures in exchange for the Securities
will be given by the Administrative Trustees on behalf of the Trust by
mail to each Holder of Securities to be exchanged not fewer than 30 nor
more than 60 days before the date fixed for exchange thereof. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph 4(f)(i)
(other than notices in connection with a Remarketing, the terms of which
shall be governed by the Remarketing Agreement), a redemption or
distribution notice shall be deemed to be given on the day such notice is
first mailed by first-class
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mail, postage prepaid, to Holders of Securities. Each redemption or
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 or 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.
(2) 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 Securities, it being understood that, in respect
of Preferred Securities registered in the name of and held of record by
the Depositary (or any successor Depositary) or any nominee, the
distribution of the proceeds of such redemption will be made to each
Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or
nominee.
(3) If Securities are to be redeemed and the Administrative
Trustees on behalf of the Trust gives a redemption or distribution
notice, which notice may only be issued if the Debentures are redeemed as
set out in this paragraph 4 (which notice will be irrevocable), then (A)
with respect to Preferred Securities held in book-entry form, by 10:00
a.m., New York City time, on the redemption date, to the extent funds are
available, with respect to Preferred Securities held in global form, the
Property Trustee will deposit irrevocably with the Depositary (or
successor Depositary) funds sufficient to pay the amount payable on
redemption with respect to such Preferred Securities and will give the
Depositary irrevocable instructions and authority to pay the amount
payable on redemption to the Holders of such Preferred Securities, and
(B) with respect to Preferred Securities issued in certificated form and
Common Securities, to the extent funds are available, the Property
Trustee will irrevocably deposit with the Paying Agent funds sufficient
to pay the amount payable on redemption to the Holders of such Securities
and will give the Paying Agent irrevocable instructions and authority to
pay the amount payable on redemption to the Holders thereof upon
surrender of their certificates. If a redemption or distribution notice
shall have been given and funds deposited as required, then on the date
of such deposit, 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
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interest on such Redemption Price, and such Securities will cease to be
outstanding. Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day that
is a Business Day (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 any Securities is improperly withheld or refused and not paid
either by the Trust or by the Depositor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue at the then applicable rate, from the original
redemption date to the date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the amount payable upon redemption (other than for purposes
of calculating any premium).
(4) Redemption and/or distribution notices, as applicable, shall
be sent by the Administrative Trustees on behalf of the Trust to (A) in
the case of Preferred Securities held in book-entry form, the Depositary
and, in the case of Preferred Securities held in certificated form, the
Holders of such certificates and (B) in respect of the Common Securities,
the Holder thereof.
(5) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Depositor
or any of its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities, including by tender, in the open market
or by private agreement; provided that neither the Depositor nor any of
its Affiliates may purchase Preferred Securities on the Reset Date or
submit orders in the Remarketing.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to 5:00
p.m., New York City time, on the Tender Notification Date and, in the event of a
Convertible Remarketing or a Final Failed Remarketing, from and after the Reset
Date to and including February 1, 2030 (except that Securities called for
redemption by the
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Depositor will be convertible at any time prior to 5:00 p.m., New York City time
on any Redemption Date), at their option, to cause the Conversion Agent to
convert Securities, on behalf of the converting Holders, into shares of Common
Stock (as defined in the Indenture) in the manner described herein on and
subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $50 principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock on
or prior to the Tender Notification Date, into 0.4881 shares of Common Stock per
$50 principal amount of Debentures (which is equivalent to a conversion price of
$102.4375 per share of Common Stock, subject to certain adjustments set forth in
the Indenture (as so adjusted, "Initial Conversion Price")). On and after the
Reset Date, the Securities may, at the option of the Trust and subject to the
results of the Remarketing, become nonconvertible or convertible into a
different number of shares of Common Stock.
(b) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Trust shall not cause the conversion of any Debentures except
pursuant to such a Conversion Request. The Conversion Request shall (i) set
forth the number of Securities to be converted and the name or names, if other
than the Holder, in which the shares of Common Stock should be issued and (ii)
direct the Conversion Agent (a) to exchange such Securities for a portion of the
Debentures held by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of such
Holder, into Common Stock (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Property Trustee of the
Holder's election to exchange Securities for a portion of the Debentures held by
the Trust and the Property Trustee shall, upon receipt of such notice, deliver
to the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section 5. The Conversion Agent shall thereupon
notify the Depositor of the Holder's election to convert such Debentures into
shares of Common Stock. Holders of Securities at the close of business on a
Distribution record date will be entitled to receive the Distribution payable on
such Securities on the corresponding Distribution payment date notwithstanding
the conversion of such Securities following such record date but prior to such
distribution payment date. Except as provided above, neither the Trust nor the
Depositor will make, or be required to make, any payment, allowance or
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adjustment upon any conversion on account of any accumulated and unpaid
Distributions accrued on the Securities, whether or not in arrears, (including
any Additional Amounts accrued thereon) surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion, except to the extent that such shares are held of
record on the record date for any such Distributions. Securities shall be deemed
to have been converted immediately prior to the close of business on the day on
which a Notice of Conversion relating to such Securities is received by the
Trust in accordance with the foregoing provision (the "Conversion Date"). The
Person or Persons entitled to receive the Common Stock issuable upon conversion
of the Debentures shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on or
after the Conversion Date, the Depositor shall issue and deliver at the office
of the Conversion Agent a certificate or certificates for the number of full
shares of Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same, unless otherwise directed by the Holder in the
notice of conversion and the Conversion Agent shall distribute such certificate
or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints The Bank
of New York "Conversion Agent" for the purpose of effecting the conversion of
Securities in accordance with this Section 5. In effecting the conversion and
transactions described in this Section 5, the Conversion Agent shall be acting
as agent of the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection with
the conversion of such Securities in accordance with this Section 5 and (ii) to
convert all or a portion of the Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of this
Section and to deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Depositor to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.
(e) The Depositor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Depositor
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shall be entitled to deliver upon conversion of Debentures, shares of Common
Stock reacquired and held in the treasury of the Depositor (in lieu of the
issuance of authorized and unissued shares of Common Stock), so long as any such
treasury shares are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Property Trustee shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Depositor and the Administrative
Trustees on behalf of the Trust shall prepare and shall use its best efforts to
obtain and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the Common Stock (and all
requirements to list the Common Stock issuable upon conversion of Debentures
that are at the time applicable), in order to enable the Depositor to lawfully
issue Common Stock to the Trust upon conversion of the Debentures and the Trust
to lawfully deliver the Common Stock to each Holder upon conversion of the
Securities.
(f) The Depositor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Depositor shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that in which
the Securities so converted were registered, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the Trust
the amount of any such tax, or has established to the satisfaction of the Trust
that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities set forth in
this Annex I to the Declaration or in the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 6(b) and 8, as otherwise required
by law, the Declaration and the Indenture, the Holders of the Preferred
Securities will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest on the
Debentures set
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forth herein, in the Declaration or in the Indenture, if (i) a Debenture Event
of Default occurs and is continuing or (ii) the Depositor defaults under the
Preferred Securities Guarantee (each of (i) and (ii) being an "Appointment
Event"), then the Holders of the Preferred Securities, acting as a single class,
will be entitled by the vote of a Majority in liquidation amount of the
Preferred Securities to appoint a Special Trustee in accordance with Section
5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities (other
than the Depositor, or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Depositor)
will be entitled to nominate any Person to be appointed as Special Trustee. Not
later than 30 days after such right to appoint a Special Trustee arises, the
Trustees (other than the Delaware Trustee) will convene a meeting for the
purpose of appointing a Special Trustee. If the Trustees fail to convene such
meeting within such 30-day period, the Holders of not less than 10% in aggregate
liquidation amount of the Preferred Securities will be entitled to convene such
meeting in accordance with Section 12.02 of the Declaration. The record date for
such meeting will be the close of business on the Business Day that is one
Business Day before the day on which notice of the meeting is sent to the
Holders. The provisions of the Declaration relating to the convening and conduct
of the meetings of the Holders will apply with respect to any such meeting.
Any Special Trustee so appointed shall cease to be a Special Trustee if
the Appointment Event pursuant to which the Special Trustee was appointed and
all other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities in accordance with Section 5.06(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the Preferred
Securities will be entitled to convene such a meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting will be the close of
business on the Business Day which is one Business Day before the day on which
the notice of meeting is sent to Holders. Notwithstanding the appointment of a
Special Trustee, the Depositor shall retain all rights under the Indenture,
including the right to defer payments of interest by extending the interest
payment period on the Debentures.
Subject to the requirements set forth in this paragraph and as long as
the Debentures are held by the Trust, the Holders of a majority in liquidation
amount of the outstanding Preferred Securities, voting separately as a class
may, and the Trustees shall not, without obtaining the prior approval of the
Holders of a Majority in aggregate liquidation amount of all Preferred
Securities (i) direct the time, method, and place of conducting any proceeding
for any remedy available to the Property Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its conse-
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quences that is waivable under Section 5.14 of the Indenture or otherwise, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, provided, however, that, where a consent under the
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Debentures affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such action
at the direction of the Holders of at least the proportion in liquidation
preference of the Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Property Trustee shall not, and none of the other Trustees shall in any event,
revoke any action previously authorized or approved by a vote of the Holders of
the Preferred Securities, except by a subsequent vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, 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 tax counsel experienced in such matters to the effect that, as a
result of such action, the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption on the redemption
date), then a Holder of Preferred Securities may directly institute a legal
proceeding, subject to the terms of the Indenture (including the subordination
provisions set forth in Article XII thereof), for enforcement of payment to such
Holder (a "Direct Action") of the principal of or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder on or after the respective due date
specified in the Debentures. Except as provided in the preceding sentence, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the Holders of the Debentures. In connection with any Direct
Action, the Holder of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities under the Declaration to the extent of any
payment made by the Debenture Issuer to such Holder of Preferred Securities in
such Direct Action. In addition, if the Property Trustee fails to enforce its
rights under the Debentures (other than rights arising from an Event of Default
described in the immediately preceding sentence) after any Holder of Preferred
Securities shall have made a written request to the Property Trustee to enforce
such rights, such Holder of Preferred Securities may, to the fullest extent
permitted by law, institute a direct action on behalf of the Trust to
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enforce the rights of the Debenture Trustee, the Property Trustee or any other
Person in accordance with the terms of the Indenture or the Declaration, as the
case may be.
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 Administrative Trustees will cause a notice of
any meeting at which Holders without prior notice of Preferred Securities are
entitled to vote, to be mailed to each Holder of record of Preferred Securities.
Each such notice will include a statement setting forth the following
information (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
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 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 Depositor, the Trustees or any Affiliate of the
Depositor or the Trustee 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,
except that for the purposes of determining whether the Property Trustee shall
be fully protected in relying on any such direction, waiver or consent, only
Securities which the Property Trustee knows are so owned shall be so
disregarded.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act 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,
subject to the exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee unless a Debenture Event of Default
shall have occurred and be continuing, in which event the Property Trustee and
the Delaware Trustee may only be removed by the Holders of a Majority in
liquidation amount of the Preferred Securities, voting as a class at a meeting
of the Holders of the Preferred Securities; and
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(c) Subject to Section 2.06 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, 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, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.14 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, provided that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this paragraph 7(c),
the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
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 tax counsel to the effect that, as a result
of such action the Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes. If the Property Trustee fails to
enforce its rights under the Debentures after any Holder of Common Securities
shall have made a written request to the Property Trustee to enforce such
rights, such Holder of Common Securities may, to the fullest extent permitted by
law, institute a legal proceeding directly against the Depositor, to enforce the
Property Trustee's rights, as holder of the Debentures, under the Indenture,
without first instituting any 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 without prior notice. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to vote
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, (ii) a
description of any resolution proposed
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for adoption at such meeting on which such Holders are entitled to vote and
(iii) instructions for the delivery of proxies.
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 Debentures in accordance with the Declaration and the terms of the
Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or 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 8.01
of the Declaration, then the Holders of outstanding Securities 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 a Majority in liquidation amount of the
Securities, voting together as a single class, provided, however, that, the
rights of Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Trustee shall not be amended without the
consent of each Holder of Preferred Securities; and provided further that if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only 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 at
least a Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by at least
the same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained an opinion of 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.
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9. 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, on any Distribution Date or redemption date an
Event of Default under the Declaration has occurred and is continuing, in which
case no payment of any Distribution on, or amount payable upon redemption of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or the amount payable upon redemption of
Preferred Securities then due and payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where a Debenture Event of
Default occurs and is continuing in respect of the Debentures held by the
Property Trustee, 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.
11. 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 and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture
including the subordination provisions therein, which are each incorporated by
reference herein and which include, among other things, provisions relating to
certain rights of the Holders of the Preferred Securities all as set forth
therein.
12. No Preemptive Rights.
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The Holders of the Securities shall have no preemptive or similar rights
to subscribe for any additional securities.
13. Registration Rights.
The Holders of the Preferred Securities shall have all the rights and
obligations set forth in the Registration Rights Agreement.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Depositor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee, as may be appropriate,
and the Indenture to a Holder without charge on written request to the Depositor
at its principal place of business.
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EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Rule 144A
Global Preferred Securities unless otherwise determined by the Depositor in
accordance with applicable law -- EACH OF THE PREFERRED SECURITIES (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH
OF THE PREFERRED SECURITIES AND ANY DEBENTURES ISSUED UPON EXCHANGE FOR THE
PREFERRED SECURITIES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF EACH OF THE PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER
OF EACH OF THE PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS PREFERRED SECURITY AGREES FOR THE BENEFIT OF THE
ISSUER AND THE COMPANY THAT (A) PREFERRED SECURITY AND ANY DEBENTURES OR COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PUR-
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CHASER OF EACH OF THE PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.]
[Include if Preferred Security is in global form and The Depository Trust
Company is the Depository -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
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Certificate Number
Number of Preferred Securities
Aggregate Liquidation Value $
CUSIP NO. __________
Preferred Securities
of
Calpine Capital Trust II
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)_*
(liquidation amount $50 per HIGH TIDE)
Calpine Capital Trust II, a statutory business trust created 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 Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES)_*(liquidation amount $50 per HIGH TIDE) (the "Preferred
Securities"). Subject to the restrictions set forth in the Declaration (as
defined below), the Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. 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 January 31, 2000, 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 Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Preferred Securities Guarantee to the extent provided therein. The Depositor
will provide a copy of the Declaration, the Preferred Securities Guarantee and
the Indenture to a Holder without charge upon written request to the Trust at
its principal place of business.
Reference is hereby made to select provisions of the Preferred Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
- ----------
* The terms Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES)_ and HIGH TIDES_ are registered servicemarks of Credit Suisse First
Boston Corporation.
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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, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's (or its authorized designee's)
Certificate of Authentication hereon has been properly executed, these Preferred
Securities shall not be entitled to any benefit under the Declaration or be
valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of _________, 2000.
Calpine Capital Trust II
By:
---------------------------------
Name:
Title: Administrative Trustee
[CONTINUED ON NEXT PAGE]
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PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ________, 2000
The Bank of New York,
as Property Trustee
By:
---------------------------------
Authorized Signatory
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105
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will accrue at the
Applicable Rate applied to the stated liquidation amount of $50 per Preferred
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. The Applicable Rate will be 5 1/2% per annum (the
"Initial Rate") from the date of original issuance of the Securities to be
excluding the Reset Date, and the Term Rate from the Reset Date and thereafter.
The Term Rate will be the rate established by the Remarketing Agent to be
effective on the Reset Date. The Applicable Rate will be increased by 0.50% per
annum during the continuation of a Registration Default. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Applicable Rate (to the extent permitted by applicable law).
The term "Distributions" as used herein includes such quarterly Distributions,
additional Distributions on quarterly Distributions not paid on the applicable
Distribution Date and Additional Amounts, as applicable. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
available therefor. 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 for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from January 31, 2000 and will be
payable quarterly in arrears on February 1, May 1, August 1 and November 1, of
each year (except as provided below), commencing on May 1, 2000 to Holders of
record at the close of business on the fifteenth day of the month immediately
preceding the applicable payment date, which payment dates shall correspond to
the interest payment dates (each an "Interest Payment Date") on the Debentures.
The Reset Date is any date (1) not later than February 1, 2005 (or, if such day
is not a Business Day, the next succeeding Business Day), and (2) not earlier
than 70 Business Days prior to February 1, 2005, as may be determined by the
Remarketing Agent, in its sole discretion, for settlement of a successful
remarketing. The fifteenth day of the month immediately preceding each
Distribution Date is the record date for determining which holders of Preferred
Securities shall be paid the Distributions and Additional Amounts, if any,
payable on such Distribution Date. If the Reset Date is prior to the record date
for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Preferred Security is
registered on the relevant record date, subject
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to our right to initiate a Deferral Period. If the Reset Date is on or after the
record date for the immediately following Distribution Date, then (1)
Distributions and Additional Amounts, if any, accrued from and after the record
date to but excluding the Reset Date shall be paid on the immediately following
Distribution Date to the person in whose name each Preferred Security is
registered on the relevant record date and (2) Distributions and Additional
Amounts, if any, accrued from and after the Reset Date to but excluding the
immediately following Distribution Date shall be paid on the second Distribution
Date immediately following the Reset Date to the person in whose name each
Preferred Security is registered on the relevant record date for such second
Distribution Date, subject in each case to our right to initiate a Deferral
Period. So long as no Debenture Event of Default has occurred and is continuing,
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
Debentures for a period not exceeding 20 consecutive quarters (each a "Deferral
Period") and, as a consequence of such deferral, 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
Applicable Rate compounded quarterly during any such Deferral Period. Prior to
the termination of any such Deferral Period, the Debenture Issuer may further
extend such Deferral Period; provided that such Deferral Period together with
all such previous and further deferrals thereof may not exceed 20 consecutive
quarters or extend beyond (i) the maturity (whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise) of the Debentures
under the Indenture or (ii) in the case of a Deferral period which begins prior
to the Reset Date, the Reset Date. Payments of accrued Distributions will be
payable on an Interest Payment Date elected by the Company to Holders as they
appear on the books and records of the Trust on the record date for such
Interest Payment Date. Upon the termination of any Deferral Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Deferral Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
[Include if the Preferred Security contains a Restricted Securities
Legend -- Holders of Restricted Preferred Securities shall have all the rights
and obligations set forth in the Registration Rights Agreement.]
2
107
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Calpine Capital Trust II
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as such term is defined in the Indenture, dated
January 31, 2000, between Calpine Corporation and The Bank of New York, as
Debenture Trustee) of CALPINE CORPORATION in accordance with the terms of the
Amended and Restated Declaration of Trust (as amended from time to time, the
"Declaration"), dated as of January 31, 2000, by Peter Cartwright, Ann B. Curtis
and Thomas R. Mason, as Administrative Trustees, The Bank of New York
(Delaware), as Delaware Trustee, The Bank of New York, as Property Trustee,
Calpine Corporation, as Depositor and Debenture Issuer, and by the Holders, from
time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise of
the option to convert these Preferred Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to Common Stock issuable
upon conversion of the Preferred Securities.
1
108
Date: ____________, ____
in whole __ in part
Number of Preferred Securities to be
converted:
--------------------------------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature Guarantee:**
----------------------
- ----------
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
2
109
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)
Signature Guarantee:***_________________________________________________________
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
- ----------
*** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
1
110
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
[ ] has requested the Property Trustee by written order to deliver in
exchange for its beneficial interest in the Rule 144A Global Preferred
Security held by the Depositary a Preferred Security or Preferred
Securities in definitive, registered form in such number equal to its
beneficial interest in such Rule 144A Global Preferred Security (or the
number thereof indicated above); or
[ ] has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such
number equal to number of Preferred Securities in definitive registered
form so held; or
[ ] has requested the Property Trustee by written order to exchange or
register the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) [ ] acquired for the undersigned's own account, without
transfer (in satisfaction of Section 9.02(c)(ii)(A) of the
Declaration); or
(2) [ ] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [ ] transferred pursuant to Rule 144 of the Securities Act of
1933; or
(4) [ ] transferred pursuant to an effective registration
statement under the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (2) or (3) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
2
111
of the Securities Act of 1933, such as the exemption provided by Rule 144 under
such Act.
Signature
Signature Guarantee:****
Signature must be guaranteed Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these
Preferred Securities for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Trust as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
- ----------
**** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
3
112
Dated:
------------------------- ------------------------------------
NOTICE: To be executed by an
executive officer
4
113
EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF CALPINE CORPORATION]
Certificate Number Number of Common Securities
Common Securities
of
Calpine Capital Trust II
HIGH TIDES Common Securities
(liquidation amount $50 per HIGH TIDES Common Security)
Calpine Capital Trust II, a statutory business trust created 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 HIGH TIDES Common Securities (liquidation
amount $50 per Remarketable Common Security) (the "Common Securities"). Subject
to the restrictions set forth in the Declaration (as defined below), 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 January 31, 2000, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common
A-2-1
114
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Depositor will provide a copy of the Declaration and the Indenture to a Holder
without charge upon written request to the Depositor at its principal place of
business.
Reference is hereby made to select provisions of the Common Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
Upon receipt of this certificate, the Depositor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A-2-2
115
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
______, 20__.
Calpine Capital Trust II
By:
---------------------------------
Name:
Title: Administrative Trustee
A-2-3
116
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will accrue at the
Applicable Rate applied to the stated liquidation amount of $50 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. The Applicable Rate will be 5_% per annum (the
"Initial Rate") from the date of original issuance of the Securities to be
excluding the Reset Date, and the Term Rate from the Reset Date and thereafter.
The Term Rate will be the rate established by the Remarketing Agent to be
effective on the Reset Date. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the Applicable Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes quarterly Distributions, additional Distributions on quarterly
Distributions not paid on the applicable Distribution Date and Additional
Amounts, as applicable. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. 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 for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from January 31, 2000 and will be
payable quarterly in arrears on February 1, May 1, August 1 and November 1 of
each year (except as provided below), commencing on May 1, 2000 to Holders of
record at the close of business on the fifteenth day of the month immediately
preceding the applicable payment date, which payment dates shall correspond to
the interest payment dates (each, an "Interest Payment Date") on the Debentures.
The Reset Date is any date (1) not later than February 1, 2005, or if the day is
not a Business Day, the next succeeding Business Day, and (2) not earlier than
70 Business Days prior to February 1, 2005, as may be determined by the
Remarketing Agent, in its sole discretion, for settlement of a successful
remarketing. The fifteenth day of the month immediately preceding each
Distribution Date is the record date for determining which holders of Common
Securities shall be paid the Distributions and Additional Amounts, if any,
payable on such Distribution Date. If the Reset Date is prior to the record date
for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Common Security is registered
on the relevant record date, subject to our right to initiate a Deferral Period.
If the Reset Date is on or after the record date for the immediately following
Distribution Date, then (1) Distributions and Additional
117
Amounts, if any, accrued from and after the record date to but excluding the
Reset Date shall be paid on the immediately following Distribution Date to the
person in whose name each Common Security is registered on the relevant record
date and (2) Distributions and Additional Amounts, if any, accrued from and
after the Reset Date to but excluding the immediately following Distribution
Date shall be paid on the second Distribution Date immediately following the
Reset Date to the person in whose name each Common Security is registered on the
relevant record date for such second Distribution Date, subject in each case to
our right to initiate a Deferral Period. So long as no Debenture Event of
Default has occurred and is continuing, 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 Debentures for a period not exceeding 20
consecutive quarters (each a "Deferral Period") and, as a consequence of such
deferral, 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 Applicable Rate compounded quarterly during
any such Deferral Period. Prior to the termination of any such Deferral Period,
the Debenture Issuer may further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further deferrals thereof
may not exceed 20 consecutive quarters or extend beyond (i) the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture or (ii) in the
case of a Deferral Period which begins prior to the Reset Date, the Reset Date.
Payments of accrued Distributions will be payable on an Interest Payment Date
elected by the Company to Holders as they appear on the books and records of the
Trust on the record date for such Interest Payment Date. Upon the termination of
any Deferral Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Deferral Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration; provided that no
Common Securities may be converted into Common Stock unless all outstanding
Common Securities are converted into Common Stock, which conversion will result
in the dissolution of the Trust.
2
118
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Calpine Capital Trust II
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as such term is defined in the Indenture, dated
January 31, 2000, between Calpine Corporation and The Bank of New York, as
Debenture Trustee) of CALPINE CORPORATION in accordance with the terms of the
Amended and Restated Declaration of Trust (as amended from time to time, the
"Declaration"), dated as of January 31, 2000, by Peter Cartwright, Ann B. Curtis
and Thomas R. Mason, as Administrative Trustees, The Bank of New York
(Delaware), as Delaware Trustee, The Bank of New York, as Property Trustee,
Calpine Corporation, as Depositor and Debenture Issuer, and by the Holders, from
time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise of
the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Securities set forth
as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Common Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to Common Stock issuable
upon conversion of the Common Securities.
119
Date: ____________, ____
in whole __ in part
Number of Common Securities to be converted:
___________________
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature Guarantee:*****
-------------------
- ----------
***** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar,
2
120
- ----------
which requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
3
121
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)
Signature Guarantee:******______________________________________________________
- --------
****** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)