FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
CALENERGY CAPITAL TRUST ___
Dated as of ________ __, 1997
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALENERGY CAPITAL TRUST ___
________ __, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of ________ __, 1997, 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"), CalEnergy Company, Inc., a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided
beneficial interests in the Trust issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established CalEnergy
Capital Trust ___ (the "Trust"), a trust under the Business Trust Act (as
defined herein) pursuant to a Declaration of Trust dated as of August 4, 1997,
(the "Original Declaration") and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on August 4, 1997, 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 (as defined herein) of the Debenture Issuer (as
defined herein);
WHEREAS, as of the date hereof, no interests in
the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate 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.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) 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
(f) a reference to the singular includes the plural and vice
versa.
"Additional Interest" means if the Trust is required to pay
any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other
taxing authority, such amounts as shall be required so that the net amounts
received and retained by the Trust after paying such taxes, duties,
assessments and governmental charges will not be less than the amounts the
Trust would have received had no such taxes, duties, assessments or
governmental charges been imposed.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
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"Agent" means any Registrar, Paying Agent,
Conversion Agent or co-registrar.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person provided, however that the Authorized Officer
signing an Officer's Certificate given pursuant to section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"Book Entry Interest" means a beneficial interest in a
Global Preferred Security, ownership and transfers of which shall be
maintained and made through book entries by a Depositary as described in
Section 9.4.
"Business Day" means any day other than a day on which
banking institutions in the City of New York or in Wilmington, Delaware are
authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.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.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means ________ __, 1997.
"Code" means the Internal Revenue Code of 1986 as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange
Commission.
"Common Securities" has the meaning set forth in
Section 7.1(a).
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee;
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or (d) any officer, employee or agent of the Trust or its
Affiliates.
"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.
"Conversion Agent" has the meaning set forth in
Section 7.4.
"Debenture Issuer" means the Sponsor in its
capacity as issuer of the Debentures.
"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.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Securities" means any Preferred
Securities in definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Depositary" means The Depository Trust Company,
the initial Clearing Agency or any Clearing Agency appointed
as successor to The Depository Trust Company pursuant to
Section 9.4.
"Direct Action" has the meaning set forth in
Section 3.8(c).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"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.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Fiscal Year" has the meaning set forth in Section
11.1.
"Global Preferred Security" has the meaning set
forth in Section 9.4.
"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 Company Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of ________ __,
1997, between the Debenture Issuer and the Debenture Trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"Investment Company" means an investment company
as defined in the Investment Company Act.
"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 set forth in the
terms of the Securities as set forth in Annex I hereto.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"Liquidated Damages" has the meaning set forth in
Section 9.5.
"List of Holders" has the meaning set forth in
Section 2.2(a).
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"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or 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 the terms
of the Securities as set forth in Annex I hereto.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officer signing the
Certificate has read the covenant or
condition and the definitions relating
thereto;
(b) a brief statement of the nature and
scope of the examination or
investigation undertaken upon which the
statements or opinions contained in such
Certificate are based;
(c) a statement that, in such officer's
opinion, such officer has made or caused
to be made such examination or
investigation as is necessary to enable
such officer to express an informed
opinion as to whether or not such
covenant or condition has been complied
with; and
(d) a statement as to whether, in the
opinion of such officer, such condition
or covenant has been complied with.
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"Participants" has the meaning set forth in
Section 7.3(c).
"Paying Agent" has the meaning set forth in
Section 7.4.
"Payment Amount" has the meaning set forth in
Section 6.1.
"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 set forth
in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee
agreement dated as of ________ __, 1997, of the Sponsor 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 5.3.
"Property Trustee Account" has the meaning set
forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
"Registration Statement" has the meaning set forth
in Section 3.6(b).
"Registrar" has the meaning set forth in Section
7.4.
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"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities
of the Sponsor.
"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.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act.
"Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as
amended from time to time or any successor legislation.
"Securities Custodian" means the custodian with respect to
the Global Preferred Security and any other Preferred Security in global form.
"Special Event" has the meaning set forth in
Annex I hereto.
"Sponsor" means CalEnergy Company, Inc., a Delaware
corporation, or any successor entity in a merger, consolidation or
amalgamation, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set
forth in Section 5.6.
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"Successor Securities" has the meaning set forth
in Section 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"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" means CalEnergy Capital Trust ___, a trust created
under the Business Trust Act.
"Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from time
to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" shall have the meaning
set forth in Section 7.3.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration, which
are incorporated by reference in and made part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
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(b) The Property Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by ss.ss.
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular 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 Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee
by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a written request
from the Property Trustee 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 the 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.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property
Trustee shall provide to the Holders of the
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Preferred Securities such reports as are required by ss. 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by ss. 313 of
the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as required by ss. 314 of the Trust Indenture Act (if any) and the
compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.
Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in ss. 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
ss. 314(c)(1) may be given in the form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the 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
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amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 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.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) 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 2.6(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
Common Securities that the relevant Super
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Majority represents of the aggregate principal amount
of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 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 2.6(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.
(c) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 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 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Property Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the
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purposes of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein);
provided that, except for a default in the payment of 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.
(b) The Property Trustee shall not be deemed to
have knowledge of any default except:
(i) a default under Sections 501(1) and
501(2) of the Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible Officer
of the Property Trustee charged with the administration of the
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "CalEnergy Capital Trust ___," as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by
the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust
is c/o CalEnergy Company, Inc., 302 South 36th Street, Suite
400, Omaha, Nebraska 68131, Attention: Chief Financial
Officer, with a copy to: General Counsel. On 10 Business
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Days written notice to the Holders of Securities, the Regular Trustees may
designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration
and to the specific duties of the Property Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust 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.
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6, provided, that the registration statement
referred to in
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Section 3.6, including any amendments thereto, shall be signed by a majority of
the Regular Trustees; and
(d) a Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 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.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no
more than one series of 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 issuance of both Preferred
Securities and Common Securities on the Closing Date and any other date
Preferred Securities and Common Securities are sold pursuant to the
over-allotment option granted in the Underwriting Agreement;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement filed on Form S-3 (the "Registration
Statement") prepared by the Sponsor, including any amendments thereto
in relation to the Preferred Securities;
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(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor 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 Sponsor has determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application, prepared by
the Sponsor, to the New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing or quotation of the Preferred Securities;
(iv) to execute and deliver letters,
documents, or instruments with the Depositary relating
to the Preferred Securities;
(v) execute and file with the Commission, at such
time as determined by the Sponsor, a registration statement on Form
8-A, including any amendments thereto, prepared by the Sponsor
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Underwriting
Agreement and other related agreements providing for
the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale
of the Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the 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;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Property Trustee before taking
or refraining from taking any Ministerial Action in relation to a Special
Event;
(e) 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
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purposes of ss.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;
(f) to take all actions and perform such duties
as may be required of the Regular Trustees pursuant to the
terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
18
(o) 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;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be
an Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) 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 materially adversely affect the interests
of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Regular Trustees shall
not take any action that is inconsistent with the purposes and functions of
the Trust set forth in Section 3.3.
19
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 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:
(i) 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;
(ii) acquire any assets other than as
expressly provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Debentures;
(v) possess any power or otherwise act in
such a way as to vary the Trust assets or the terms of
the Securities in any way whatsoever;
(vi) issue any securities or other evidences
of beneficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this 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
the Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of
20
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 counsel to the effect that such
modification will not cause more than an insubstantial risk that for
United States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.8 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 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated
non-interest bearing 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 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with
this Declaration. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least
21
equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act.
(ii) engage in such ministerial activities as 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
(iii) upon written notice of distribution issued by
the Regular 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.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant
to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided, however, that if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Sponsor to pay interest
or principal on the Securities 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 proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Securities 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 rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent
22
of any payment made by the Sponsor to such Holder of Preferred Securities in
such Direct Action. In addition, if the Property Trustee fails to enforce its
rights under the Securities (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
Property Trustee's rights as holder of the Debentures, without first
instituting any legal proceeding against 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.
(f) The Property Trustee shall not resign as a
Trustee unless either:
(i) the Trust has been completely liquidated
and the proceeds of the liquidation distributed to the
Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.6.
(g) 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 actually known to a
Responsible Officer of the Property Trustee occurs and is continuing, the
Property Trustee shall, for the benefit of 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. In no event, however, shall the
Property Trustee, in its capacity as holder of the Debentures, have the power
to convert the Debentures.
(h) The Property Trustee will act as Paying Agent and
Registrar in New York 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 ss. 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and
23
a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Property Trustee shall
not take any action that is inconsistent with the purposes and functions of
the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which
a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent individual would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and
24
obligations as are specifically set forth in this
Declaration, and no implied covenants or
obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration;
but in the case of any such certificates or
opinions that by any provision hereof are
specifically required to be furnished to the
Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities relating to
the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of
this Declaration or indemnity reasonably satisfactory to the Property
25
Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree in writing with the Sponsor. Money held by the Property Trustee
need not be segregated from other funds held by it except in relation
to the Property Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for any default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, 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;
26
(ii) any direction or act of the Sponsor or
the Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officer's Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting
any action hereunder, the Property Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officer's Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor
or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration
thereof;
(v) 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
Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any 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 adequate
security and indemnity, reasonably satisfactory to the Property
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying
27
with such request or direction, including such reasonable advances as
may be requested by the Property Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall 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;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, 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;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Property
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action
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;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder the Property Trustee (i) may request
instructions from the Holders of the Securities 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
28
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;
(xi) 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
(xii) 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 right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration
other than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of ss. 3807 of the Business Trust Act.
SECTION 3.12 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and the Trustees
do not assume any responsibility for their
29
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.13 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall exist until ________ __, 2022.
SECTION 3.14 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other entity or
body, except as described in Section 3.14(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees and without
the consent of the 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 of the United States;
provided, that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the
obligations of the Trust under the Securities; or
(B) substitutes for the Preferred
Securities other securities having substantially
the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor
Securities rank the same as the Preferred
Securities with respect to Distributions, assets
and payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that
30
possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor
Securities are 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;
(iv) 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;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least to the
extent provided by the Preferred Securities Guarantee; and
(viii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust reasonably
acceptable to the Property Trustee experienced in such matters to the
effect that:
(A) such merger, consolidation,
amalgamation or replacement will not adversely affect the
rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the
31
Trust nor the Successor Entity will be required to
register as an Investment Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will be treated as a grantor trust for United States
federal income tax purposes.
(c) Notwithstanding Section 3.14(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the Common
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as
other than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date and on any other date Preferred
Securities are sold pursuant to the over-allotment option granted in the
Underwriting Agreement, the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities, as applicable:
(a) to prepare for filing by the Trust with the Commission
the Registration Statement, including any amendments thereto;
(b) to determine the States and foreign jurisdictions in
which to take appropriate action to qualify or
32
register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions that must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and
other related agreements providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, the Delaware 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
33
which has its principal place of business in the State of Delaware; (2) there
shall be at least one Regular Trustee who is an employee or officer of, or is
affiliated with the Sponsor; 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.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is resident of the State
of Delaware; or
(b) if not a natural person, an entity which has
its principal place of business in the State of Delaware,
and otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 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
34
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition
of an Investment Company solely by means of Rule 3a-5 and to the
extent Rule 3a-5 requires a trustee having certain qualifications to
hold title to the "eligible assets" of the trust, the Property
Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 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 ss. 310(b) of the Trust Indenture Act) shall
in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) 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.
(e) The initial Property Trustee shall be set
forth in Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Dela-
ware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act
through one or more Authorized Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
35
Steven A. McArthur
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
John G. Sylvia
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Craig Hammett
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
Corporate Trust Trustee Administration
Floor 21 West
New York, New York 10286
SECTION 5.6 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote
of the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the
Common Securities.
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(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Property Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Property Trustee and delivered to the Regular
Trustees and the Sponsor.
(c) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(d) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that
acts as the Property Trustee shall be effective:
(A) 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 Sponsor and
the resigning Property Trustee; or
(B) until the assets of the Trust have
been completely liquidated and the proceeds thereof
distributed to the holders of the Securities.
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
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(e) 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
5.6.
(f) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the 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.
(g) 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 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of
a Trustee shall not operate to annul the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the
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Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any meetings of
the Regular 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 (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for
the express purpose of objecting to the transaction of any activity on the
ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the
unanimous written consent of the Regular Trustees. In the event there is only
one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such
39
delegation is not prohibited by applicable law or contrary to the provisions
of the Trust, as set forth herein.
SECTION 5.11 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 paper or any further act on the part of any of
the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture), and
Additional Interest), premium and/or 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.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue
one class of convertible preferred securities, representing undivided
beneficial interests in the assets of the Trust (the "Preferred Securities"),
having such terms (the "Terms") as are set forth in Annex I and one class of
convertible common securities, representing undivided beneficial interests in
the assets of the Trust (the "Common Securities"), having such terms as are
set forth in Annex I. The Trust shall issue 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.
(b) 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.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable.
(d) 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.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
a Regular Trustee. In case any Regular Trustee of the Trust who shall have
signed any of the Securities shall cease to be such Regular Trustee before the
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 Regular 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 Regular Trustees of the Trust, although at the
date of the execution and delivery of
41
the Declaration any such person was not such a Regular Trustee.
(b) One Regular 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 Regular
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue in paragraph 5 of the Securities. 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 Section 7.6.
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 Sponsor or an Affiliate.
SECTION 7.3 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. Securities may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. 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
42
any such notation, legend or endorsement is in a form acceptable to the
Trust). The Trust at the direction of the Sponsor 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
Sponsor, 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 an Underwriting Agreement relating to the Preferred
Securities, dated ________ __, 1997, among the Trust, the Sponsor and the
underwriters named therein (the "Underwriting Agreement").
SECTION 7.4 Registrar, Paying Agent and Conversion Agent.
The Trust shall maintain in the Borough of Manhattan, City
of New York, State of New York or in the city of London, England, as the case
may be, (i) an office or agency where Preferred Securities may be presented
for registration of transfer or from exchange ("Registrar"), (ii) an office or
agency where Preferred Securities may be presented for payment ("Paying
Agent") and 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 Trust may appoint
the Registrar, the Paying Agent and the Conversion Agent and may appoint one
or more co-registrars, one or more additional 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 Trust may
change any Paying Agent, Registrar, co-registrar or Conversion Agent without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Regular Trustees. The Trust
shall notify the Property Trustee of the name and address of any Agent not a
party to this Declaration. If the Trust fails 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
43
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.
SECTION 7.5 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 Trust 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
Sponsor or an Affiliate of the Trust or the Sponsor 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 7.6 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, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property Trustee
or the Trust, an indemnity bond must be sufficient in the judgment of both to
protect the Trustees, the Property Trustee, the Sponsor or any authenticating
agent from any loss which any of them may suffer if a Security is replaced.
The Sponsor 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
44
payable, or is about to be purchased by the Sponsor pursuant to Article III
hereof, the Sponsor in its discretion may, instead of 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 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the
Preferred Securities authenticated by the Property Trustee except for those
cancelled 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 7.6 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 bona fide purchaser.
If Preferred Securities are considered paid in accordance
with the terms of this Declaration, they cease to be outstanding and interest
on them ceases to accrue.
A Preferred Security does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the
Security.
SECTION 7.8 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 Sponsor or an Affiliate of the Sponsor, 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 7.9 Temporary Securities.
(a) Until definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the Property
Trustee shall
45
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 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). Such exchange shall be made by the Trust at its own expense and
without any charge therefor. Until so exchanged, temporary Securities shall in
all respects be entitled to the same benefits and subject to the same
limitations under this Declaration as Securities in definitive certificated
form authenticated (in the case of Preferred Securities) and delivered
hereunder.
SECTION 7.10 Cancellation.
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 dispose of cancelled Preferred Securities as the Trust directs. 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.
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ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor, upon the
consent of at least a Majority in liquidation amount of the
Securities, voting together as a single class, to file a certificate
of cancellation with respect to the Trust, or the revocation of the
charter of the Sponsor and the expiration of 90 days after the date
of revocation without a reinstatement thereof, except, in each case,
to the extent permitted by Article Eight of the Indenture;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor or the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) upon the occurrence and continuation of a Tax
Event or an Investment Company Event pursuant to which the Sponsor
causes the Regular Trustees to dissolve the Trust in accordance with
the terms of the Securities;
(vi) upon the distribution of the common
stock of the Sponsor to Holders of all outstanding
Securities upon conversion of all such Securities;
(vii) the expiration of the term of the Trust
on ________ __, 2012; or
(viii) before the issuance of any Securities,
with the consent of all the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a), and upon
47
the completion of the winding up of the Trust, one of the Trustees (each of
whom is hereby authorized to take such action) shall file a certificate of
cancellation with the Secretary of State of the State of Delaware thereby
terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 General.
(a) 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 Trust shall issue and the Property Trustee shall
authenticate Preferred Securities at the Registrar's request.
(b) Subject to this Article IX, Preferred
Securities shall be freely transferable.
(c) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(d) Subject to this Article IX, the Sponsor and any Related
Party may only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
48
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company
or the transferee would become an Investment Company.
SECTION 9.2 Transfer of Securities.
(a) The Regular 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 Regular 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 Regular Trustees shall cause one or more new Securities to be
issued 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 Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Security surrendered for registration of transfer shall be canceled 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.
(b) 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.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Security represented by such
Certificate for purposes of
49
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 shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
certificates (each a "Global Preferred Security"), to be delivered to the
Depositary, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Global Preferred Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Depositary,
and no Preferred Security Beneficial Owner will receive a definitive Preferred
Security Certificate representing such Preferred Security Beneficial Owner's
interests in such Global Preferred Securities, except as provided in Section
9.7. Unless and until definitive, fully registered Preferred Securities
Certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be
in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal
with the Depositary for all purposes of this Declaration (including the
payment of Distributions on the Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Preferred Securities and shall
have no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Bene-
ficial Owners shall be exercised only through the Depositary
and shall be limited to those established by law and agree-
50
ments between such Preferred Security Beneficial Owners and the Depositary
and/or the Participants and receive and transmit payments of Distributions on
the Global Certificates to such Participants. The Depositary will make book
entry transfers among the Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, the Regular 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 9.6 Appointment of Successor Clearing Agency.
If the Depository elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates
shall be prepared by the Regular Trustees on behalf of
the Trust with respect to such Preferred Securities;
and
51
(d) upon surrender of the Global Securities by the Clearing
Agency, accompanied by registration instructions, the Regular
Trustees shall cause Definitive Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive
Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which
Preferred Securities may be listed, or to conform to usage.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Decla-
ration, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the Holders
of the Securities which shall be made solely from assets of the
Trust; or
(ii) be required to pay to the Trust or to
any Holder of Securities any deficit upon dissolution
of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable as
principal obligor, jointly and severally with the Trust, for all of the debts
and obligations of the Trust (other than with respect to the Securities).
52
(c) Pursuant to ss. 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 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and
53
liabilities of an Indemnified Person 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.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists
or arises between an Indemnified Person and any Covered
Person; or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or 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.
(c) Whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act
under such express standard and shall not be subject to
54
any other or different standard imposed by this Declaration or by
applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that
he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor by reason of the fact that he is
or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except
that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only
55
to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees and expenses)
incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall
be paid by the Debenture Issuer in advance of the final disposition
of such action, suit or proceeding. Notwithstanding the foregoing, no
advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a
majority vote of a quorum of disinterested Regular Trustees, (ii) if
such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of
the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such person did not believe to be in or not opposed to
the best interests of the Trust, or, with respect to any criminal
proceeding, that such Company
56
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful.
(v) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of
the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Debenture Issuer and each
Company Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or modification
of this Section 10.4(a) shall require the consent of the Regular
Trustees and not affect any rights or obligations then existing.
(vi) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
57
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee and the Delaware Trustee (each of
the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability or expense including taxes (other than taxes based
on the income of such Fiduciary Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration or the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and
the Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person,
58
the Sponsor, the Delaware Trustee and the Property Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.
Any Covered Person, the Delaware Trustee and the Property Trustee may engage
or be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, books of account, records
and supporting documents, which shall reflect in reasonable detail, each
material transaction of the Trust. The books of account shall be maintained in
accordance with generally accepted accounting principles consistently applied.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end
of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss, which 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 Regular Trustees.
(c) The Regular 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 re-
quired by the Code and the Treasury Regulations. Not-
59
withstanding any right under the Code to deliver any such statement at a later
date, the Regular Trustees shall endeavor to deliver all such statements
within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the
name and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of 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 Regular Trustees;
provided, however, that the Property Trustee shall designate the signatories
for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular 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
60
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by
any applicable terms of the Securities, this Declaration may only be amended
by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are
more than two Regular Trustees a majority of the Regul-
ar Trustees);
(ii) if the amendment affects the rights,
powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the
Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such pur-
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or immunities
of the Property Trustee, the Property Trustee shall have first
received:
(A)an Officer's Certificate from each
of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of
61
this Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such
amendment would be to:
(A) cause the Trust to fail to continue
to be classified for purposes of United States
federal income taxation as a grantor trust;
(B) reduce or otherwise adversely
affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be
an Investment Company which is required to be
registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of
the Holders of a majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
62
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in
this Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iv) conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders.
63
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent.
(a) Meetings of the Holders of any class of Securities may
be called at any time by the Regular Trustees (or as provided in the terms of
the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least a Majority in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of Securities
calling a meeting shall specify in writing the 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.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat at least
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 or over the counter market on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities
may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not
less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at
which all Holders of Secu-
64
rities having a right to vote thereon were present and voting, but in
no event less than a Majority in liquidation amount of the
outstanding Securities. Prompt notice of the taking of action without
a meeting shall be given to the Holders of Securities entitled to
vote who have not consented in writing. The Regular Trustees may
specify that any written ballot submitted to the Security Holders for
the purpose of taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize
any Person to act for it by proxy on all matters in which 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 interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) 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 Regular
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such right to
vote.
65
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration
and at the Closing Date, and each Successor Property Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Property
Trustee's acceptance of its appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws
of the State of New York, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has 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 affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the
Declaration by the Property Trustee does not conflict with or constitute a
breach of the certificate of incorporation or by-laws of the Property Trustee.
(d) At the Closing Date, the Property Trustee will be the
record holder of the Debentures and the Property Trustee has not knowingly
created any liens or encumbrances on such Debentures.
66
(e) No consent, approval or authorization of, or
registration with or notice to, any New York State or Federal banking
authority is required for the execution, delivery or performance by the
Property Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration
and at the Closing Date, and each Successor Delaware Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Delaware
Trustee's acceptance of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration has 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).
(c) 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.
(d) 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 this Declaration.
67
(e) The Delaware Trustee is a natural person who is a
resident of the State of Delaware, or, if not a natural person, an entity
which has its principal place of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees
at the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: General Counsel
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Department
(c) 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):
68
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: General Counsel
(e) 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 other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State
of Delaware and all rights and remedies shall be governed by such laws without
regard to the principles of conflict of laws of the State of Delaware or any
other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees 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 (i) the filing with any court or governmental body or agency
of trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the
69
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
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 (vii) 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 as set forth or referenced in this
Declaration. Section 3540 of Title 12 of the Delaware Code shall not apply to
the Trust.
SECTION 14.3 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 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or cir-
70
cumstances other than those to which it is held invalid, shall not be affected
thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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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.
Steven A. McArthur
as Trustee
-----------------------
Craig Hammett
as Trustee
-----------------------
Gregory Abel
as Trustee
-----------------------
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:_____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:_____________________________
Name:
Title:
CALENERGY COMPANY, INC.
as Sponsor
By:_____________________________
Name:
Title:
ANNEX I
TERMS OF SECURITIES
EXHIBIT A-1
FORM OF PREFERRED SECURITY
EXHIBIT A-2
FORM OF COMMON SECURITY
EXHIBIT B
SPECIMEN OF DEBENTURE
EXHIBIT C
UNDERWRITING AGREEMENT