Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-707
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Walnut, Kansas City, Missouri 64106-2124
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (816) 556-
2200
Indicate by check mark whether the registrant (1) has filed
all
reports required to be filed by Section 13 or 15(d) of the
Securities
Exchange Act of 1934 during the preceding 12 months (or for
such
shorter period that the registrant was required to file such
reports),
and (2) has been subject to such filing requirements for the
past 90
days.
Yes (X) No ( )
The number of shares outstanding of the registrant's Common
stock at
May 7, 1997, was 61,895,819 shares.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
March 31 December 31
1997 1996
ASSETS
UTILITY PLANT, at original cost
Electric $3,479,539 $3,472,607
Less-accumulated depreciation 1,261,837 1,238,187
Net utility plant in service 2,217,702 2,234,420
Construction work in progress 84,863 69,577
Nuclear fuel, net of amortization of
$89,655 and $84,540 36,797 39,497
Total 2,339,362 2,343,494
REGULATORY ASSET - RECOVERABLE TAXES 126,000 126,000
INVESTMENTS AND NONUTILITY PROPERTY 306,419 231,874
CURRENT ASSETS
Cash and cash equivalents 25,112 23,571
Customer accounts receivable, net of allowance
for doubtful accounts of $1,360 and $1,644 15,679 27,093
Other receivables 21,632 36,113
Fuel inventories, at average cost 17,717 19,077
Materials and supplies, at average cost 47,297 47,334
Deferred income taxes 3,672 2,737
Other 6,778 5,055
Total 137,887 160,980
DEFERRED CHARGES
Regulatory assets
Settlement of fuel contracts 9,358 9,764
KCC Wolf Creek carrying costs 684 1,368
Other 25,114 26,615
Other deferred charges 28,762 14,417
Total 63,918 52,164
Total $2,973,586 $2,914,512
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stock-authorized 150,000,000 shares
without par value-61,908,726 shares issued-
stated value $449,697 $449,697
Retained earnings 414,774 455,934
Unrealized gain on securities available for sale 1,681 6,484
Capital stock premium and expense (1,666) (1,666)
Common stock equity 864,486 910,449
Cumulative preferred stock 89,000 89,000
Cumulative redeemable preferred stock 62 62
Refinanced short-term borrowings 93,000 0
Long-term debt 925,136 944,136
Total $1,971,684 $1,943,647
CURRENT LIABILITIES
Notes payable to banks 1,361 0
Commercial paper 8,000 0
Current maturities of long-term debt 71,091 26,591
Accounts payable 36,745 55,618
Accrued taxes 11,087 18,443
Accrued interest 19,863 21,054
Accrued payroll and vacations 21,395 25,558
Accrued refueling outage costs 9,280 7,181
Other 12,031 11,980
Total 190,853 166,425
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 638,508 643,189
Deferred investment tax credits 66,051 67,107
Other 106,490 94,144
Total 811,049 804,440
COMMITMENTS AND CONTINGENCIES (note 4)
Total $2,973,586 $2,914,512
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<TABLE>
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(thousands of dollars)
<CAPTION>
Year to Date Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
ELECTRIC OPERATING REVENUES $ 194,744 $ 206,624 $ 892,039 $ 893,673
OPERATING EXPENSES
Operation
Fuel 34,922 30,773 144,654 135,425
Purchased power 11,246 13,985 49,716 46,036
Other 43,923 43,499 181,143 177,653
Maintenance 16,816 18,029 70,282 75,790
Depreciation 27,842 24,716 107,038 97,802
Taxes
Income 8,530 13,413 63,272 78,858
General 22,692 24,361 95,579 97,325
Deferred Wolf Creek costs
amortization 684 2,904 9,397 12,235
Total 166,655 171,680 721,081 721,124
OPERATING INCOME 28,089 34,944 170,958 172,549
OTHER INCOME
Allowance for equity funds
used during construction 260 660 1,968 2,704
Miscellaneous income 3,893 741 7,995 1,123
Miscellaneous deductions (62,161) (3,785) (113,548) (13,213)
Income taxes 30,233 6,221 60,414 16,816
Total (27,775) 3,837 (43,171) 7,430
INCOME BEFORE INTEREST CHARGES 314 38,781 127,787 179,979
INTEREST CHARGES
Long-term debt 14,516 13,424 55,031 53,275
Short-term debt 839 118 1,972 687
Miscellaneous 875 1,106 4,609 3,600
Allowance for borrowed funds
used during construction (784) (390) (2,341) (1,805)
Total 15,446 14,258 59,271 55,757
PERIOD RESULTS
Net income (loss) (15,132) 24,523 68,516 124,222
Preferred stock
dividend requirements 955 957 3,788 3,942
Earnings (Loss) applicable to
common stock (16,087) 23,566 64,728 120,280
Average number of common
shares outstanding 61,896 61,902 61,900 61,902
Earnings (Loss) per common share ($0.26) $0.38 $1.05 $1.94
Cash dividends per
common share $0.405 $0.390 $1.605 $1.550
<F1>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
Year to Date Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(15,132) $ 24,523 $ 68,516 $124,222
Adjustments to reconcile net income
(loss)to net cash from operating
activities:
Depreciation 27,842 24,716 107,038 97,802
Amortization of:
Nuclear fuel 5,115 1,197 20,012 12,464
Deferred Wolf Creek costs 684 2,904 9,397 12,235
Other 1,362 1,409 5,460 7,533
Deferred income taxes (net) (2,885) 5,731 (17,278) 7,278
Deferred investment tax credit
amortization and reversals (1,056) (1,024) (4,195) (4,242)
Deferred storm costs 0 0 (8,885) 0
Deferred merger costs (4,787) (5,383) 596 (5,383)
Allowance for equity funds used
during construction (260) (660) (1,968) (2,704)
Cash flows affected by changes in:
Receivables 25,895 17,810 9,547 (9,863)
Fuel inventories 1,360 5,083 (697) 4,047
Materials and supplies 37 1,503 (1,625) (805)
Accounts payable (18,873) (465) (15,296) 10,211
Accrued taxes (7,356) 1,543 (30,182) (17,084)
Accrued interest (1,191) 4,885 (1,928) 11,765
Wolf Creek refueling outage
accrual 2,099 (13,006) 8,723 (4,743)
Pension and postretirement benefit
obligations (532) (519) (97) (2,290)
Other operating activities (2,238) 1,878 7,730 12,864
Net cash from operating
activites 10,084 72,125 154,868 253,307
CASH FLOWS FROM INVESTING ACTIVITIES
Utility capital expenditures (27,402) (29,549) (98,800) (136,962)
Allowance for borrowed funds used
during construction (784) (390) (2,341) (1,805)
Purchases of investments (77,241) (17,589) (95,014) (67,893)
Purchases of nonutility property (1,611) 0 (22,006) 0
Other investing activities (4,397) (1,804) (3,524) 3,936
Net cash from investing
activities (111,435) (49,332) (221,685) (202,724)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 32,000 11,827 155,614 118,719
Repayment of long-term debt (6,500) 0 (80,730) (33,428)
Net change in short-term borrowings 102,361 (9,000) 92,361 (31,500)
Dividends paid (26,028) (25,112) (103,119) (99,925)
Other financing activities 1,059 (149) (946) 2,834
Net cash from financing
activities 102,892 (22,434) 63,180 (43,300)
NET CHANGE IN CASH AND CASH
EQUIVALENTS 1,541 359 (3,637) 7,283
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 23,571 28,390 28,749 21,466
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $25,112 $28,749 $25,112 $28,749
CASH PAID DURING THE PERIOD FOR:
Interest (net of amount capitalized) $17,019 $8,962 $60,514 $42,354
Income taxes $0 $5,072 $53,272 $68,150
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(thousands of dollars)
Year to Date Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
Beginning balance $455,934 $449,966 $449,377 $425,080
Net income (loss) (15,132) 24,523 68,516 124,222
440,802 474,489 517,893 549,302
Dividends declared
Preferred stock - at required rates 960 970 3,772 3,977
Common stock 25,068 24,142 99,347 95,948
Ending balance $414,774 $449,377 $414,774 $449,377
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements
In management's opinion, the consolidated interim financial
statements reflect all adjustments (which include only normal
recurring adjustments) necessary to present fairly the results of
operations for the interim periods presented. These statements and
notes should be read in connection with the financial statements and
related notes included in our 1996 annual report on Form 10-K.
1. AGREEMENT AND PLAN OF MERGER WITH WESTERN RESOURCES
On February 7, 1997, Kansas City Power & Light Company (KCPL) and
Western Resources, Inc. (Western Resources) entered into an Agreement
and Plan of Merger (the Merger Agreement) to form a strategic business
combination. The effective time of the merger is dependent upon all
conditions of the Merger Agreement being met or waived. At the
effective time, KCPL will merge with and into Western Resources, with
Western Resources being the surviving corporation.
Western Resources first delivered an unsolicited exchange offer
to KCPL's Board of Directors during the second quarter of 1996. This
initial offer, subject to numerous conditions, proposed the exchange
of $28 (later increased to $31) worth of Western Resources stock for
each share of KCPL stock. After careful consideration, both offers
were rejected by KCPL's Board of Directors. In July 1996 Western
Resources commenced an exchange offer for KCPL common stock. In late
1996 KCPL began discussing a possible merger with Western Resources
leading to the Merger Agreement.
Under the terms of the Merger Agreement, KCPL common stock will
be exchanged for Western Resources common stock valued at $32.00,
subject to a conversion ratio limiting the amount of Western Resources
common stock that holders of KCPL common stock would receive per share
of KCPL common stock to no more than 1.1 shares (if Western Resources'
stock is priced at or below $29.09 per share), and no less than 0.917
shares (if Western Resources' stock is priced at or above $34.90 per
share). However, there is a provision in the Merger Agreement that
allows KCPL to terminate the merger if Western Resources' stock price
drops below $27.64 and either the Standard and Poor's Electric
Companies Index increases or the decline in Western Resources stock
exceeds by approximately 5% any decline in this index. Western
Resources could avoid this termination by improving the conversion
ratio.
The transaction is subject to several closing conditions
including approval by each company's shareholders, approval by a
number of regulatory authorities (statutory approvals) and dissenting
shares equaling less than 5.5% of KCPL's outstanding shares. If the
effective time has not occurred by June 30, 1998 (the termination
date), either party may terminate the agreement as long as they did
not contribute to the delay. This termination date will be
automatically extended to June 30, 1999, if all of the Merger
Agreement closing conditions have been met except for certain
conditions relating to statutory approvals.
The Merger Agreement does not allow KCPL to increase its common
stock dividend prior to the effective time or termination. It also
requires KCPL to redeem all outstanding shares of preferred stock
prior to completion of the merger.
If the Merger Agreement is terminated under certain
circumstances, a payment of $50 million will be due Western Resources
if, within two and one-half years following termination, KCPL agrees
to consummate a business combination with a third party that made a
proposal to combine prior to termination. Western Resources will pay
KCPL $5 to $35 million if the Merger Agreement is terminated and all
closing conditions are satisfied other than conditions relating to
Western Resources receiving a favorable tax opinion, a favorable
letter from its accountants regarding pooling accounting, favorable
statutory approvals, or an exemption from the Public Utility Holding
Company Act of 1935.
In February 1997 KCPL paid UtiliCorp United Inc. (UtiliCorp) $53
million for agreeing to combine with Western Resources within two and
one-half years from the termination of KCPL's agreement to merge with
UtiliCorp. This agreement was terminated due to failure of KCPL
shareholders to approve the transaction with UtiliCorp.
During the first quarter of 1997, $4.8 million of merger-related
costs were deferred by KCPL and are included in Other deferred
charges. These costs will be expensed in the first reporting period
subsequent to closing of the merger.
2. SECURITIES AVAILABLE FOR SALE
Certain investments in equity securities are accounted for as
securities available for sale and adjusted to market value with
unrealized gains (or losses), net of deferred income taxes, reported
as a separate component of shareholders' equity.
The cost of securities available for sale held by KLT Inc. (KLT),
a wholly-owned subsidiary of KCPL, was $5 million as of March 31, 1997
and December 31, 1996. Unrealized gains, net of deferred income
taxes, decreased to $1.7 million at March 31, 1997, from $6.5 million
at December 31, 1996.
3. CAPITALIZATION
From January 1 to March 31, 1997, KCPL repaid $6.5 million of
medium-term notes. KCPL is authorized to issue up to $300 million in
unsecured medium-term notes under an indenture dated December 1, 1996.
As of March 31, 1997, no unsecured medium-term notes had been issued.
In April 1997 KCPL Financing I (Trust), a wholly-owned subsidiary
of Kansas City Power & Light Company, issued $150,000,000 of 8.3%
preferred securities. The sole asset of the Trust is subordinated
debentures, due 2037, issued by KCPL. The terms and interest payments
on these debentures correspond to the terms and dividend payments on
the preferred securities. KCPL guarantees the payment of
distributions on the preferred securities to the extent that KCPL has
made payments of interest or principal on the debentures. These
payments will be reflected as Miscellaneous Interest Charges in the
Consolidated Statement of Income and will be tax deductible by KCPL.
KCPL may elect to defer interest payments on the debentures for a
period up to 20 consecutive quarters, causing dividend payments on the
preferred securities to be deferred as well. In case of a deferral,
interest and dividends will continue to accrue, along with quarterly
compounding interest on the deferred amounts. KCPL may redeem all or
a portion of the debentures after March 31, 2002, requiring an equal
amount of preferred securities to be redeemed at face value plus
accrued and unpaid distributions. KCPL used $93,000,000 of the
proceeds from this issuance to repay short-term obligations. This
amount is reflected in the consolidated balance sheet at March 31,
1997, as "Refinanced short-term borrowings".
From April 1 through May 7, 1997, KLT's long-term debt, including
current maturities, increased $6.6 million.
4. LEGAL PROCEEDINGS
Jack R. Manson (Manson), as a representative of KCPL's
shareholders, alleged in a District Court proceeding, that KCPL and
its directors breached their fiduciary duties in adopting the Amended
Merger Agreement with UtiliCorp (Agreement). Manson also alleged
their actions 1) were illegal, 2) illegally deprived KCPL
shareholders of voting and appraisal rights under Missouri law, and 3)
were a disproportionate response to Western Resources' acquisition
offer. Also, on June 7, 1996, Western Resources and Robert L. Rives
each alleged against KCPL in the same court proceeding, that the
Agreement was illegal under Missouri law and the directors had
breached their fiduciary duties by adopting the Agreement.
By order dated November 25, 1996, the District Court allowed
Manson to amend his allegation to allege that the directors breached
their fiduciary duties by refusing to negotiate a merger with Western
Resources and committed reckless, grossly negligent, or negligent
waste of corporate assets by pursuing the merger with UtiliCorp.
Manson seeks monetary damages in an unspecified amount for the waste
of corporate assets. KCPL filed a motion on December 9, 1996, to
dismiss Manson's amendment; it is currently pending before the
District Court. The Company cannot predict the outcome of these
proceedings at this time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
REGULATION AND COMPETITION
As competition develops throughout the electric utility industry,
we are positioning Kansas City Power & Light Company (KCPL) to excel
in an open market. We are improving the efficiency of KCPL's core
utility operations, lowering prices and offering new services. KCPL
now offers customized energy packages to larger customers, including
options offering natural gas contracts. We are also creating growth
through our unregulated subsidiary (see Nonregulated Opportunities
below). As competition presents new opportunities, we will consider
various strategies including partnerships, acquisitions, combinations,
additions to or dispositions of service territory, and restructuring
wholesale and retail businesses. We have entered an Agreement and
Plan of Merger with Western Resources, Inc. (Western Resources). This
agreement was reached after nine months of defending against an
unsolicited exchange offer (see Note 1 to the Consolidated Financial
Statements).
In December 1996 the Federal Energy Regulatory Commission (FERC)
issued a statement concerning electric utility mergers. Under the
statement, companies must demonstrate that their merger does not
adversely affect competition or wholesale rates. As remedies, FERC
may consider a range of conditions including transmission upgrades or
divestitures of generating assets.
Competition in the electric utility industry was accelerated with
the National Energy Policy Act of 1992. This gave FERC the authority
to require electric utilities to provide transmission line access to
independent power producers (IPPs) and other utilities (wholesale
wheeling). KCPL, already active in the wholesale wheeling market, was
one of the first utilities to receive FERC's approval of an open-
access tariff for wholesale wheeling transactions. In April 1996 FERC
issued an order requiring all owners of transmission facilities to
adopt open-access tariffs and participate in wholesale wheeling. KCPL
has made the necessary filings to comply with that order.
FERC's April 1996 order is likely to encourage more movement
toward retail competition at the state level. An increasing number of
states have already adopted open access requirements for utilities'
retail electric service, allowing competing suppliers access to their
retail customers (retail wheeling). Many other states are actively
considering retail wheeling. Kansas has created a retail wheeling
task force to study and report on related issues. In Missouri,
legislative committees are being formed to study the issue while the
Missouri Public Service Commission (MPSC) has established a task force
to plan for implementation of retail wheeling if authorized by law.
Competition through retail wheeling could result in market-based
rates below current cost-based rates. This would provide growth
opportunities for low-cost producers and risks for higher-cost
producers, especially those with large industrial customers. Lower
rates and the loss of major customers could result in under-utilized
assets (stranded investment) and place an unfair burden on the
remaining customer base or shareholders. If an adequate and fair
provision for recovery of these lost revenues is not provided, certain
generating assets may have to be evaluated for impairment and
appropriate charges recorded against earnings. In addition to lower
profit margins, market-based rates could also require generating
assets to be depreciated over shorter useful lives, increasing
operating expenses.
Although Missouri and Kansas have not yet authorized retail
wheeling, we believe KCPL is positioned well to compete in an open
market with its diverse customer mix and pricing strategies. About
22% of KCPL's retail mwh sales are to industrial customers compared to
the utility industry average of about 35%. KCPL has a flexible rate
structure with industrial rates that are competitively priced within
our region. In addition, long-term contracts are in place or under
negotiation for a large portion of KCPL's industrial sales. There has
not been direct competition for retail electric service in our service
territory although there has been competition in the bulk power market
and between alternative fuels.
Increased competition could also force utilities to change
accounting methods. Financial Accounting Standards Board (FASB)
Statement No. 71 _ Accounting for Certain Types of Regulation, applies
to regulated entities whose rates are designed to recover the costs of
providing service. An entity's operations could stop meeting the
requirements of FASB 71 for various reasons, including a change in
regulation or a change in the competitive environment for a company's
regulated services. For those operations no longer meeting the
requirements of regulatory accounting, regulatory assets would be
written off. KCPL's regulatory assets, totaling $161 million at March
31, 1997, will be maintained as long as FASB 71 requirements are met.
It is possible that competition could eventually have a
materially adverse affect on KCPL's results of operations and
financial position. Should competition eventually result in a
significant charge to equity, capital costs and requirements could
increase significantly.
NONREGULATED OPPORTUNITIES
KLT Inc. (KLT) is a wholly-owned subsidiary pursuing
nonregulated, mainly energy-related business ventures. KLT's strategy
capitalizes on new market opportunities by combining our expertise in
energy-related fields with the knowledge of our joint venture
partners. Existing ventures include investments in domestic and
international nonregulated power production, energy services, oil and
gas reserves, telecommunications, and affordable housing limited
partnerships.
We had a total equity investment in KLT of $99 million as of
March 31, 1997, and expect that investment to grow to about $210
million within the next five years. KLT's consolidated assets at
March 31, 1997, totaled $293 million. Within the next five years we
expect KLT consolidated assets of about $800 million, generated
through the $210 million of equity investment, subsidiary retained
earnings and borrowings. The growth of KLT accounts for the majority
of the increase in KCPL's consolidated investments and nonutility
property.
RESULTS OF OPERATIONS
Three-month three months ended March 31, 1997, compared
period: with three months ended March 31, 1996
Twelve-month twelve months ended March 31, 1997, compared
period: with twelve months ended March 31, 1996
EARNINGS OVERVIEW
Earnings Per Share (EPS)
For the Periods Ended March
31
1997 1996 Decrease
Three months ended $(0.26) $0.38 $(0.64)
Twelve months ended $1.05 $1.94 $(0.89)
KCPL's pursuit of its strategic options resulted in the September
1996 termination of a merger agreement with UtiliCorp United Inc.
(UtiliCorp) and the February 1997 announcement of our agreement to
combine with Western Resources. These actions triggered KCPL's
payment of $53 million to UtiliCorp under provisions of that
agreement, lowering EPS for the three-month period by $0.52.
Continued implementation of rate reductions approved by the MPSC in
July 1996 also lowered EPS for the three-month period by an estimated
$0.11.
The decrease in EPS for the twelve-month period reflects the
payment to UtiliCorp ($0.52), the estimated twelve-month impact of the
Missouri rate reduction ($0.14), and merger costs expensed in the
second and third quarters of 1996 ($0.31). Mild summer temperatures
and an increase in depreciation expense also had a negative impact on
EPS for the twelve-month period. Factors contributing positively to
EPS for the twelve-month period included continued load growth and an
increase in bulk power sales.
MEGAWATT-HOUR (MWH) SALES AND OPERATING REVENUES
Sales and revenue data:
Increase (Decrease) from Prior Year
Three-Month Twelve-Month
Period Period
Mwh Revenues Mwh Revenues
(millions) (millions)
Retail sales:
Residential 0% $ (3) (2%) $ (9)
Commercial 1% (8) 3% (3)
Industrial (1%) (3) 5% -
Other (1%) - (3%) -
Total retail 0% (14) 2% (12)
Sales for resale:
Bulk power sales 19% 2 14% 13
Other 32% - 35% -
Total (12) 1
Other revenues - (3)
Total electric operating revenues $ (12) $ (2)
During 1996 the MPSC approved a new stipulation and agreement
authorizing a $20 million revenue reduction in two phases, and an
increase in depreciation and amortization expense by $9 million per
year. In July 1996 we implemented phase one of the revenue reduction
designed to reduce revenues from commercial and industrial customers
by an estimated $9 million per year. This decrease is achieved with
an increase in summer revenues offset by a larger decrease in winter
revenues. This design more closely follows our increased costs of
generating electricity in the summer. The second phase of this
stipulation, implemented January 1, 1997, further reduces Missouri
residential, commercial and industrial revenues by an estimated $11
million per year. The effect of the stipulation lowered revenues for
the three-month period by about $11 million, and the twelve-month
period by about $14 million.
These rate reductions, combined with seasonally lower sales in
March 1997 versus December 1996, resulted in a lower accounts
receivable balance at March 31, 1997, compared with December 31, 1996.
These rate reductions are the main reason retail revenues
decreased 7% for the three-month period on relatively flat mwh sales,
and decreased 1% for the twelve-month period despite a 2% increase in
mwh sales. Milder weather also decreased retail sales revenue for the
three- and twelve-month periods, but this decrease was largely offset
by continued load growth.
KCPL has long-term sales contracts with certain major industrial
customers. These contracts are tailored to meet customers' needs in
exchange for their long-term commitment to purchase energy. Long-term
contracts are in place for a large portion of KCPL's industrial sales
and more contracts are under negotiation. For the current twelve-
month period additional contracts reduced the average mwh price of
industrial sales.
Bulk power sales vary with system requirements, generating unit
and purchased power availability, fuel costs and the requirements of
other electric systems. Wolf Creek's spring 1996 refueling outage
(see Wolf Creek section) contributed to lower bulk power sales in the
prior three- and twelve-month periods.
Total revenue per mwh sold varies with changes in rate tariffs,
the mix of mwh sales among customer classifications and the effect of
declining price per mwh as usage increases. An automatic fuel
adjustment provision is included in only sales for resale tariffs,
which apply to less than 1% of revenues.
Future mwh sales and revenues per mwh will also be affected by
national and local economies, weather and customer conservation
efforts. Competition, including alternative sources of energy such as
natural gas, cogeneration, IPPs and other electric utilities, may also
affect future sales and revenue.
FUEL AND PURCHASED POWER
Combined fuel and purchased power expenses for the three-month
period increased only 3% while total mwh sales (total of retail and
sales for resale) increased 5%. The difference is due mainly to
additional replacement power expense incurred in the prior three-month
period during Wolf Creek's spring 1996 refueling outage. That outage
began one month early and lasted 19 days longer than planned (see Wolf
Creek section).
Combined fuel and purchased power expenses for the twelve-month
period increased 7% while total mwh sales increased only 5%. The
additional increase in expense is due mainly to a $6 million increase
in capacity purchases. Capacity purchases provide a cost effective
alternative to constructing new capacity. This increase is partially
offset by a $2 million decrease in expense from coal inventory
adjustments. In addition, the prior twelve-month period includes the
additional costs incurred for Wolf Creek's 1996 refueling outage
(discussed above) and a 1995 forced generating station outage. During
July 1995 a fire forced an outage at LaCygne I, a low-cost, coal-fired
generating unit. We replaced the power by increasing the usage of
higher-cost, coal-fired units and purchasing power on the wholesale
market. Damage to the unit was covered by insurance, but uninsured,
incremental fuel and purchased power costs were about $4 million.
The MMBTU price of nuclear fuel remains substantially less than
the MMBTU price of coal, despite increasing 27% for the twelve-month
period. Nuclear fuel costs averaged 61% of the price of coal during
the current twelve months compared with 46% during the prior twelve-
month period. We expect this relationship and the price of nuclear
fuel to remain fairly constant through the year 2001. During both
twelve-month periods, coal represented about 75% of generation and
nuclear fuel about 25%.
The MMBTU price of coal decreased 4% for the twelve month period.
Our coal procurement strategies continue to provide coal costs well
below the regional average. We expect coal costs to remain fairly
consistent with current levels through 2001.
OTHER OPERATION AND MAINTENANCE EXPENSES
Combined other operation and maintenance expenses for the three-
and twelve-month periods varied slightly, due largely to the timing of
scheduled maintenance programs.
We continue to emphasize new technologies, improved methods and
cost control. We are changing processes to provide increased
efficiencies and improved operations. Through the use of cellular
technology, a majority of customer meters are read automatically.
DEPRECIATION AND AMORTIZATION
The increase in depreciation expense for the three- and twelve-
month periods reflects the implementation of the Missouri stipulation
and agreement discussed in the revenue section as well as normal
increases in depreciation from capital additions. The Missouri
stipulation and agreement, effective July 1, 1996, authorized a $9
million annual increase in depreciation expense at about the same time
the Missouri portion of Deferred Wolf Creek costs became fully
amortized in December 1996. This amortization totaled about $9
million per year.
The Kansas portion of Deferred Wolf Creek costs will be fully
amortized in the second quarter of 1997, removing all regulatory
assets created from the completion of Wolf Creek construction in 1985.
Amortization of the Kansas portion of this asset totaled about $3
million per year.
INCOME TAXES
The decrease in operating income taxes for the three-month period
reflects lower taxable operating income. The decrease for the twelve-
month period reflects lower taxable operating income, adjustments
necessary to reflect the filing of the 1995 tax returns and the
settlement with the Internal Revenue Service regarding tax issues
included in the 1985 through 1990 tax returns.
OTHER INCOME
Miscellaneous Income
Miscellaneous income for the prior twelve-month period included
an adjustment to reduce a 1995 gain from the sale of steel
railcars by $3 million. The adjustment was based on a re-
calculation of the cars' net cost. Miscellaneous income for the
current three- and twelve-month periods includes increased
revenues from subsidiary operations.
Miscellaneous Deductions
Miscellaneous deductions for the three- and twelve-month periods
increased due to a $53 million payment to UtiliCorp in February
1997. The September 1996 termination of the UtiliCorp merger
agreement and the February 1997 announcement of our agreement to
combine with Western Resources, triggered the payment to
UtiliCorp under provisions of the UtiliCorp merger agreement.
The twelve-month period also reflects $31 million in merger
related costs incurred in the second and third quarters of 1996;
these costs consist of $13 million in previously deferred merger
costs expensed as a result of terminating the merger agreement
with UtiliCorp, a $5 million termination fee paid upon
termination, and $13 million in costs to defend against Western
Resources' unsolicited exchange offer.
Both periods reflect increased subsidiary operating and investing
activities. Total subsidiary expenses, including interest
charges discussed below, are substantially offset by related tax
benefits.
Income Taxes
Income tax reductions for the three- and twelve-month periods
increased primarily due to the increases in miscellaneous
deductions discussed above. Additionally, during the first
quarter of 1997 we accrued tax credits of $6 million, or one-
fourth of the total expected 1997 credits, related to affordable
housing partnership investments and oil and gas investments.
This is an increase of $3 million compared with the tax credits
accrued during the first quarter of 1996. Tax credits from the
investments in affordable housing more than offset the increase
in interest expense incurred from these investments. Non-taxable
increases in the cash surrender value of corporate-owned life
insurance contracts also affected the relationship between
miscellaneous deductions and income taxes.
INTEREST CHARGES
The increase in long-term interest expense for the three- and
twelve-month periods reflect higher average levels of long-term debt
outstanding. The higher levels of debt resulted mainly from
additional financing by KLT to support expanding subsidiary operations
and new investments in unregulated ventures.
We use interest rate swap and cap agreements to limit the
interest expense on a portion of our variable-rate long-term debt. We
do not use derivative financial instruments for trading or other
speculative purposes. Although these agreements are an integral part
of our interest rate management, their incremental effect on interest
expense and cash flows is not significant.
WOLF CREEK
Wolf Creek is one of KCPL's principal generating units
representing about 18% of accredited generating capacity. The plant's
operating performance has remained strong, contributing about 25% of
annual mwh generation while operating at an average capacity of 88%
over the last three years. It has the lowest fuel cost per MMBTU of
any of KCPL's generating units.
Wolf Creek's eighth scheduled refueling and maintenance outage
began in early February 1996 and was completed in April 1996 (64
days). The incremental operating, maintenance and replacement power
costs are accrued evenly over the unit's operating cycle, normally 18
months. As actual outage expenses are incurred, the refueling
liability and related deferred tax asset are reduced. The eighth
outage started one month early when the plant was shut down after
water flow from the cooling lake was restricted by ice buildup on an
intake screen. This extended the length of the outage and was the
primary reason for the increase in Wolf Creek related replacement
power and maintenance expenses in 1996. Wolf Creek's ninth refueling
and maintenance outage is scheduled for the fall of 1997.
Currently, no major equipment replacements are expected, but an
extended shut-down of Wolf Creek could have a substantial adverse
effect on KCPL's business, financial condition and results of
operations. Higher replacement power and other costs would be
incurred as a result. Although not expected, an unscheduled plant
shut-down could be caused by actions of the Nuclear Regulatory
Commission reacting to safety concerns at the plant or other similar
nuclear units. If a long-term shut-down occurred, the state
regulatory commissions could consider reducing rates by excluding the
Wolf Creek investment from rate base.
Ownership and operation of a nuclear generating unit exposes KCPL
to risks regarding the cost of decommissioning the unit at the end of
its life and to potential retrospective assessments and property
losses in excess of insurance coverage.
CAPITAL REQUIREMENTS AND LIQUIDITY
See Note 3 to the Consolidated Financial Statements regarding
$150 million in financing obtained by KCPL in April 1997. Other
liquid resources of KCPL at March 31, 1997, included cash flows from
operations; $300 million of registered but unissued, unsecured medium-
term notes and $359 million of unused bank lines of credit. The
unused lines consisted of KCPL's short-term bank lines of credit of
$296 million and KLT's long-term revolving line of credit of $63
million.
KCPL continued to generate positive cash flows from operating
activities despite the significant decreases in net income for the
three- and twelve-month periods. Cash flow variances from changes in
working capital items vary with normal business cycles and operations
including the timing of receipts and payments. The timing of the Wolf
Creek outage affects the refueling outage accrual, deferred income
taxes and amortization of nuclear fuel.
The decrease in accrued taxes from December 31, 1996, to March
31, 1997, mainly reflects the decrease in taxable income during the
first three months of 1997. This decrease is partially offset by the
loss of accelerated depreciation on significant plant assets.
Accelerated depreciation lowers tax payments in the earlier years of
an asset's life while increasing deferred tax liabilities; this
relationship reverses in the later years of an asset's life. Our last
significant generating plant addition was the completion of Wolf Creek
in 1985. We expect property tax requirements to decrease about $3
million in 1997 based on changes in Kansas laws.
The $8.9 million incurred to repair damages from an October 1996
snow storm lowered cash flows from operating activities for the twelve-
month period. Amortization of these costs over five years began in
1997.
Cash used in investing activities varies with the timing of
utility capital expenditures and KLT's purchases of investments and
nonutility properties. KLT closed several investments during the
first three months of 1997, increasing Investments and Nonutility
Property on the Consolidated Balance Sheet by approximately $76
million. These include a 12% ownership interest in the largest fossil-
fuel generator in Argentina and an ownership interest in Digital
Teleport, Inc. (DTI). DTI is constructing a state of the art, fiber
optic network throughout the region in anticipation of increased local
and long distance telephone competition. As part of the DTI
transaction, KLT converted a $9 million note receivable to the
investment in DTI, lowering Other Receivables on the Consolidated
Balance Sheet. The increase in nonutility properties in the twelve-
month period resulted mainly from KLT's purchase of certain oil and
gas projects during 1996.
As discussed in Note 2 to the Consolidated Financial Statements,
the market value of KLT's investment in securities available for sale
decreased during the first three months of 1997. This decrease is
reflected in the Unrealized Gain on Securities Available for Sale in
the Consolidated Balance Sheet.
The $53 million payment to UtiliCorp and KLT's purchases of
investments and nonutility properties were financed mostly through
additional long-term and short-term borrowings. As discussed in Note
3 to the Consolidated Financial Statements, a majority of the short-
term borrowings during the first three months of 1997 were refinanced
with long-term obligations during April 1997.
KCPL's common dividend payout ratio was 153% for the current
twelve-month period and 80% for the prior twelve-month period. The
increase in the payout ratio is due mainly to the significant merger
related expenses in the current twelve-month period.
Day-to-day operations, utility construction requirements and
dividends are expected to be met with internally-generated funds.
Uncertainties affecting our ability to meet these requirements with
internally-generated funds include the effect of inflation on
operating expenses, the level of mwh sales, regulatory actions,
compliance with future environmental regulations, the availability of
generating units, and the outcome of pending legal proceedings (see
Note 4 to the Consolidated Financial Statements). The funds needed
for the retirement of $386 million of maturing debt through the year
2001 will be provided from operations, refinancings or short-term
debt. We might incur additional debt and/or issue additional equity
to finance growth or take advantage of new opportunities.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4-a Amended and Restated Declaration of Trust of KCPL
Financing I dated
April 15, 1997
4-b Indenture dated as of April 1, 1997 between the Company
and The First
National Bank of Chicago, Trustee
4-c First Supplemental Indenture dated as of April 1, 1997
to the Indenture
dated as of April 1, 1997 between the Company and The
First National
Bank of Chicago, Trustee
4-d Preferred Securities Guarantee Agreement dated April
15, 1997
27 Financial Data Schedule (for the three months ended
March 31, 1997)
(b) Reports on Form 8-K
A report on Form 8-K was filed with the Securities and
Exchange Commission
on February 11, 1997, with attached copy of the Agreement
and Plan of Merger dated
as of February 7, 1997, between the Company and Western
Resources, Inc.
A report on Form 8-K was filed with the Securities and
Exchange Commission
on April 3, 1997, with attached copies of the following: 1)
Statement re Computation
of Ratios of Earnings to Fixed Charges and Ratios of
Earnings to Fixed Changes
and Preferred Dividend Requirements; 2) Western Resources
Annual Report on
Form 10-K for the year ended December 31, 1996; 3) Western
Resources Current
Report on Form 8-K dated April 1, 1997; 4) Western Resources
Proxy Statement
dated March 27, 1996 for the 1996 Annual Meeting of
Shareholders held on
May 7, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
KANSAS CITY POWER & LIGHT COMPANY
Dated: May 9, 1997 /s/ Drue Jennings
(Drue Jennings)
(Chief Executive Officer)
Dated: May 9, 1997 /s/ Neil Roadman
(Neil Roadman)
(Principal Accounting Officer)
<PAGE>
-----------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
KCPL FINANCING I
Dated as of April 15, 1997
-----------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS............................................1
SECTION 1.1. DEFINITIONS.................................................1
ARTICLE II
TRUST INDENTURE ACT......................................................11
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION...........................11
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.............................11
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE............................12
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE.......................12
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.................................................12
SECTION 2.6. EVENTS OF DEFAULT; WAIVER..................................12
SECTION 2.7. EVENTS OF DEFAULT; NOTICE..................................14
ARTICLE III
ORGANIZATION.............................................................14
SECTION 3.1. NAME.......................................................14
SECTION 3.2. OFFICE.....................................................15
SECTION 3.3. PURPOSE....................................................15
SECTION 3.4. AUTHORITY..................................................15
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST.............................15
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES..................15
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND
THE TRUSTEES..............................................19
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE..................19
SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF
THE PROPERTY TRUSTEE......................................22
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE........................24
SECTION 3.11. DELAWARE TRUSTEE..........................................26
SECTION 3.12. EXECUTION OF DOCUMENTS....................................26
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF SECURITIES........................................26
SECTION 3.14. DURATION OF TRUST.........................................26
SECTION 3.15. MERGERS...................................................26
ARTICLE IV
SPONSOR..................................................................28
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES....................28
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR............................28
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<PAGE>
ARTICLE V
TRUSTEES.................................................................29
SECTION 5.1. NUMBER OF TRUSTEES.........................................29
SECTION 5.2. DELAWARE TRUSTEE...........................................30
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY..............................30
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY................................31
SECTION 5.5. INITIAL TRUSTEES...........................................31
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES..................................................31
SECTION 5.7. VACANCIES AMONG TRUSTEES...................................33
SECTION 5.8. EFFECT OF VACANCIES........................................33
SECTION 5.9. MEETINGS...................................................33
SECTION 5.10. DELEGATION OF POWER.......................................34
ARTICLE VI
DISTRIBUTIONS............................................................34
SECTION 6.1. DISTRIBUTIONS..............................................34
ARTICLE VIII
SSUANCE OF SECURITIES....................................................35
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES....................35
ARTICLE VIII
TERMINATION OF TRUST.....................................................36
SECTION 8.1. TERMINATION OF TRUST.......................................36
ARTICLE IX
TRANSFER OF INTERESTS....................................................37
SECTION 9.1. TRANSFER OF SECURITIES.....................................37
SECTION 9.2. TRANSFER OF CERTIFICATES...................................37
SECTION 9.3. DEEMED SECURITY HOLDERS....................................38
SECTION 9.4. BOOK ENTRY INTERESTS.......................................38
SECTION 9.5. NOTICES TO CLEARING AGENCY.................................39
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY...................39
SECTION 9.7. DEFINITIVE PREFERRED SECURITY
CERTIFICATES..............................................39
SECTION 9.8. MUTILATED, DESTROYED, LOST OR
STOLEN CERTIFICATES.......................................40
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS.....40
SECTION 10.1. LIABILITY.................................................40
SECTION 10.2. EXCULPATION...............................................41
SECTION 10.3. FIDUCIARY DUTY............................................41
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<PAGE>
SECTION 10.4. INDEMNIFICATION...........................................42
SECTION 10.5. OUTSIDE BUSINESSES........................................43
ARTICLE XI
ACCOUNTING...............................................................44
SECTION 11.1. FISCAL YEAR...............................................44
SECTION 11.2. CERTAIN ACCOUNTING MATTERS................................44
SECTION 11.3. BANKING...................................................44
SECTION 11.4. WITHHOLDING...............................................45
ARTICLE XII
AMENDMENTS AND MEETINGS..................................................45
SECTION 12.1. AMENDMENTS................................................45
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT............................47
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
TRUSTEE..................................................................49
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF
PROPERTY TRUSTEE........................................49
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF
DELAWARE TRUSTEE........................................50
ARTICLE XIV
SUCCESSOR CORPORATION....................................................50
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC..............................50
SECTION 14.2. SUCCESSOR CORPORATION SUBSTITUTED.........................51
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO
PROPERTY TRUSTEE........................................51
ARTICLE XV
MISCELLANEOUS............................................................51
SECTION 15.1. NOTICES...................................................51
SECTION 15.2. GOVERNING LAW.............................................52
SECTION 15.3. INTENTION OF THE PARTIES..................................53
SECTION 15.4. HEADINGS..................................................53
SECTION 15.5. SUCCESSORS AND ASSIGNS....................................53
SECTION 15.6. PARTIAL ENFORCEABILITY....................................53
SECTION 15.7. COUNTERPARTS..............................................53
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<PAGE>
CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.8
315(c) 3.9(a)
315(d) 3.9(a)
316(a) Exhibit A, 2.6
316(c) 3.6(e)
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
-iv-
<PAGE>
EXHIBIT A
TERMS OF SECURITIES
EXHIBIT B
PREFERRED SECURITIES GUARANTEE
EXHIBIT C
PURCHASE AGREEMENT
-v-
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
KCPL FINANCING I
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated
and effective as of April 15, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein), and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
W I T N E S S E T H:
WHEREAS, certain of the Trustees and the Sponsor have heretofore
established a trust (the "Trust") under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated December 10, 1996 (the
"Original Declaration") for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Subordinated Debentures of
the Subordinated Debenture Issuer;
WHEREAS, all the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms used in this Declaration
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1. A term defined anywhere in this Declaration has the
same meaning throughout. A term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires.
<PAGE>
AFFILIATE:
The term "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
AUTHORIZED OFFICER:
The term "Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
BOOK ENTRY INTEREST:
The term "Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
BUSINESS DAY:
The term "Business Day" means any day other than a day on which
banking institutions in Chicago, Illinois or New York, New York are authorized
or required by law to close.
BUSINESS TRUST ACT:
The term "Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 ET SEQ., as it may be amended from time
to time.
CERTIFICATE:
The term "Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
CLEARING AGENCY:
The term "Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depository for the Preferred Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
<PAGE>
CLEARING AGENCY PARTICIPANT:
The term "Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom, from time to time, the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
CLOSING DATE:
The term "Closing Date" means April 15, 1997.
CODE:
The term "Code" means the Internal Revenue Code of 1986.
COMMON SECURITY:
The term "Common Security" has the meaning specified in Section 7.1.
COMMON SECURITY CERTIFICATE:
The term "Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Annex II to Exhibit A.
COVERED PERSON:
The term "Covered Person" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
DEBENTURE ISSUER:
The term "Debenture Issuer" means KCPL, in its capacity as the issuer
of the Subordinated Debentures.
DEBENTURE TRUSTEE:
The term "Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Indenture, until a successor
3
<PAGE>
is appointed thereunder and thereafter means such successor trustee.
DELAWARE TRUSTEE:
The term "Delaware Trustee" has the meaning set forth in Section 5.2.
DEFINITIVE PREFERRED SECURITY CERTIFICATES:
The term "Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
DIRECTION:
The term "Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
DISTRIBUTION:
The term "Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
DTC:
The term "DTC" means The Depository Trust Company, the initial
Clearing Agency.
EVENT OF DEFAULT:
The term "Event of Default" in respect of the Securities means an
Indenture Default has occurred and is continuing in respect of the Subordinated
Debentures.
EXCHANGE ACT:
The term "Exchange Act" means the Securities Exchange Act of 1934.
4
<PAGE>
GLOBAL CERTIFICATE:
The term "Global Certificate" has the meaning set forth in Section
9.4.
HOLDER:
The term "Holder" means the Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act; provided, however, that in
determining whether Holders of the requisite liquidation amount of Preferred
Securities have voted on any matter provided for in this Declaration, then for
the purpose of such determination only (and not for any other purpose
hereunder), if the Preferred Securities remain in the form of one or more Global
Certificates, the term "Holder" shall mean the holder of the Global Certificate
acting at the direction of the Preferred Security Beneficial Owners.
INDEMNIFIED PERSON:
The term "Indemnified Person" means any Trustee, any Affiliate of any
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the Trust
or its Affiliates.
INDENTURE:
The term "Indenture" means the Indenture dated as of April 1, 1997
between the Debenture Issuer and the Debenture Trustee, and any amendment
thereto and any indenture supplemental thereto pursuant to which the
Subordinated Debentures are to be issued.
INDENTURE DEFAULT:
The term "Indenture Default" means an "Event of Default" as such term
is defined in the Indenture.
INVESTMENT COMPANY:
The term "Investment Company" means an investment company as defined
in the Investment Company Act.
INVESTMENT COMPANY ACT:
The term "Investment Company Act" means the Investment Company Act of
1940.
5
<PAGE>
KCPL:
The term "KCPL" means Kansas City Power & Light Company, a Missouri
corporation, or any successor entity in a merger or consolidation.
LEGAL ACTION:
The term "Legal Action" has the meaning set forth in Section 3.6(g).
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Preferred
Securities or outstanding Common Securities voting separately as a class,
representing more than 50% of the aggregate stated liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of such class.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each such officer signing the Certificate
has read the covenant or condition and the definition(s) relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each such officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
6
<PAGE>
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
PAYING AGENT:
The term "Paying Agent" has the meaning specified in Section 3.8(i).
PERSON:
The term "Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint stock company, unincorporated
association or government or any agency or political subdivision thereof, or any
other entity of whatever nature.
PREFERRED SECURITIES GUARANTEE:
The term "Preferred Securities Guarantee" means the Preferred
Securities Guarantee Agreement to be dated as of April 15, 1997 of the Sponsor
in respect of the Preferred Securities in the form of Exhibit B.
PREFERRED SECURITY:
The term "Preferred Security" has the meaning specified in Section
7.1.
PREFERRED SECURITY BENEFICIAL OWNER:
The term "Preferred Security Beneficial Owner" means, with respect to
a Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
PREFERRED SECURITY CERTIFICATE:
The term "Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Annex I to
Exhibit A.
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PROPERTY TRUSTEE:
The term "Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
PROPERTY TRUSTEE ACCOUNT:
The term "Property Trustee Account" has the meaning set forth in
Section 3.8(c)(i).
QUORUM:
The term "Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
REGULAR TRUSTEE:
The term "Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
RELATED PARTY:
The term "Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
which owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the Property
Trustee, means the chairman of the board of directors, the President, any Vice
President, the Secretary, the Treasurer, any trust officer or, any corporate
trust officer or any other officer or assistant officer of the Property Trustee
customarily performing functions similar to those performed by any of the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
RULE 3a-5:
The term "Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
SECURITIES:
The term "Securities" mean the Common Securities and the Preferred
Securities.
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SECURITIES ACT:
The term "Securities Act" means the Securities Act of 1933, as
amended.
66-2/3% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "66-2/3% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Preferred
Securities or outstanding Common Securities, voting separately as a class,
representing 66-2/3% of the aggregate stated liquidation amount (including the
stated amount that would be paid on redemption, liquidation or maturity, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of such class.
SPONSOR:
The term "Sponsor" means KCPL, in its capacity as sponsor of the
Trust, and its successor or successors by merger, consolidation or purchase of
all or substantially all of its assets.
SUBORDINATED DEBENTURES:
The term "Subordinated Debentures" means the series of Subordinated
Debentures to be issued by the Debenture Issuer under the Indenture to the
Property Trustee for the benefit of the Trust and the Holders.
SUCCESSOR PROPERTY TRUSTEE:
The term "Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under Section 5.3(a).
10% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "10% in liquidation amount of the Securities" means, except
as provided in the terms of the Preferred Securities or the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred Securities or
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate stated liquidation amount (including the stated amount
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that would be paid on redemption, liquidation or maturity, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of such class.
TAX EVENT:
The term "Tax Event" means a "Tax Event" as defined in the Indenture.
TREASURY REGULATIONS:
The term "Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury Department, as amended.
TRUSTEE OR TRUSTEES:
The terms "Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939.
UNDERWRITING AGREEMENT:
The term "Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
SECTION 1.2. INTERPRETATION. Each definition in this Declaration
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Declaration as a
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whole. The headings to the Articles and Sections are for convenience of
reference and shall not affect the meaning or interpretation of this
Declaration. References to Articles, Sections, Annexes and Schedules mean the
Articles, Sections, Annexes and Schedules of this Declaration. The Annexes, if
any, and Schedules are hereby incorporated by reference into and shall be deemed
a part of this Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION. (a) This Declaration
is subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act. If and to the extent that any
provision of this Declaration limits, qualifies or conflicts with the duties
imposed by sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
(c) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES. (a) Each of the Sponsor
and the Regular Trustee(s) on behalf of the Trust shall provide the Property
Trustee (i) within fourteen (14) days after each record date for payment of
Distributions a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, PROVIDED that none of the Sponsor or the
Regular Trustees on behalf of the Trust shall be obligated to provide such List
of Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other time, within thirty (30)
days of receipt by the Trust of a written request for a List of Holders as of a
date no more than fourteen (14) days before such List of Holders is given to the
Property Trustee. The Property Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in its capacity as Paying Agent (if acting in such
capacity) PROVIDED that the Property Trustee may destroy any List
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of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE. Within 60 days after
May 15 of each year, the Property Trustee shall provide to the Holders of the
Preferred Securities such reports, if any, as are required by Section 313 of the
Trust Indenture Act, in the form and in the manner and to the Person or Persons
provided by section 313 of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by section
314 (if any) and the compliance certificate as required by section 314 of the
Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with the conditions precedent,
if any, provided for in this Declaration which relate to any of the matters set
forth in section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER. (a) The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on behalf
of the Holders of all of the Preferred Securities, waive any past Event of
Default in respect of the Preferred Securities and its consequences, PROVIDED
that if the Event of Default:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Debentures (a
"Super-Majority") to be waived under the Indenture, the Event of Default
under this Declaration may only be waived by the vote of the Holders of at
least the proportion in liquidation amount of the Preferred Securities that
the relevant Super Majority represents to the
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aggregate principal amount of the Subordinated Debentures outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon. Any waiver by the Holders of the Preferred
Securities of an Event of Default with respect to the Preferred Securities shall
also be deemed to constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities for all purposes
of this Declaration without any further act, vote, or consent of the Holders of
the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default in respect of the Common Securities
and its consequences, PROVIDED that if the Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
this Declaration as provided below, the Event of Default under this
Declaration is not waivable; or
(ii) requires the consent or vote of all of the holders of the
Subordinated Debentures to be waived, the Event of Default under this
Declaration may only be waived by the vote of all of the Holders of the
Preferred Securities, PROVIDED that each Holder of Common Securities will
be deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated and until such Events of Default have
been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the Holders of the Preferred
Securities and only the Holders of the Preferred Securities will have the
right to direct the Property Trustee in accordance with the terms of the
Securities. Subject to the foregoing proviso, upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or
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Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE. (a) The Property Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Securities, notices of
all defaults with respect to the Securities known to the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults", for the purposes of this Section 2.7(a), is hereby defined as an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); PROVIDED that, except for a default in the payment of the principal of
(or the premium, if any) or the interest on any of the Subordinated Debentures
or in the payment of any sinking fund installment established for the
Subordinated Debentures, the Property Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers, of the Property
Trustee in good faith determine that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default arising under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property Trustee
charged with the administration of this Declaration shall have obtained
written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1. NAME. The Trust is named "KCPL Financing I", as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
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SECTION 3.2. OFFICE. The address of the principal office of the
Trust is 1201 Walnut, Kansas City, Missouri 64106-2124. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3. PURPOSE. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such sale
to acquire the Subordinated Debentures and (b) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4. AUTHORITY. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust, and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with a Trustee or the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of such Trustee or Trustees to bind the Trust. Persons dealing with
the Trust are entitled to rely conclusively on the power and authority of a
Trustee or the Trustees as set forth in this Declaration.
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST. Except as provided in
Section 3.8 with respect to the Subordinated Debentures and the Property Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title of any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES. The Regular
Trustees shall have the exclusive power and authority and duty to cause the
Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of
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Common Securities, and, PROVIDED FURTHER, there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange Commission
(the "Commission") the registration statement on Form S-3 prepared by
the Sponsor in relation to the Preferred Securities, including any
amendments thereto prepared by the Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in order to
qualify or register all or part of the Preferred Securities in any
state in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange, Inc. or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto prepared by the
Sponsor; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Subordinated Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; PROVIDED,
HOWEVER, that the Regular Trustees shall cause legal title to the
Subordinated Debentures to be held of record in the name of the Property
Trustee for the benefit of the Trust and the Holders of the Preferred
Securities and the Holders of the Common Securities;
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(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event, PROVIDED that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking any
Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including for
the purposes of section 316(c) of the Trust Indenture Act and with respect
to Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and the Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, transfer agent
for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election (i) to defer
payments of interest on the Subordinated Debentures by extending the
interest payment period under the Indenture or (ii) to shorten the
scheduled maturity date on the Subordinated Debentures;
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(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be characterized for United States
federal income tax purposes as a grantor trust and causing each Holder
of Securities to be treated as owning an undivided beneficial interest
in the Subordinated Debentures; and
(iii) co-operating with the Debenture Issuer to ensure that the
Subordinated Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax purposes,
PROVIDED that such action does not adversely affect the interests of the
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner which is consistent with the purposes and functions of the Trust set out
in Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
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Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not, and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) consent to the modification of the Subordinated Debentures or
any other asset of the Trust, unless the Trust shall have received an
opinion of counsel to the effect that such modification will not cause more
than an insubstantial risk that for United States federal income tax
purposes the Trust will not be characterized as a grantor trust.
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE. (a) The
legal title to the Subordinated Debentures shall be owned by and held of record
in the name of the Property Trustee in trust for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Debentures shall vest automatically in each Person
who may hereafter be appointed as Property Trustee as set forth in Section 5.6.
Such vesting and cessation of title shall be
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effective whether or not conveyancing documents with respect to the Subordinated
Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Debentures to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and the Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account which is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Debentures are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated Debentures to
Holders of Securities upon the liquidation and dissolution of the Trust.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall hold the Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
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(f) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration (including the Preferred Securities
Guarantee) or the Trust Indenture Act.
(g) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Section 5.6.
(h) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of the Holders of the Securities,
enforce its rights under the Indenture with respect to the Subordinated
Debentures and its rights under the Preferred Securities Guarantee in accordance
with the terms of the Preferred Securities Guarantee, subject to the rights of
the Holders pursuant to the terms of such Securities and the Preferred
Securities Guarantee.
(i) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and the
Common Securities and any such Paying Agent shall comply with section 317(b) of
the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the powers or the authority of the Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes and functions of
the Trust set forth in Section 3.3 and the Property Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
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SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE. (a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the terms of the Securities, and no implied covenants
shall be read into this Declaration against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and in
the terms of the Securities, and the Property Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the
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Property Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or adequate indemnity
against such risk is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Subordinated Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Subordinated Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the Sponsor.
Money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Property Trustee Account maintained by
the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration,
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nor shall the Property Trustee be liable for the default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. (a) Subject to
the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties.
(ii) Any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(iii) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part and, if the Trust is excluded from the
definition of an Investment Company solely by means of Rule 3a-5, subject
to the requirements of Rule 3a-5, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees.
(iv) The Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any rerecording, refiling or
reregistration thereof).
(v) The Property Trustee may consult with counsel and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Sponsor or any of its Affiliates and may include any of its employees. The
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction.
(vi) The Property Trustee shall be under no obligation to exercise any
rights or powers vested in it under this Declaration at the request or
direction of any Holder, unless
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such Holder shall have provided to the Property Trustee reasonable security
or indemnity against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee, PROVIDED that nothing contained in this
Section 3.10(a)(vi) shall, however, relieve the Property Trustee, upon the
occurrence of an Event of Default, from exercising the rights and powers
vested in it by this Declaration.
(vii) The Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, bond, security or other papers or documents, but the Property
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities representing the aggregate liquidation amount of all outstanding
Securities of such class required under the terms of the Securities to
direct the Property Trustee to enforce such remedy or right or take such
action, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (iii) shall be
protected in acting in accordance with such instructions.
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(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. DELAWARE TRUSTEE. Notwithstanding any other provision
of this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Trustees described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
SECTION 3.12. EXECUTION OF DOCUMENTS. Unless otherwise determined by
the Regular Trustees, a majority of, or if there are only two, both of the
Regular Trustees are authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to execute pursuant to
Section 3.6, PROVIDED that any listing application prepared by the Sponsor
referred to in Section 3.6(b)(iii) may be executed by any Regular Trustee.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14. DURATION OF TRUST. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall have existence for
forty-five (45) years from the Closing Date.
SECTION 3.15. MERGERS. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Section 3.15(b) and (c).
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(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Property Trustee, the Delaware Trustee or the Holders of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by a
trust organized as such under the laws of any State; PROVIDED that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust with
respect to the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities and Common
Securities, respectively (the "Successor Securities"), so long as the
Successor Securities rank the same as the Preferred Securities and
Common Securities rank with respect to Distributions and payments upon
liquidation, redemption, maturity and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties as the Property
Trustee as the Holder of the Subordinated Debentures;
(iii) the Preferred Securities or any Successor Securities thereof are
listed, or any such Successor Securities will be listed upon notification
of issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities thereof)
to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or replacement,
the Sponsor has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities of the Preferred Securities at least
to the extent provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity for United States federal income tax purposes to be classified
as other than a grantor trust and each Holder of the Securities not to be
treated as owning an undivided beneficial interest in the Subordinated
Debentures, except with the consent of Holders of 100% in liquidation amount of
the Securities.
ARTICLE IV
SPONSOR
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount equal to approximately 3% of the capital of the Trust at the
same time as the Preferred Securities are sold.
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
take any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such states;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange, Inc. or any other national stock exchange or the Nasdaq
Stock Market's National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. NUMBER OF TRUSTEES. The number of Trustees shall
initially be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities;
PROVIDED that in any case, the number of Trustees shall be at least four (4)
unless the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee pursuant to Section 5.2, in which case the number of Trustees shall be
at least three (3).
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SECTION 5.2. DELAWARE TRUSTEE. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware and otherwise meets the requirements
of applicable law,
PROVIDED that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY. (a) There shall at all
times be one Trustee which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority (if such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published).
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set out in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if they were the
obligor referred to in
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Section 310(b) of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY. Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least twenty-one (21) years of age or a legal entity which shall act through
one or more Authorized Officers.
SECTION 5.5. INITIAL TRUSTEES. The initial Regular Trustees shall
be:
John J. DeStefano
1201 Walnut
Kansas City, Missouri 64106-2124
Andrea F. Bielsker
1201 Walnut
Kansas City, Missouri 64106-2124
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60603
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. (a)
Subject to Section 5.6(b), Trustees may be appointed or removed without cause at
any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities, voting as a class
at a meeting of the Holders of the Common Securities.
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(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until the
successor of such Trustee shall have been appointed or until the death, removal
or resignation of such Trustee. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
PROVIDED, HOWEVER, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust and the Sponsor; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust and the Sponsor.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee
as the case may be if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
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(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7. VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
a majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with Section 5.6.
SECTION 5.8. EFFECT OF VACANCIES. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9. MEETINGS. Meetings of the Regular Trustees shall be
held from time to time upon the call of any Regular Trustee. Regular meetings
of the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meetings of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that
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the meeting has not been lawfully called or convened. Unless provided otherwise
in this Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present (whether in person
or by telephone) and eligible to vote with respect to such matter, PROVIDED that
a Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees. In the event there is only one Regular Trustee, any
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
SECTION 5.10. DELEGATION OF POWER. (a) Any Regular Trustee may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission or making any other governmental
filing.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and principal on the
Subordinated Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a Distribution of
the Payment Amount to the Holders.
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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 preferred
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit A and incorporated herein by
reference (the "Preferred Securities"), and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Exhibit A and incorporated herein by reference
(the "Common Securities"). The Trust shall have no securities or other
interests in the assets of the Trust other than the Preferred Securities and the
Common Securities.
(b) The Securities shall be signed on behalf of the Trust by the
Regular Trustees (or, if there are more than two Regular Trustees, by any two of
the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Security. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Security so signed shall be delivered by the Trust,
such Security nevertheless may be delivered as though the person who signed such
Security had not ceased to be such Regular Trustee; and any Security may be
signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Security, are the Regular Trustees of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.1(b) with respect to the Common
Securities.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. TERMINATION OF TRUST. (a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor, the
filing of a certificate of cancellation with respect to the Trust or the
revocation of the charter of the Holder of the Common Securities or of the
Sponsor and the expiration of ninety (90) days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the dissolution of the Trust in accordance with the terms of
the Securities and pursuant to which all of the Subordinated Debentures
shall have been distributed to the Holders of Securities in exchange for
all of the Securities; or
(vi) upon delivery of written direction to the Property Trustee by the
Sponsor at any time (which direction is wholly optional and within the
discretion of the Sponsor) to dissolve the Trust and distribute the
Subordinated Debentures to the Holders of the Securities in accordance with
Section 3 of EXHIBIT A hereto.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Article X shall survive the termination of the
Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. TRANSFER OF SECURITIES. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor, PROVIDED that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust and each Holder of Securities would
not be treated as owning an undivided beneficial interest in the
Subordinated Debentures; and
(ii) the Trust would be an Investment Company or the transferee would
be an Investment Company if the transferee was not an Investment Company
before the transfer.
SECTION 9.2. TRANSFER OF CERTIFICATES. The Regular Trustees shall
provide for the registration of Certificates and of transfers of Certificates,
which will be effected without charge but only upon payment (with such indemnity
as the Regular Trustees may require) in respect of any tax or other government
charges which may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be
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bound by this Declaration and the documents incorporated by reference herein.
SECTION 9.3. DEEMED SECURITY HOLDERS. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trustees shall have actual or other notice
thereof.
SECTION 9.4. BOOK ENTRY INTERESTS. Unless otherwise specified in the
terms of the Preferred Securities, the Preferred Securities Certificates, on
original issuance, will be issued in the form of one or more, fully registered,
global Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements
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between such Preferred Security Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
SECTION 9.5. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the Preferred Security Holders to the Clearing
Agency, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
SECTION 9.7. DEFINITIVE PREFERRED SECURITY CERTIFICATES. If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within ninety (90) days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect, after consultation with the Sponsor,
to terminate the book entry system through the Clearing Agency with respect
to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable
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for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such
instructions. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Preferred Securities may
be listed, or to conform to usage.
SECTION 9.8. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. LIABILITY. (a) Except as expressly set forth in this
Declaration, the Subordinated Debentures, the
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Preferred Securities Guarantee and the terms of the Securities, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
SECTION 10.2. EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, pursuant to Section 3.9,
negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. FIDUCIARY DUTY. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
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extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or terms so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of, or factors
affecting, the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. INDEMNIFICATION. (a) To the fullest extent permitted
by applicable law, the Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim incurred by such
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Indemnified Person by reason of the creation, operation or termination of
the Trust or any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, pursuant to Section 3.9, negligence) or willful misconduct
with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The rights to indemnification set forth herein shall survive the
termination of this Declaration.
SECTION 10.5. OUTSIDE BUSINESSES. Any Covered Person, the Sponsor,
the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depository for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1. FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2. CERTAIN ACCOUNTING MATTERS. (a) At all times during
the existence of the Trust, the Regular Trustees shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined
by and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an annual United States federal
income tax information statement, if one is required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within thirty (30) days
after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3. BANKING. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; PROVIDED, HOWEVER,
that all payments of funds in respect of
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the Subordinated Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; PROVIDED, HOWEVER, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4. WITHHOLDING. The Trust and the Trustees shall comply
with all withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular
Trustee(s) shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder. In the event of any claimed over-withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. AMENDMENTS. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
be amended by, and only by, a written instrument approved and executed by the
Regular Trustees (or, if there are more than two Regular Trustees, a majority of
the Regular Trustees); PROVIDED, HOWEVER, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(1) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of
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this Declaration (including the terms of the Securities);
(2) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(ii) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result thereof would be to
(A) cause the Trust not to be characterized for purposes of
United States federal income taxation as a grantor trust and each
Holder of Securities not to be treated as owning an undivided
beneficial interest in the Subordinated Debentures, as evidenced by an
Opinion of Counsel to the effect that such amendment shall not result
in the foregoing;
(B) affect adversely the rights, powers, duties, obligations or
immunities of the Property Trustee or the Delaware Trustee; or
(C) cause the Trust to be deemed to be an Investment Company
which is required to be registered under the Investment Company Act;
(iii) at such time after the Trust has issued any Securities which
remain outstanding, any amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(iv) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
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(v) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
(vi) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove, Trustees
shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities.
(b) Notwithstanding Section 12.1(a)(iii), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of such class of Holders, if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Security Certificates held by the Holders of Securities exercising the right
to call a meeting and only those specified shall be counted for purposes of
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determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven (7) days and not
more than sixty (60) days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on which
the Preferred Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of Securities.
Any action that may be taken at a meeting of the Holders of Securities may
be taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballots submitted to the
Holders of Securities for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which such Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of eleven (11) months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Holder of
Securities executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate.
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(iv) Unless the Business Trust Act, this Declaration, the Trust
Indenture Act, the terms of the Securities or the listing rules of any
stock exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a national banking association duly
organized under the laws of the United States of America, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee, and it constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or
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constitute a breach of the Articles of Organization or By-Laws of the
Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Delaware Trustee represents and warrants to the Trust and the Sponsor at the
date of this Declaration, that the Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and this Declaration.
This Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
ARTICLE XIV
SUCCESSOR CORPORATION
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC. Nothing contained in
this Declaration or in any of the Securities shall prevent any consolidation or
merger of the Sponsor with or into any other corporation or corporations
(whether or not affiliated with the Sponsor), or successive consolidations or
mergers in which the Sponsor or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of
the property of the Sponsor or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Sponsor or its successor or successors) authorized to
acquire and operate the same; PROVIDED, HOWEVER, the Sponsor hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment, performance and observance
of all the covenants and conditions of this Declaration to be paid, performed or
observed by the Sponsor, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Property Trustee executed and delivered to
the Property Trustee by the entity formed by such consolidation, or into which
the Sponsor shall have been merged, or by the entity which shall have acquired
such property.
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SECTION 14.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Property
Trustee and satisfactory in form to the Property Trustee, of the due and
punctual payment, performance and observance of all of the covenants and
conditions of this Declaration to be paid, performed or observed by the Sponsor,
such successor corporation shall succeed to and be substituted for the Sponsor
with the same effect as if it had been named as the Sponsor herein.
(b) Nothing contained in this Declaration or in any of the Securities
shall prevent the Sponsor from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Sponsor).
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO PROPERTY TRUSTEE.
The Property Trustee, subject to the provisions of Section 3.9, may receive an
opinion of counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. NOTICES. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
KCPL FINANCING I
c/o Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Treasurer
Facsimile: 816-556-2992
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(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0216
Chicago, Illinois 60670-0216
Attention: Corporate Trust Administration
Facsimile: 312-407-4656
(c) if given to the Delaware Trustee, at the mailing address of the
Property Trustee with a copy to the address set forth below (or such other
address as the Delaware Trustee may give notice of to the Holders of the
Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Facsimile: 815-356-0391
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder
of the Common Securities may give notice of to the Trust):
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Treasurer
Facsimile: 816-556-2992
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.2. GOVERNING LAW. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
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SECTION 15.3. INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust not be characterized for United States federal
income tax purposes as an association taxable as a corporation or a partnership
but rather, that the Trust be characterized as a grantor trust or otherwise in a
manner such that each Holder of Securities be treated as owning an undivided
beneficial interest in the Subordinated Debentures. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
SECTION 15.4. HEADINGS. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 15.5. SUCCESSORS AND ASSIGNS. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 15.6. PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 15.7. COUNTERPARTS. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
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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.
/s/ John J. DeStefano
John J. DeStefano
as Trustee
s/s Andrea F. Bielsker
Andrea F. Bielsker
as Trustee
THE FIRST NATIONAL BANK OF CHICAGO
Not in its individual capacity but solely as Property
Trustee
By: s/s John J. Prendiville
Name:John J. Prendiville
Title: Vice President
FIRST CHICAGO DELAWARE INC.
Not in its individual capacity
but solely as Delaware Trustee
By: /s/ John J. Prendiville
Name: John J. Prendiville
Title: Vice President
KANSAS CITY POWER & LIGHT COMPANY
as Sponsor
By: /s/ B. J. Beaudoin
Name: Bernard J. Beaudoin
Title: Executive Vice President -
Chief Executive Officer
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EXHIBIT A
TERMS OF
8.3% TRUST ORIGINATED PREFERRED SECURITIES
8.3% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust of KCPL Financing I dated as of April 15, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of one
hundred fifty million dollars ($150,000,000) and a liquidation amount with
respect to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "8.3% Trust Originated
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
(b) COMMON SECURITIES. Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of four
million six hundred fourty thousand dollars ($4,640,000) and a liquidation
amount with respect to the assets of the Trust of $25 per Common Security, are
hereby designated for the purposes of identification only as "8.3% Trust
Originated Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex II, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
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2. DISTRIBUTIONS. (a) Distributions payable on each Security will
be fixed at a rate per annum of 8.3% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the rate of interest
payable on the Subordinated Debentures to be held by the Property Trustee.
Distributions in arrears will bear interest compounded quarterly at the Coupon
Rate to the extent permitted by applicable law. The term "Distributions," as
used herein, includes any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Subordinated Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period, on the basis
of the actual number of days elapsed in such a 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from April 15, 1997 and will be payable quarterly in arrears, on March 31, June
30, September 30, and December 31 of each year, commencing on June 30, 1997,
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Subordinated Debentures for a period not
exceeding twenty consecutive quarters (each such period, an "Extension Period")
and, as a consequence of such extension, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the Coupon Rate,
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED that such Extension Period, together with all such
previous and further extensions thereof, may not exceed twenty consecutive
quarters or extend beyond the maturity of the Subordinated Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Subordinated
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Debentures. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company" in the
Prospectus dated April 3, 1997, as supplemented by the Prospectus Supplement
dated April 9, 1997 (the "Prospectus") of the Trust included in the Registration
Statement on Form S-3 of the Sponsor and the Trust. The relevant record dates
for the Common Securities, and if the Preferred Securities shall not continue to
remain in book-entry-only form, the relevant record dates for the Preferred
Securities, shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates which payment dates correspond to the interest
payment dates on the Subordinated Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment under the
Subordinated Debentures, will cease to be payable to the Person in whose name
such Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Securities on the date of the dissolution, winding-up or
termination, as the case may be, will be entitled to receive out of the assets
of the Trust available for distribution to Holders of Securities, after paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act, an amount equal to
the aggregate of the stated liquidation amount of $25 per Security plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation
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Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION. (a) Upon the repayment of the Subordinated
Debentures in whole or in part, whether at maturity or upon acceleration,
redemption or otherwise, the proceeds from such repayment or payment shall be
simultaneously applied to redeem Securities having an aggregate stated
liquidation amount equal to the aggregate principal amount of the Subordinated
Debentures so repaid or redeemed at a redemption price of $25 per Security plus
an amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption except in the case
of payments upon maturity.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur and
be continuing, the Regular Trustees, upon not less than 30 nor more than 60 days
notice, may redeem the Securities in whole or in part for cash within 90 days
following the occurrence of such Tax Event (the "90 Day Period") at the
Redemption Price on a Pro Rata basis PROVIDED, that, if at the time there is
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Tax Event by taking some ministerial action ("Ministerial Action"), such as
filing a form or making an election, or pursuing some other similar reasonable
measure that has no adverse effect on the Sponsor, the Trust, the Debenture
Issuer or the Holders of the Securities, the Trust will pursue such Ministerial
Action in lieu of redemption.
"TAX EVENT" means that the Regular Trustees shall have received an
opinion from independent tax counsel experienced in
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such matters (a "Redemption Tax Opinion") to the effect that, on or after the
latest date of the Prospectus, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the latest date of the Prospectus, there is more than an insubstantial
risk that interest payable by the Debenture Issuer to the Trust on the
Subordinated Debentures is not, or within 90 days of the date thereof will not
be, deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
5. DISTRIBUTION OF SUBORDINATED DEBENTURES IN EXCHANGE FOR
SECURITIES. (a) On and from the date fixed by the Trustees for any distribution
of Subordinated Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depositary") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Debentures to be delivered upon such distribution and any certificates
representing Securities, except for certificates representing Preferred
Securities held by the Depository or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
(b) If the Subordinated Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Subordinated Debentures listed on the New York
Stock Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Subordinated Debentures.
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6. REDEMPTION OR DISTRIBUTION PROCEDURES. (a) Notice of any
redemption of, or notice of distribution of Subordinated Debentures in exchange
for, the Securities (a "Redemption/Distribution Notice") will be given by the
Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date fixed for
redemption of the Subordinated Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 6(a), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Preferred Securities; PROVIDED that if, as a result of such Pro
Rata redemption, Clearing Agency Participants would hold fractional interests in
the Preferred Securities, the Depositary will adjust the amount of the interest
of each Clearing Agency Participant to be redeemed to avoid such fractional
interests.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Debentures are redeemed as set out in this Section 4 (which notice
will be irrevocable), then (i) while the Preferred Securities are in book entry
only form, with respect to the Preferred Securities, by 12:00 noon, New York
City time, on the redemption date, PROVIDED that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debentures, the Property Trustee will
deposit irrevocably with the Depositary or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities, and (ii) if the Preferred Securities are
issued in definitive form, with respect to the Preferred Securities, and with
respect to the Common Securities, PROVIDED that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the related
redemption
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or maturity of the Subordinated Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds have been deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or on
the redemption date, as applicable, all rights of Holders of such Securities so
called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities which have
been so called for redemption. If any date fixed for redemption of Securities
is not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption
Price in respect of Securities is improperly withheld or refused and not paid
either by the Property Trustee or by the Sponsor as Guarantor pursuant to the
Preferred Securities Guarantee, Distributions on such Securities will continue
to accrue, from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(d) Redemption/Distribution Notices shall be sent to (i) in respect
of the Preferred Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if Global Certificates have been issued or if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof, and (ii) in respect of the Common Securities, to the Holders thereof.
(e) Subject to applicable law (including, without limitation, United
States federal securities laws), the Sponsor or any of its Affiliates may at any
time and from time to time purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
7. VOTING RIGHTS - PREFERRED SECURITIES. (a) Except as provided
under Sections 7(b) and 9 and as otherwise required by law and the Declaration,
the Holders of the Preferred Securities will have no voting rights.
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(b) The Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to the
Subordinated Debentures, (ii) waive any past default and its consequences that
are waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Debentures shall be due
and payable, or (iv) consent to any amendment, modification or termination of
the Indenture or the Subordinated Debentures, where such consent shall be
required, PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of greater than a majority of the Holders in principal
amount of Subordinated Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent at the direction of the Holders of
at least the proportion in liquidation amount of the Preferred Securities which
the relevant Super Majority represents of the aggregate principal amount of the
Subordinated Debentures. The Property Trustee shall not take any action in
accordance with the directions of the Holders of the Preferred Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, for the purposes of United States
federal income tax, the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of Securities will continue
to be treated as owning an undivided beneficial interest in the Subordinated
Debentures on account of such action. If the Property Trustee fails to enforce
its rights under the Declaration, any Holder of Preferred Securities may
institute a legal proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
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or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Debentures in accordance with the Declaration and
the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor, or by any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
8. VOTING RIGHTS - COMMON SECURITIES. (a) Except as provided under
Section 8(b) and (c) and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Only after the Event of Default with respect to the Preferred
Securities has been cured, waived or otherwise eliminated, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or power conferred on
the Debenture Trustee with respect to the Subordinated Debentures, (ii) waive
any past default and its consequences that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, PROVIDED,
HOWEVER, that where a consent under the Indenture would require the consent of a
Super Majority, the Property Trustee may only give such consent at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the
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relevant Super Majority represents of the aggregate principal amount of the
Subordinated Debentures. The Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, for the purposes of United States
federal income tax, the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of Securities will continue
to be treated as owning an undivided beneficial interest in the Subordinated
Debentures on account of such action. If the Property Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Debentures in accordance with the Declaration and the terms of
the Securities.
9. AMENDMENTS. If any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities,
as a single class, will be entitled to vote on such amendment or proposal (but
not on any other amendment or proposal) and such amendment or proposal shall not
be effective except with the approval of the Holders of at least 66-2/3 in
liquidation amount of the Securities affected thereby, provided that a
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reduction of the aggregate liquidation amount or the distribution rate, or a
change in the payment dates or maturities of the Preferred Securities shall not
be permitted without the consent of each holder of the Preferred Securities. In
the event any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of 66-2/3 in liquidation amount of such class of Securities.
10. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Indenture has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
11. RANKING. The Preferred Securities rank PARI PASSU and payment
thereon shall be made Pro Rata with the Common Securities except that when an
Event of Default occurs and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
12. LISTING. The Regular Trustees shall use their best efforts to
cause the Preferred Securities to be listed for quotation on the New York Stock
Exchange, Inc.
13. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions therein and to the
provisions of the Indenture.
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14. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have
no preemptive rights to subscribe for any additional Securities.
15. MISCELLANEOUS. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred
Securities Guarantee to a Holder without charge on written request to the
Sponsor at its principal place of business.
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ANNEX I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security as a whole (except by the Depositary to a nominee of the Depositary or
by a nominee of the Depositary to the Depositary or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as is requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. 482432 20 0
Certificate Evidencing Preferred Securities
of
KCPL FINANCING I
Preferred Securities
(Liquidation Amount $25 per Preferred Security)
KCPL FINANCING I, a business trust formed under the laws of the State
of Delaware (the "TRUST"), hereby certifies that ________ (the "Holder") is the
registered owner of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.3% Trust
Originated Preferred Securities (liquidation amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities
I-1
<PAGE>
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of April 15, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Exhibit A to the Declaration. Capitalized terms used
herein but not defined herein shall have the respective meanings given them in
the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Trust will provide a
copy of the Declaration and the Preferred Securities Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated Debentures
as indebtedness and the Preferred Securities as evidence of indirect beneficial
ownership in the Subordinated Debentures.
I-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
________ day of ________, ________.
KCPL FINANCING I
By:_________________________
as Reguar Trustee
By:_________________________
as Regular Trustee
--------------------------
I-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
____________________________________________________________________________
____________________________________________________________________________
___________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________________________
____________________________________________________________________________
___________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate.)
<PAGE>
ANNEX II
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
KCPL FINANCING I
Common Securities
(Liquidation Amount $25 per Common Security)
KCPL FINANCING I, a business trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that _____ (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.3% Trust
Originated Common Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of April 15, 1997, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Exhibit A to the Declaration.
Capitalized terms used herein but not defined herein shall have the respective
meanings given them in the Declaration. The Holder is entitled to the benefits
of the Common Securities Guarantee to the extent provided therein. The Trust
will provide a copy of the Declaration and the Common Securities Guarantee to
the Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated Debentures
as indebtedness and the Common Securities as evidence of indirect beneficial
ownership in the Subordinated Debentures.
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<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of ________, ________.
KCPL FINANCING I
By:_________________________
as Reguar Trustee
By:_________________________
as Regular Trustee
______________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
__________________________________________________________________________agent
to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate.)
II-2
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
Issuer
AND
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
INDENTURE
Dated as of April 1, 1997
Subordinated Debt Securities
<PAGE>
ARTICLE I
DEFINITIONS...............................................................1
SECTION 1.01. DEFINITIONS OF TERMS.......................................1
SECTION 1.02. INTERPRETATION.............................................9
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES.............................9
SECTION 2.01. DESIGNATION AND TERMS OF DEBT SECURITIES...................9
SECTION 2.02. FORM OF DEBT SECURITIES AND TRUSTEE'S
CERTIFICATE.............................................11
SECTION 2.03. DENOMINATIONS; PROVISIONS FOR PAYMENT.....................12
SECTION 2.04. EXECUTION AND AUTHENTICATION..............................14
SECTION 2.05. REGISTRATION OF TRANSFER AND EXCHANGE.....................15
SECTION 2.06. TEMPORARY SECURITIES......................................16
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT
SECURITIES..............................................17
SECTION 2.08. CANCELLATION..............................................18
SECTION 2.09. BENEFITS OF INDENTURE.....................................18
SECTION 2.10. AUTHENTICATING AGENT......................................18
SECTION 2.11. GLOBAL SECURITIES.........................................19
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND
PROVISIONS...............................................................21
SECTION 3.01. REDEMPTION................................................21
SECTION 3.02. NOTICE OF REDEMPTION......................................21
SECTION 3.03. PAYMENT UPON REDEMPTION...................................22
SECTION 3.04. SINKING FUND..............................................23
SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH
DEBT SECURITIES.........................................23
SECTION 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING
FUND....................................................24
ARTICLE IV
COVENANTS OF THE COMPANY.................................................24
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND
INTEREST................................................24
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY...........................24
SECTION 4.03. PAYING AGENTS.............................................25
SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF
TRUSTEE.................................................26
SECTION 4.05. COMPLIANCE WITH CONSOLIDATION PROVISIONS..................26
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<PAGE>
SECTION 4.06. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH
AFFILIATES..............................................26
SECTION 4.07. COVENANTS AS TO TRUST.....................................28
SECTION 4.08. CORPORATE EXISTENCE.......................................28
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE..........................................................28
SECTION 5.01. COMPANY TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF SECURITYHOLDERS............................28
SECTION 5.02. PRESERVATION OF INFORMATION; COMMUNICATIONS
WITH SECURITYHOLDERS....................................29
SECTION 5.03. REPORTS BY THE COMPANY....................................29
SECTION 5.04. REPORTS BY THE TRUSTEE....................................30
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERSON EVENT OF DEFAULT...........30
SECTION 6.01. EVENTS OF DEFAULT.........................................30
SECTION 6.02. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE..................................33
SECTION 6.03. APPLICATION OF MONEYS COLLECTED...........................35
SECTION 6.04. LIMITATION ON SUITS.......................................35
SECTION 6.05. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR
OMISSION NOT WAIVER.....................................36
SECTION 6.06. CONTROL BY SECURITYHOLDERS................................37
SECTION 6.07. UNDERTAKING TO PAY COSTS..................................37
SECTION 6.08. ACKNOWLEDGEMENT REGARDING PREFERRED
SECURITIES HOLDERS......................................38
ARTICLE VII
CONCERNING THE TRUSTEE...................................................38
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES OF
TRUSTEE.................................................38
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE.................................40
SECTION 7.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR
ISSUANCE OF DEBT SECURITIES.............................41
SECTION 7.04. MAY HOLD DEBT SECURITIES..................................42
SECTION 7.05. MONEYS HELD IN TRUST......................................42
SECTION 7.06. COMPENSATION AND REIMBURSEMENT............................42
SECTION 7.07. RELIANCE ON OFFICERS' CERTIFICATE.........................43
SECTION 7.08. QUALIFICATION; CONFLICTING INTERESTS......................43
SECTION 7.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...................43
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<PAGE>
SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR...............................................44
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR....................45
SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS..................................47
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
THE COMPANY.............................................47
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS...........................................48
SECTION 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS.....................48
SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS.....................48
SECTION 8.03. WHO MAY BE DEEMED OWNERS..................................49
SECTION 8.04. CERTAIN DEBT SECURITIES OWNED BY COMPANY
DISREGARDED.............................................49
SECTION 8.05. ACTIONS BINDING ON FUTURE
SECURITYHOLDERS.........................................50
ARTICLE IX
SUPPLEMENTAL INDENTURES..................................................50
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT THE
CONSENT OF SECURITYHOLDERS..............................50
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS.........................................51
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES.........................52
SECTION 9.04. DEBT SECURITIES AFFECTED BY SUPPLEMENTAL
INDENTURES..............................................52
SECTION 9.05. EXECUTION OF SUPPLEMENTAL INDENTURES......................53
ARTICLE X
SUCCESSOR CORPORATION....................................................53
SECTION 10.01. COMPANY MAY CONSOLIDATE, ETC.............................53
SECTION 10.02. SUCCESSOR CORPORATION SUBSTITUTED........................54
SECTION 10.03. EVIDENCE OF CONSOLIDATION, ETC. TO
TRUSTEE................................................54
ARTICLE XI
SATISFACTION AND DISCHARGE...............................................55
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE..................55
SECTION 11.02. DISCHARGE OF OBLIGATIONS.................................56
SECTION 11.03. DEPOSITED MONEYS TO BE HELD IN TRUST.....................56
SECTION 11.04. PAYMENT OF MONEYS HELD BY PAYING AGENTS..................56
SECTION 11.05. REPAYMENT TO COMPANY.....................................57
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<PAGE>
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS............................................................57
SECTION 12.01. NO RECOURSE..............................................57
ARTICLE XIII
MISCELLANEOUS PROVISIONS.................................................58
SECTION 13.01. EFFECT ON SUCCESSORS AND ASSIGNS.........................58
SECTION 13.02. ACTIONS BY SUCCESSOR.....................................58
SECTION 13.03. SURRENDER OF COMPANY POWERS..............................58
SECTION 13.04. NOTICES..................................................58
SECTION 13.05. GOVERNING LAW............................................58
SECTION 13.06. TREATMENT OF THE DEBT SECURITIES AS
DEBT...................................................59
SECTION 13.07. COMPLIANCE CERTIFICATES AND OPINIONS.....................59
SECTION 13.08. PAYMENTS ON BUSINESS DAYS................................59
SECTION 13.09. CONFLICT WITH TRUST INDENTURE ACT........................60
SECTION 13.10. COUNTERPARTS.............................................60
SECTION 13.11. SEPARABILITY.............................................60
SECTION 13.12. ASSIGNMENT...............................................60
SECTION 13.13. ACKNOWLEDGMENT OF RIGHTS.................................60
ARTICLE XIV
SUBORDINATION OF DEBT SECURITIES.........................................60
SECTION 14.01. SUBORDINATION TERMS......................................61
iv
<PAGE>
CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED INDENTURE
- -------------------- ----------
310(a) 7.09
310(b) 7.08
7.10
310(c) Inapplicable
311(a) 7.13(a)
311(b) 7.13(b)
311(c) Inapplicable
312(a) 5.01
5.02(a)
312(b) 5.02(b)
312(c) 5.02(c)
313(a) 5.04(a)
313(b) 5.04(b)
313(c) 5.04(a)
5.04(b)
313(d) 5.04(c)
314(a) 5.03
314(b) Inapplicable
314(c) 13.06
314(d) Inapplicable
314(e) 13.06
314(f) Inapplicable
315(a) 7.01(a)
7.02
315(b) 6.07
315(c) 7.01
315(d) 7.01(b)
7.01(c)
315(e) 6.07
316(a) 6.06
8.04
316(b) 6.04
316(c) 8.01
317(a) 6.02
317(b) 4.03
318(a) 13.08
* This Cross-Reference Table does not constitute part of the Indenture and
shall not have any bearing on the interpretation of Any of its terms or
provisions.
v
<PAGE>
THIS INDENTURE, dated as of April 1, 1997, between KANSAS CITY POWER &
LIGHT COMPANY, a Missouri corporation (the "Company") and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, duly organized and existing
under the laws of the United States as trustee (the "Trustee"):
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured subordinated debt securities (hereinafter referred to as
the "Debt Securities"), in an unlimited aggregate principal amount to be issued
from time to time in one or more series as in this Indenture provided, as
registered Debt Securities without coupons, to be authenticated by the
certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debt
Securities are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done;
NOW, THEREFORE, in consideration of the premises and the purchase of
the Debt Securities by the holders thereof, it is mutually covenanted and agreed
as follows for the equal and ratable benefit of the holders of Debt Securities:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS OF TERMS. The terms defined in this
Section (except as in this Indenture otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section and shall include the plural as well as the singular. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or that are by reference in such Act defined in the Securities
Act of 1933, as amended (except as herein otherwise expressly provided or unless
the context otherwise requires), shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of the execution of this instrument.
<PAGE>
AFFILIATE:
The term "Affiliate" shall mean, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or holding with power
to vote 10% or more of the outstanding voting securities or other ownership
interests of the specified Person, (b) any Person 10% or more of whose
outstanding voting securities or other ownership interests are directly or
indirectly owned, controlled or held with power to vote by the specified Person,
(c) any Person directly or indirectly controlling, controlled by or under common
control with the specified Person, (d) a partnership in which the specified
Person is a general partner, (e) any officer or director of the specified Person
and (f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
AUTHENTICATING AGENT:
The term "Authenticating Agent" shall mean an authenticating agent
with respect to all or any of the series of Debt Securities appointed with
respect to all of such series of the Debt Securities by the Trustee pursuant to
Section 2.10.
BANKRUPTCY LAW:
The term "Bankruptcy Law" shall mean Title 11, United States Code, or
any similar federal or state law for the relief of debtors.
BOARD OF DIRECTORS:
The term "Board of Directors" shall mean the board of directors of the
Company, or any duly authorized committee of such board or any officer of the
Company duly authorized by the board of directors of the Company or a duly
authorized committee of that board.
BOARD RESOLUTION:
The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification; provided that any Board Resolution that is adopted
by an officer of the Company shall be accompanied by a copy of a resolution of
either the board of directors of the Company or a duly authorized committee of
that board, certified as aforesaid, authorizing such officer to take such
action.
2
<PAGE>
BUSINESS DAY:
The term "Business Day" shall mean, with respect to any series of Debt
Securities, any day other than a day on which federal or state banking
institutions in Chicago, Illinois or the Borough of Manhattan, The City of New
York, are authorized or obligated by law, executive order or regulation to
close.
CERTIFICATE:
The term "Certificate" shall mean a certificate signed by the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company. The Certificate need not
comply with the provisions of Section 13.07.
COMMON SECURITIES:
The term "Common Securities" shall mean undivided beneficial interests
in the assets of a Trust which rank pari passu with Preferred Securities issued
by such Trust; PROVIDED, HOWEVER, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and maturity are
subordinated to the rights of holders of Preferred Securities.
COMPANY:
The term "Company" shall mean Kansas City Power & Light Company, a
corporation duly organized and existing under the laws of the State of Missouri,
and, subject to the provisions of Article X, shall also include its successors
and assigns.
CORPORATE TRUST OFFICE:
The term "Corporate Trust Office" shall mean the office of the Trustee
at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at One
First National Plaza, Suite 0126, Chicago, Illinois 60670, Attention: Corporate
Trust Administration.
CUSTODIAN:
The term "Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
3
<PAGE>
DECLARATION:
The term "Declaration" shall mean, in respect of a Trust, the amended
and restated declaration of trust of such Trust or any other governing
instrument of such Trust.
DEBT SECURITIES:
The term "Debt Securities" shall mean the Debt Securities
authenticated and delivered under this Indenture.
DEFAULT:
The term "Default" shall mean any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.
DEFAULTED INTEREST:
The term "Defaulted Interest" has the meaning specified in Section
2.03.
DEPOSITARY:
The term "Depositary" shall mean, with respect to Debt Securities of
any series for which the Company shall determine that such Debt Securities will
be issued as a Global Security, The Depository Trust Company, New York, New
York, another clearing agency, or any successor registered as a clearing agency
under the Exchange Act or other applicable statute or regulation, which, in each
case, shall be designated by the Company pursuant to either Section 2.01 or
2.11.
EVENT OF DEFAULT:
The term "Event of Default" shall mean, with respect to Debt
Securities of a particular series, any event specified in Section 6.01,
continued for the period of time, if any, therein designated.
EXCHANGE ACT:
The term "Exchange Act" shall mean the Securities Exchange Act of
1934.
GLOBAL SECURITY:
The term "Global Security" shall mean, with respect to any series of
Debt Securities, a Debt Security executed by the Company and delivered by the
Trustee to the Depositary or
4
<PAGE>
pursuant to the Depositary's instruction, all in accordance with this
Indenture, which shall be registered in the name of the Depositary or its
nominee.
GOVERNMENTAL OBLIGATIONS:
The term "Governmental Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; PROVIDED, HOWEVER, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
HEREIN, HEREOF AND HEREUNDER:
The terms "herein", "hereof", and "hereunder" and other words of
similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
INDENTURE:
The term "Indenture" shall mean this instrument as originally executed
or as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into in accordance with the terms hereof.
INTEREST PAYMENT DATE:
The term "Interest Payment Date", when used with respect to any
installment of interest on a Debt Security of a particular series, means the
date specified in such Debt Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Debt Securities of that series is due
and payable.
5
<PAGE>
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" shall mean a certificate signed by
the President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company that is delivered to the Trustee in accordance with the
terms hereof. Each such certificate shall include the statements provided for
in Section 13.07, if and to the extent required by the provisions thereof.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion in writing of
legal counsel, who may be an employee of or counsel for the Company, that is
delivered to the Trustee in accordance with the terms hereof. Each such opinion
shall include the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.
OUTSTANDING:
The term "Outstanding", when used with reference to Debt Securities of
any series, means, subject to the provisions of Section 8.04, as of any
particular time, all Debt Securities of that series theretofore authenticated
and delivered by the Trustee under this Indenture, except (a) Debt Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Debt Securities or portions thereof for the payment or redemption
of which moneys or Governmental Obligations in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); PROVIDED, HOWEVER, that if
such Debt Securities or portions of such Debt Securities are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given
as in Article III provided, or provision satisfactory to the Trustee shall have
been made for giving such notice, (c) Debt Securities in lieu of or in
substitution for which other Debt Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.07; and (d) Debt Securities with
respect to which the Company has effected defeasance and/or covenant defeasance
as provided in Article XI.
PERSON:
The term "Person" shall mean any individual, corporation, partnership,
limited liability company, joint
6
<PAGE>
venture, joint-stock company, unincorporated organization or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
PREDECESSOR SECURITY:
The term "Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same debt and
guarantee as that evidenced by such particular Debt Security; and, for the
purposes of this definition, any Debt Security authenticated and delivered under
Section 2.07 in lieu of a lost, destroyed or stolen Debt Security shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debt Security.
PREFERRED SECURITIES:
The term "Preferred Securities" shall mean undivided beneficial
interests in the assets of a Trust which rank pari passu with Common Securities
issued by such trust; PROVIDED, HOWEVER, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
PREFERRED SECURITIES GUARANTEE:
The term "Preferred Securities Guarantee" shall mean any guarantee
that the Company may enter into with a Trust or other Persons that operate
directly or indirectly for the benefit of holders of Preferred Securities of
such Trust.
PROPERTY TRUSTEE:
The term "Property Trustee" shall mean the entity performing the
functions of the Property Trustee of a Trust under the applicable Declaration of
such Trust.
RESPONSIBLE OFFICER:
The term "Responsible Officer," when used with respect to the Trustee,
means the Chairman of the board of directors, the President, any Vice President,
the Secretary, the Treasurer, any trust officer, any corporate trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
7
<PAGE>
SECURITYHOLDER, HOLDER, HOLDER OF DEBT SECURITIES, REGISTERED HOLDER:
The terms "Securityholder", "Holder", "Holder of Debt Securities",
"registered holder", or other similar term, means the Person or Persons in whose
name or names a particular Debt Security shall be registered on the books of the
Company kept for that purpose in accordance with the terms of this Indenture.
SECURITY REGISTER AND SECURITY REGISTRAR:
The terms "Security Register" and "Security Registrar" have the
respective meanings set forth in Section 2.05.
SUBSIDIARY:
The term "Subsidiary" shall mean, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
TRUST:
The term "Trust" shall mean any Delaware business trust formed by the
Company for the purpose of purchasing Debt Securities of the Company.
TRUSTEE:
The term "Trustee" shall mean The First National Bank of Chicago, not
in its individual capacity, and, subject to the provisions of Article VII, shall
also include its successors and assigns, and, if at any time there is more than
one Person acting in such capacity hereunder, "Trustee" shall mean each such
Person. The term "Trustee," as used with respect to a particular series of Debt
Securities, shall mean the trustee with respect to that series.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" shall mean the Trust Indenture Act of
1939.
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TRUST SECURITIES:
The term "Trust Securities" shall mean Common Securities and Preferred
Securities.
VOTING STOCK:
The term "Voting Stock", as applied to stock of any Person, means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
SECTION 1.02. INTERPRETATION. Each definition in this Indenture
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Indenture as a whole. The headings to the Articles and Sections
are for convenience of reference and shall not affect the meaning or
interpretation of this Indenture. References to Articles and Sections mean the
Articles and Sections of this Indenture.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. DESIGNATION AND TERMS OF DEBT SECURITIES. The
aggregate principal amount of Debt Securities that may be authenticated and
delivered under this Indenture is unlimited. The Debt Securities may be issued
in one or more series up to the aggregate principal amount of Debt Securities of
that series from time to time authorized by or pursuant to a Board Resolution of
the Company or pursuant to one or more indentures supplemental hereto. Prior to
the initial issuance of Debt Securities of any series, there shall be
established in or pursuant to a Board Resolution of the Company, and set forth
in an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto:
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(1) the title of the series of Debt Security (which shall distinguish
the Debt Securities of that series from all other series of Debt
Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of that series that may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of that series);
(3) the date or dates on which the principal of the Debt Securities
of that series is payable;
(4) the rate or rates at which the Debt Securities of that series
shall bear interest or the manner of calculation of such rate or rates, if
any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debt Securities of that series may
be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Debt
Securities of that series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a Holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Debt Securities of that series shall be redeemed
or purchased, in whole or in part, pursuant to such obligation;
(9) the subordination terms of the Debt Securities of that series;
(10) the form of the Debt Securities of that series, including the
form of the Certificate of Authentication for such series;
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(11) if other than denominations of twenty-five U.S. dollars ($25) or
any integral multiple thereof, the denominations in which the Debt
Securities of that series shall be issuable;
(12) whether and under what circumstances the Company will pay
additional amounts on the Debt Securities of the series to any Holder who
is not a United States Person (including any modification to the definition
of such term) in respect of any tax, assessment or governmental charge and,
if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such additional amounts (and the terms of any
such option);
(13) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture), including any
terms which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Debt
Securities of that series; and
(14) whether the Debt Securities are issuable as a Global Security
and, in such case, the identity of the Depositary for such series.
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of a series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate of the Company setting forth the terms of such series.
SECTION 2.02. FORM OF DEBT SECURITIES AND TRUSTEE'S CERTIFICATE. The
Debt Securities of any series and the Trustee's certificate of authentication to
be borne by such Debt Securities shall be substantially of the tenor and purport
as set forth in one or more indentures supplemental hereto or as provided in a
Board Resolution of the Company and as set forth in an Officers' Certificate of
the Company, and may have such letters, numbers or other marks of identification
or designation and such legends or endorsements printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto
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or with any rule or regulation of any stock exchange on which Debt Securities of
that series may be listed, or to conform to usage.
SECTION 2.03. DENOMINATIONS; PROVISIONS FOR PAYMENT. The Debt
Securities shall be issuable as registered Debt Securities and in the
denominations of twenty-five U.S. dollars ($25) or any integral multiple
thereof, subject to Section 2.01(11). The Debt Securities of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Debt Securities of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America that at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Debt Security shall be dated
the date of its authentication. Interest on the Debt Securities shall be
computed on the basis of a 360-day year composed of twelve 30-day months.
The interest installment on any Debt Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that series shall be paid to the Person in whose name said Debt
Security (or one or more Predecessor Debt Securities) is registered at the close
of business on the regular record date for such interest installment. In the
event that any Debt Security of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security as provided in Section 3.03.
Any interest on any Debt Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that series (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder; and such Defaulted Interest shall be paid
by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Debt
Securities to the Persons in whose names such Debt Securities (or their
respective Predecessor Debt Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the
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Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Debt Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first class postage prepaid, to each
Securityholder at the address of such Securityholder as it appears in the
Security Register (as hereinafter defined), not less than 10 days prior to
such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Debt Securities (or their respective Predecessor Debt
Securities) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debt Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debt Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustees of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee.
Unless otherwise set forth in a Board Resolution of the Company or one
or more indentures supplemental hereto establishing the terms of any series of
Debt Securities pursuant to Section 2.01 hereof, the term "REGULAR RECORD DATE"
as used in this Section with respect to a series of Debt Securities with respect
to any Interest Payment Date for such series shall mean either (a) the fifteenth
day of the month immediately preceding the month in which an Interest Payment
Date established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the first day of a month, (b) the
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fifteenth day of the month in which an Interest Payment Date established for
such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the last day of such month, or (c) the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.
Subject to the foregoing provisions of this Section, each Debt
Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debt Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by
such other Debt Security.
SECTION 2.04. EXECUTION AND AUTHENTICATION. The Debt Securities
shall be signed on behalf of the Company by its President or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant Secretaries.
Signatures may be in the form of a manual or facsimile signature. The Company
may use the facsimile signature of any Person who shall have been a President or
Vice President thereof, or of any Person who shall have been a Secretary or
Assistant Secretary thereof, notwithstanding the fact that at the time the Debt
Securities shall be authenticated and delivered or disposed of such Person shall
have ceased to be the President or a Vice President, or the Secretary or an
Assistant Secretary, of the Company. The seal, if any, of the Company may be in
the form of a facsimile of such seal and may be impressed, affixed, imprinted or
otherwise reproduced on the Debt Securities. The Debt Securities may contain
such notations, legends or endorsements required by law, stock exchange rule or
usage. Each Debt Security shall be dated the date of its authentication by the
Trustee.
A Debt Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debt Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities of any series executed
by the Company to the Trustee for authentication, together with a written order
of the Company for the authentication and delivery of such Debt Securities,
signed by its President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with
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such written order shall authenticate and deliver such Debt Securities.
In authenticating such Debt Securities and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debt Securities
if the issue of such Debt Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debt Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.05. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debt Securities of any series may be exchanged upon presentation
thereof at the office or agency of the Company designated for such purpose in
the Borough of Manhattan, the City and State of New York, for other Debt
Securities of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Debt Securities so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in exchange therefor the Debt Security or Debt Securities of the same series
that the Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a register
or registers (herein referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debt Securities and the transfers of Debt Securities as in this Article
provided and which at all reasonable times shall be open for inspection by the
Trustee. The registrar for the purpose of registering Debt Securities and
transfer of Debt Securities as herein provided shall be appointed as authorized
by Board Resolution (the "Security Registrar").
Upon surrender for transfer of any Debt Security at the office or
agency of the Company designated for such purpose in the Borough of Manhattan,
the City and State of New York, the
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Company shall execute, the Trustee shall authenticate and such office or agency
shall deliver in the name of the transferee or transferees a new Debt Security
or Debt Securities of the same series and same aggregate principal amount as the
Debt Security presented for transfer.
All Debt Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Security Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly executed by the registered holder or by such holder's duly
authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration
of transfer of Debt Securities, or issue of new Debt Securities in case of
partial redemption of any series, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04
not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debt Securities of a series during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of less than all the Outstanding Debt Securities of the
same series and ending at the close of business on the day of such mailing, nor
(ii) to register the transfer of or exchange any Debt Securities of any series
or portions thereof called for redemption. The provisions of this Section 2.05
are, with respect to any Global Security, subject to Section 2.11 hereof.
SECTION 2.06. TEMPORARY SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute, and the
Trustee shall authenticate and deliver, temporary Debt Securities (printed,
lithographed or typewritten) of any authorized denomination. Such temporary
Debt Securities shall be substantially in the form of the definitive Debt
Securities in lieu of which they are issued, but with such omissions, insertions
and variations as may be appropriate for temporary Debt Securities, all as may
be determined by the Company. Every temporary Debt Security of any series shall
be executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Debt Securities of such series. Without unnecessary delay the
Company will execute and will furnish definitive Debt Securities of such series
and thereupon any or all temporary Debt Securities of such series may be
surrendered in exchange therefor (without charge to the
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holders), at the office or agency of the Company designated for the purpose in
the Borough of Manhattan, the City and State of New York, and the Trustee shall
authenticate and such office or agency shall deliver in exchange for such
temporary Debt Securities an equal aggregate principal amount of definitive Debt
Securities of such series, unless the Company advises the Trustee to the effect
that definitive Debt Securities need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debt Securities of
such series shall be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series authenticated and delivered hereunder.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES.
In case any temporary or definitive Debt Security shall become mutilated or be
destroyed, lost or stolen, the Company (subject to the next succeeding sentence)
shall execute, and upon the Company's request the Trustee (subject as aforesaid)
shall authenticate and deliver, a new Debt Security of the same series, bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated Debt Security, or in lieu of and in substitution for the Debt Security
so destroyed, lost or stolen. In every case the applicant for a substituted
Debt Security shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of the applicant's Debt Security and of the ownership thereof.
The Trustee may authenticate any such substituted Debt Security and deliver the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Debt Security, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. In case any Debt Security
that has matured or is about to mature shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity as they may
require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Debt Security and of the ownership thereof.
Every replacement Debt Security issued pursuant to the provisions of
this Section shall constitute an additional
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contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Debt Security shall be found at any time, or be enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debt Securities of the same series duly
issued hereunder. All Debt Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debt Securities,
and shall preclude (to the extent lawful) any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.08. CANCELLATION. All Debt Securities surrendered for the
purpose of payment, redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and
no Debt Securities shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. On request of the
Company at the time of such surrender, the Trustee shall deliver to the Company
canceled Debt Securities held by the Trustee. In the absence of such request
the Trustee may dispose of canceled Debt Securities in accordance with its
standard procedures and deliver a certificate of disposition to the Company. If
the Company shall otherwise acquire any of the Debt Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debt Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.09. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debt Securities, express or implied, shall give or be construed to give to
any Person, other than the parties hereto and the holders of the Debt Securities
(and, with respect to the provisions of Article XIV, the holders of any
indebtedness to which the Debt Securities are subordinated) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debt Securities (and, with respect to the provisions of
Article XIV, the holders of any indebtedness to which the Debt Securities are
subordinated).
SECTION 2.10. AUTHENTICATING AGENT. So long as any Debt Securities
of any series remain Outstanding, there may be an Authenticating Agent for any
or all such series of Debt
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Securities which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debt Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Debt Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debt Securities by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series.
Each Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is
subject to supervision or examination by federal or state authorities. If at
any time any Authenticating Agent shall cease to be eligible in accordance with
these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. GLOBAL SECURITIES. (a) If the Company shall establish
pursuant to Section 2.01 that the Debt Securities of a particular series are to
be issued as a Global Security or Securities, then the Company shall execute and
the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a
Global Security that (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all of the Outstanding Debt
Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Debt Security may be transferred, in whole
but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
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(b) Notwithstanding the provisions of Section 2.05, the Global
Security or Securities of a series may be transferred, in whole but not in part
and in the manner provided in Section 2.05, only to another nominee of the
Depositary for such series, or to a successor Depositary for such series
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary for a series of Debt Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, at a time when the Depositary is required to be so
registered to act as such Depositary and a successor Depositary for such series
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, this Section 2.11
shall no longer be applicable to the Debt Securities of such series and the
Company will execute, and subject to Section 2.05, the Trustee will authenticate
and deliver the Debt Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security or Securities of
such series in exchange for such Global Security or Securities. In addition,
the Company may at any time determine that the Debt Securities of any series
shall no longer be represented by a Global Security or Securities and that the
provisions of this Section 2.11 shall no longer apply to the Debt Securities of
such series. In such event, the Company will execute and subject to Section
2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, will authenticate and deliver the Debt Securities
of such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities of such series in exchange for such
Global Security or Securities. Upon the exchange of the Global Security or
Securities for such Debt Securities in definitive registered form without
coupons, in authorized denominations, the Global Security or Securities shall be
canceled by the Trustee. Such Debt Securities in definitive registered form
issued in exchange for the Global Security or Securities pursuant to this
Section 2.11(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Depositary for delivery to the Persons
in whose names such Debt Securities are so registered.
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ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. REDEMPTION. The Company may redeem the Debt Securities
of any series issued hereunder on and after the dates and in accordance with the
terms established for such series pursuant to Section 2.01 hereof.
SECTION 3.02. NOTICE OF REDEMPTION. (a) In case the Company shall
desire to exercise such right to redeem all or, as the case may be, a portion of
the Debt Securities of any series in accordance with the right reserved so to
do, the Company shall, or shall cause the Trustee to, give notice of such
redemption to holders of the Debt Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 90 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Security Register unless a shorter period is specified in the Debt Securities to
be redeemed. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered
holder receives the notice. In any case, failure duly to give such notice to
the holder of any Debt Security of any series designated for redemption in whole
or in part, or any defect in such notice, shall not affect the validity of the
proceedings for the redemption of any other Debt Securities of such series or
any other series. In the case of any redemption of Debt Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Debt Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with any such
restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debt Securities of that series are
to be redeemed, and shall state that payment of the redemption price of such
Debt Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon
presentation and surrender of such Debt Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice, that from
and after said date interest will cease to accrue and that the redemption is for
a sinking fund, if such is the case. If less than all the Debt Securities of a
series are to be redeemed, the notice to the holders of Debt Securities of that
series to be redeemed in whole or in part shall specify the particular Debt
Securities to be so redeemed. In case any Debt Security is to be redeemed in
part only, the
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notice that relates to such Debt Security shall state the portion of the
principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Debt Security, a new Debt Security or
Debt Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If less than all the Debt Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in advance
of the date fixed for redemption as to the aggregate principal amount of Debt
Securities of the series to be redeemed, and thereupon the Trustee shall select,
by lot or in such other manner as it shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or portions
(equal to twenty-five U.S. dollars ($25) or any integral multiple thereof) of
the principal amount of such Debt Securities of a denomination larger than $25,
the Debt Securities to be redeemed and shall thereafter promptly notify the
Company in writing of the numbers of the Debt Securities to be redeemed, in
whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the Debt
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed
as above provided, the Debt Securities or portions of Debt Securities of the
series to be redeemed specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption and
interest on such Debt Securities or portions of Debt Securities shall cease to
accrue on and after the date fixed for redemption, unless the Company shall
default in the payment of such redemption price and accrued interest with
respect to any such Debt Security or portion thereof. On presentation and
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surrender of such Debt Securities on or after the date fixed for redemption at
the place of payment specified in the notice, said Debt Securities shall be paid
and redeemed at the applicable redemption price for such series, together with
interest accrued thereon to the date fixed for redemption (but if the date fixed
for redemption is an interest payment date, the interest installment payable on
such date shall be payable to the registered holder at the close of business on
the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Debt Security of such series that is to
be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debt Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debt Security so
presented.
SECTION 3.04. SINKING FUND. The provisions of Sections 3.04, 3.05
and 3.06 shall be applicable to any sinking fund for the retirement of Debt
Securities of a series, except as otherwise specified as contemplated by Section
2.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "MANDATORY
SINKING FUND PAYMENT," and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"OPTIONAL SINKING FUND PAYMENT". If provided for by the terms of Debt
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.05. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT
SECURITIES. The Company (i) may deliver Outstanding Debt Securities of a series
(other than any Debt Securities previously called for redemption) and (ii) may
apply as a credit Debt Securities of a series that have been redeemed either at
the election of the Company pursuant to the terms of such Debt Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Debt Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Debt Securities of such
series required to be made pursuant to the terms of such Debt Securities as
provided for by the terms of such series, PROVIDED that such Debt Securities
have not been previously so
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credited. Such Debt Securities shall be received and credited for such purpose
by the Trustee at the redemption price specified in such Debt Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
SECTION 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not
less than 45 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of such series, the portion thereof, if any, that is to be
satisfied by delivering and crediting Debt Securities of that series pursuant to
Section 3.05 and the basis for such credit and will, together with such
Officers' Certificate, deliver to the Trustee any Debt Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date,
the Trustee shall select the Debt Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.02. Such notice having been duly
given, the redemption of such Debt Securities shall be made upon the terms and
in the manner stated in Section 3.03.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company will duly and punctually pay or cause to be paid the principal of (and
premium, if any) and interest on the Debt Securities of each series at the time
and place and in the manner provided herein and established with respect to such
Debt Securities.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. So long as any series
of the Debt Securities remain Outstanding, the Company agrees to maintain an
office or agency in the Borough of Manhattan, the City and State of New York,
with respect to each such series and at such other location or locations as may
be designated as provided in this Section 4.02, where (i) Debt Securities of
such series may be presented for payment, (ii) Debt Securities of such series
may be presented as hereinabove authorized for registration of transfer and
exchange, and (iii) notices and demands to or upon the Company in respect of the
Debt Securities of such series and this Indenture may be given or served, such
designation to continue with respect to such office
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or agency until the Company shall, by written notice signed by its President or
a Vice President and delivered to the trustee, designate some other office or
agency for such purposes or any of them. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
notices and demands.
SECTION 4.03. PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for all or
any series of the Debt Securities, other than the Trustee, the Company will
cause each such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the Debt
Securities of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debt Securities) in trust for the
benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company to make any payment of the principal of (and premium, if any) or
interest on the Debt Securities of that series when the same shall be due
and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debt Securities, it will on or before each due date of the
principal of (and premium, if any) or interest on Debt Securities of that
series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Debt Securities of that series until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of such action, or any failure by it to take such
action. Whenever the
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Company shall have one or more paying agents for any series of Debt Securities,
it will, on or before each due date of the principal of (and premium, if any) or
interest on any Debt Securities of that series, deposit with the paying agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of such deposit or
failure so to deposit.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 4.05. COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company
will not, while any of the Debt Securities remain Outstanding, consolidate with,
or merge into, or merge into itself, or sell or convey all or substantially all
of its property to any other company unless the provisions of Article X hereof
are complied with.
SECTION 4.06. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.
(a) If Debt Securities are issued to a Trust or a trustee of such
Trust in connection with the issuance of Preferred Securities by such Trust and
(i) there shall have occurred any event that would constitute an Event of
Default or (ii) the Company shall be in default with respect to its payment or
any obligations under the Preferred Securities Guarantee relating to such
Preferred Securities, then (x) the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock (other than
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(A) purchases or acquisitions of shares of Company common stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligations of the Company, other than a
contractual obligation ranking PARI PASSU with or junior to the Debt
Securities), (B) as a result of a reclassification of Company capital stock or
the exchange or conversion of one class or series of Company capital stock for
another class or series of Company capital stock, or (C) the purchase of
fractional interests in shares of Company capital stock pursuant to the
conversion or exchange provisions of such Company capital stock or the security
being converted or exchanged), (y) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank PARI
PASSU with or junior to such Debt Securities and (z) the Company shall not make
guarantee payments with respect to the foregoing (other than pursuant to
Preferred Securities Guarantees).
(b) If Debt Securities are issued to a Trust or a trustee of such
Trust in connection with the issuance of Trust Securities by such Trust and the
Company shall have given notice of its election to defer payments of interest on
such Debt Securities by extending the interest payment period as provided in any
indenture supplemental hereto and such period, or any extension thereof, shall
be continuing, then (i) the Company shall not declare or pay any dividend, or
make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock (other than
(A) purchases or acquisitions of shares of Company common stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligations of the Company, other than a
contractual obligation ranking PARI PASSU with or junior to the Debt Securities)
(B) as a result of a reclassification of Company capital stock or the exchange
or conversion of one class or series of Company capital stock for another class
or series of Company capital stock, or (C) the purchase of fractional interests
in shares of Company capital stock pursuant to the conversion or exchange
provisions of such Company capital stock or the security being converted or
exchanged), (ii) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company which rank PARI PASSU with or
junior to such Debt Securities and (iii) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to
Preferred Securities Guarantees).
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SECTION 4.07. COVENANTS AS TO TRUST. In the event Debt Securities
are issued and sold to a Trust in connection with the issuance of Trust
Securities by such Trust, for so long as such Trust Securities remain
outstanding, the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of such Trust; PROVIDED, HOWEVER, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of such Common Securities, (ii) not cause, as sponsor of such Trust,
or permit, as holder of Common Securities of such Trust, the dissolution,
winding-up or termination of such trust, except in connection with a
distribution of Debt Securities as provided in the Declaration and in connection
with certain mergers, consolidations or amalgamations permitted by the
Declaration and (iii) use its reasonable efforts to cause such Trust (a) to
remain a business trust, except in connection with a distribution of Debt
Securities, the redemption of all of the Trust Securities of such Trust or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration of such Trust, and (b) to otherwise continue to be classified for
United States federal income tax purposes as a grantor trust.
SECTION 4.08. CORPORATE EXISTENCE. The Company will, subject to the
provisions of Article X, at all times maintain its corporate existence and right
to carry on business and will duly procure all renewals and extensions thereof,
and, to the extent necessary or desirable in the operation of its business, will
use its best efforts to maintain, preserve and renew all of its rights, powers,
privileges and material franchises.
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Debt Securities as of such
regular record date, PROVIDED that the Company shall not be obligated to furnish
or cause to be furnished such list at any time that such list shall not differ
in any respect from the most recent list furnished to the Trustee by the Company
and (b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that in either case, no such list need be
furnished for any series of
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Debt Securities for which the Trustee shall be the Security Registrar.
SECTION 5.02. PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debt Securities contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Debt Securities
received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Debt Securities.
SECTION 5.03. REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
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(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
SECTION 5.04. REPORTS BY THE TRUSTEE.
(a) Within 60 days after May 15 of each year in which any of the Debt
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding May 15, if
and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debt Securities are listed (if so listed) and
also with the Commission. The Company agrees to notify the Trustee when any
Debt Securities become listed on any stock exchange.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
(a) Whenever used herein with respect to Debt Securities of a
particular series, "Event of Default" means any one or more of the following
events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of
interest upon any of the Debt Securities of that series, as and when the
same shall become due and payable, and continuance of such default for a
period of 30 days; PROVIDED, HOWEVER, that a valid extension of an interest
payment period by the Company in accordance with
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the terms of any indenture supplemental hereto, shall not constitute a
default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Debt Securities of that series as and when
the same shall become due and payable whether at maturity, upon redemption,
by declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
(3) the Company fails to observe or perform any other of its
covenants or agreements with respect to that series contained in this
Indenture or otherwise established with respect to that series of Debt
Securities pursuant to Section 2.01 hereof (other than a covenant or
agreement that has been expressly included in this Indenture solely for the
benefit of one or more series of Debt Securities other than such series)
for a period of 90 days after the date on which written notice of such
failure, requiring the same to be remedied and stating that such notice is
a "Notice of Default" hereunder, shall have been given to the Company by
the Trustee, by registered or certified mail, or to the Company and the
Trustee by the holders of at least 25% in principal amount of the Debt
Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law (i) commences a voluntary case, (ii) consents to the entry of an order
for relief against it in an involuntary case, (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its
creditors;
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all
of its property, or (iii) orders the liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
(6) in the event Debt Securities are issued and sold to a Trust of
the Company in connection with the issuance of Trust Securities by such
Trust, such Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of Debt Securities to holders of Trust
Securities in liquidation of their
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interests in such Trust, (ii) the redemption of all outstanding Trust
Securities of such Trust, and (iii) mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Trust.
(b) If an Event of Default described in clauses 1, 2, 3 or 6 of
Section 6.01(a) with respect to Debt Securities of any series at the time
outstanding occurs and is continuing, unless the principal of all the Debt
Securities of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee, if given by such Securityholders), may
declare the principal of all the Debt Securities of that series to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything contained in this
Indenture or in the Debt Securities of that series or established with respect
to that series pursuant to Section 2.01 to the contrary. If an Event of Default
specified in clause (4) or (5) of Section 6.01(a) occurs or is continuing, then
the principal amount of all the Debt Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder.
(c) At any time after the principal of the Debt Securities of that
series shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of
the Debt Securities of that series then Outstanding hereunder, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debt
Securities of that series and the principal of (and premium, if any, on) any and
all Debt Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Debt Securities
of that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on
Debt Securities of that series that shall not have become due by their terms,
shall have been remedied or waived as provided in Section 6.06.
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No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Debt Securities of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 6.02. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debt Securities of a
series, or any payment required by any sinking or analogous fund established
with respect to that series as and when the same shall have become due and
payable, and such default shall have continued for a period of 90 days, or (2)
in case it shall default in the payment of the principal of (or premium, if any,
on) any of the Debt Securities of a series when the same shall have become due
and payable, whether upon maturity of the Debt Securities of a series or upon
redemption or upon declaration or otherwise, then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities of that series, the whole amount that then shall have become due and
payable on all such Debt Securities for principal (and premium, if any) or
interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law and, if the Debt Securities are held by a
Trust, without duplication of any other amounts paid by such Trust in respect
thereof) upon overdue installments of interest at the rate per annum expressed
in the Debt Securities of that series; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection and
the amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or
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other obligor upon the Debt Securities of that series and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Securities of that series,
wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company or its creditors or property, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee and of the
holders of Debt Securities of such series allowed for the entire amount due and
payable by the Company under this Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Debt Securities of such series to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Securityholders, to pay to the Trustee
any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debt Securities
of that series, may be enforced by the Trustee without the possession of any of
such Debt Securities, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of the
Debt Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.03. APPLICATION OF MONEYS COLLECTED. Any moneys collected
by the Trustee pursuant to this Article with respect to a particular series of
Debt Securities shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such moneys on account
of principal (or premium, if any) or interest, upon presentation of the Debt
Securities of that series, and notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all indebtedness to which the Debt
Securities are subordinated if and to the extent required by Article XIV;
and
THIRD: To the payment of the amounts then due and unpaid upon Debt
Securities of such series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Debt Securities for principal (and
premium, if any) and interest, respectively.
SECTION 6.04. LIMITATION ON SUITS. No holder of any Debt Security of
any series shall have any right by virtue or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless (i) such holder
previously shall have given to the Trustee written notice of an Event of Default
and of the continuance thereof with respect to the Debt Securities of such
series specifying such Event of Default, as herein provided; (ii) the holders of
not less than 25% in aggregate principal amount of the Debt Securities of such
series then Outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee hereunder;
(iii) such holder or holders shall have offered to the Trustee such reason-
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able indemnity as it may require against the costs, expenses and liabilities to
be incurred therein or thereby; and (iv) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity, shall have failed to
institute any such action, suit or proceeding; and (v) during such 60 day
period, the holders of a majority in principal amount of the Debt Securities of
that series do not give the Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Debt Security to
receive payment of the principal of (and premium, if any) and interest on such
Debt Security, as therein provided, on or after the respective due dates
expressed in such Debt Security (or in the case of redemption, on the redemption
date), or to institute suit for the enforcement of any such payment on or after
such respective dates or redemption date, shall not be impaired or affected
without the consent of such holder, and by accepting a Debt Security hereunder
it is expressly understood, intended and covenanted by the taker and holder of
every Debt Security of such series with every other such taker and holder and
the Trustee, that no one or more holders of Debt Securities of such series shall
have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debt Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Debt Securities of such series.
For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 6.05. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debt Securities.
(b) No delay or omission of the Trustee or of any holder of any of
the Debt Securities to exercise any right or
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power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or an acquiescence therein; and, subject to the provisions of
Section 6.04, every power and remedy given by this Article or by law to the
Trustee or the Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the Securityholders.
SECTION 6.06. CONTROL BY SECURITYHOLDERS. The holders of a majority
in aggregate principal amount of the Debt Securities of any series at the time
Outstanding, determined in accordance with Section 8.04, shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to such series; PROVIDED, HOWEVER, that such direction
shall not be in conflict with any rule of law or with this Indenture or be
unduly prejudicial to the rights of holders of Debt Securities of any other
series at the time Outstanding determined in accordance with Section 8.04.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding affected thereby, determined in accordance with Section
8.04, may on behalf of the holders of all of the Debt Securities of such series
waive any past default in the performance of any of the covenants contained
herein or established pursuant to Section 2.01 with respect to such series and
its consequences, except (i) a default in the payment of the principal of, or
premium, if any, or interest on, any of the Debt Securities of that series as
and when the same shall become due by the terms of such Debt Securities
otherwise than by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal and any
premium has been deposited with the Trustee (in accordance with Section 6.01(c))
or (ii) a default in the covenants contained in Section 4.06(b). Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Debt
Securities of such series shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 6.07. UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each holder of any Debt Securities by such holder's
acceptance thereof shall be deemed to have
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agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding more than 10% in aggregate principal amount of
the Outstanding Debt Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series, on or after
the respective due dates expressed in such Debt Security or established pursuant
to this Indenture.
SECTION 6.08. ACKNOWLEDGEMENT REGARDING PREFERRED SECURITIES HOLDERS.
The Company acknowledges that, with respect to any Debt Securities held by a
Trust or a trustee of such Trust, if the Property Trustee of such Trust fails to
enforce its rights under this Indenture as the holder of the series of Debt
Securities held as the assets of such Trust, then holders of Preferred
Securities of such Trust may institute legal proceedings directly against the
Company to enforce such rights under this Indenture without first instituting
any legal proceedings against such Property Trustee or any other Person.
ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing of all Events of
Default with respect to the Debt Securities of that series that may have
occurred, shall undertake to perform with respect to the Debt Securities of such
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to the Debt Securities of
a series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Debt Securities of that series such of the rights and
powers vested in it by this Indenture, and use the
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same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all such Events
of Default with respect to that series that may have occurred:
(i) the duties and obligations of the Trustee shall with respect to
the Debt Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with
respect to the Debt Securities of such series except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Debt Securities of such series conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirement of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the Debt
Securities of any series at the time Outstanding relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the
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Trustee under this Indenture with respect to the Debt Securities of that series;
and
(4) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise
provided in Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval, bond,
security or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President, or any Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein).
(c) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel.
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, provided that nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to a series of the Debt Securities (that has not
been cured or waived) to exercise with respect to Debt Securities of that series
such of the rights and powers
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vested in it by this Indenture, and to use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval, bond,
security, or other papers or documents, unless requested in writing so to do by
the holders of not less than a majority in principal amount of the Outstanding
Debt Securities of the particular series affected thereby (determined as
provided in Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to so proceeding.
The reasonable expense of every such examination shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(h) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate.
SECTION 7.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
DEBT SECURITIES.
(a) The recitals contained herein and in the Debt Securities shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
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(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities.
(c) The Trustee shall not be accountable for the use
or application by the Company of any of the Debt Securities or of the proceeds
of such Debt Securities, or for the use or application of any moneys paid over
by the Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys received
by any paying agent other than the Trustee.
SECTION 7.04. MAY HOLD DEBT SECURITIES. The Trustee or any paying
agent or Security Registrar, in its individual or any other capacity, may become
the owner or pledgee of Debt Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
SECTION 7.05. MONEYS HELD IN TRUST. Subject to the provisions of
Section 11.05, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
moneys received by it hereunder except such as it may agree with the Company to
pay thereon.
SECTION 7.06. COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this
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Indenture, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be secured by a lien prior to that of the Debt
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular Debt
Securities.
SECTION 7.07. RELIANCE ON OFFICERS' CERTIFICATE. Except as otherwise
provided in Section 7.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect thereof is
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
SECTION 7.08. QUALIFICATION; CONFLICTING INTERESTS. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 7.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee with respect to the Debt Securities issued hereunder
which shall at all times 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 other Person permitted to act as
trustee by the Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
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forth in its most recent report of condition so published. The Company may not,
nor may any Person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debt Securities of one or more series by giving
written notice thereof to the Company and by transmitting notice of resignation
by mail, first class postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
Trustee with respect to the Debt Securities of such series by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor Trustee. If no successor Trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to the Debt
Securities of such series, or any Securityholder of that series who has been a
bona fide holder of a Debt Security or Debt Securities for at least six months
may, subject to the provisions of Section 6.08, on behalf of that holder and all
others similarly situated, petition any such court for the appointment of a
successor Trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appoint a successor Trustee.
(b) In case at any time any one of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.10 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
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(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debt Securities and
appoint a successor Trustee by written instrument, in duplicate, executed
by order of the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor Trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Securityholder who has been a bona
fide holder of a Debt Security or Debt Securities for at least six months
may, on behalf of that holder and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor Trustee.
(c) The holders of a majority in aggregate principal amount of the
Debt Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee and the Company
and may appoint a successor Trustee for such series with the consent of the
Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee with respect to the Debt Securities of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor Trustee as provided in Section 7.11.
(e) Any successor Trustee appointed pursuant to this
Section may be appointed with respect to the Debt Securities of one or more
series or all of such series, and at any time there shall be only one Trustee
with respect to the Debt Securities of any particular series.
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Debt Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
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removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor trustee all the rights, powers, and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Debt Securities of that or those series to which the
appointment of such successor Trustee relates have no further responsibility for
the exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Debt Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of
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the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debt Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor Trustee as provided
in this Section, the Company shall transmit notice of the succession of such
Trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor Trustee, the successor Trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debt Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debt Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debt
Securities.
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture
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Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in
this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Debt Securities of a particular
series may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action the holders of such majority or
specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such
holders of Debt Securities of that series in person or by agent or proxy
appointed in writing.
If the Company shall solicit from the holders of any series of Debt
Securities any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such series for the
determination of holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the holders of record at the close of
business on the record date shall be deemed to be Securityholders for the
purposes of determining whether Securityholders of the requisite proportion of
Outstanding Debt Securities of that series have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding Debt Securities of
that series shall be computed as of the record date; PROVIDED, HOWEVER, that no
such authorization, agreement or consent by such Securityholders on the record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the
provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or the agent or proxy
of such
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Securityholder and proof of the holding by any Person of any of the Debt
Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debt Securities shall be proved by the Security
Register of such Debt Securities or by a certificate of the Security
Registrar thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. WHO MAY BE DEEMED OWNERS. Prior to the due presentment
for registration of transfer of any Debt Security, the Company, the Trustee, any
paying agent and any Security Registrar may deem and treat the Person in whose
name such Debt Security shall be registered upon the books of the Company as the
absolute owner of such Debt Security (whether or not such Debt Security shall be
overdue and notwithstanding any notice of ownership or writing thereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal of, premium, if any, and (subject to Section
2.03) interest on such Debt Security and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any Security Registrar shall be
affected by any notice to the contrary.
SECTION 8.04. CERTAIN DEBT SECURITIES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate principal amount
of Debt Securities of a particular series have concurred in any direction,
consent or waiver under this Indenture, the Debt Securities of that series that
are owned by the Company or any other obligor on the Debt Securities of that
series or by any Person directly or indirectly controlling or controlled by or
under common control with the Company or any other obligor on the Debt
Securities of that series shall be disregarded and deemed not to be outstanding
for the purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debt Securities of such series that the
Trustee actually knows are so owned shall be so disregarded. The Debt
Securities so owned that have been pledged in good faith may be regarded as
outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debt Securities and that the pledgee is not a
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Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of
a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
SECTION 8.05. ACTIONS BINDING ON FUTURE SECURITYHOLDERS. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of a majority or specified
percentage in aggregate principal amount of the Debt Securities of a particular
series in connection with such action, any holder of a Debt Security of that
series that is shown by the evidence to be included in the Debt Securities the
holders of which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in Section 8.02, revoke
such action so far as concerns such Debt Security. Except as aforesaid, any
such action taken by the holder of any Debt Security shall be conclusive and
binding upon such holder and upon all future holders and owners of such Debt
Security, and of any Debt Security issued in exchange therefor, on registration
of transfer thereof or in place thereof, irrespective of whether or not any
notation in regard thereto is made upon such Debt Security. Any action taken by
the holders of a majority or specified percentage in aggregate principal amount
of the Debt Securities of a particular series in connection with such action
shall be conclusively binding upon the Company, the Trustee and the holders of
all the Debt Securities of that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS. In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company and the Guarantor and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as then
in effect), without the consent of the Securityholders, for one or more of the
following purposes:
(a) to cure any ambiguity, defect or inconsistency herein or in the
Debt Securities of any series;
(b) to comply with Article X;
(c) to provide for uncertificated Debt Securities in addition to or
in place of certificated Debt Securities;
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(d) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities (and if such covenants are
to be for the benefit of less than all series of Debt Securities, stating
that such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon the
Company;
(e) to add to, delete from, or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of
any Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms
and conditions of the Debt Securities of any series as provided in Section
2.01, to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any series of Debt Securities,
or to add to the rights of the holders of any series of Debt Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debt Securities at the time Outstanding
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. With the consent (evidenced as provided in Section 8.01) of
the holders of not less than a majority in aggregate principal amount of the
Debt Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any
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manner not covered by Section 9.01 the rights of the holders of the Debt
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the holders of each Debt
Security then Outstanding and affected thereby, (i) extend the fixed maturity of
any Debt Securities of any series, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the holder
of each Debt Security so affected or (ii) reduce the aforesaid percentage of
Debt Securities, the holders of which are required to consent to any such
supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, this Indenture shall, with respect to such series, be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debt Securities of the
series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.04. DEBT SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debt Securities of any series affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debt Securities of that series so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Debt
Securities of that series then outstanding.
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SECTION 9.05. EXECUTION OF SUPPLEMENTAL INDENTURES. Upon the request
of the Company, accompanied by a Board Resolution authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of Securityholders required to consent thereto as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into
such supplemental indenture. The Trustee, subject to the provisions of Section
7.01, may receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Debt Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.01. COMPANY MAY CONSOLIDATE, ETC. Nothing contained in
this Indenture or in any of the Debt Securities shall prevent any consolidation
or merger of the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive consolidations or
mergers in which the Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of
the property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; PROVIDED, HOWEVER, the Company hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment of the principal of (premium,
if any) and interest on all of the Debt Securities of all series in accordance
with the terms of each series, according to their
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tenor and the due and punctual performance and observance of all the covenants
and conditions of this Indenture with respect to each series or established with
respect to such series pursuant to Section 2.01 to be performed or observed by
the Company, shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company shall have been
merged, or by the entity which shall have acquired such property.
SECTION 10.02. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Debt Securities of all
series Outstanding and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture or established with respect to
each series of the Debt Securities pursuant to Section 2.01 to be performed or
observed by the Company with respect to each series, such successor corporation
shall succeed to and be substituted for the Company with the same effect as if
it had been named as the Company herein.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Debt Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debt
Securities shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other Person
(whether or not affiliated with the Company).
SECTION 10.03. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. The
Trustee, subject to the provisions of Section 7.01, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply with
the provisions of this Article.
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ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE. If at any
time: (a) the Company shall have delivered to the Trustee for cancellation all
Debt Securities of a series theretofore authenticated (other than any Debt
Securities that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.07) and Debt Securities for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Company(and thereupon repaid to the
Company or discharged from such trust, as provided in Section 11.05); or (b) all
such Debt Securities of a particular series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at maturity or
upon redemption all Debt Securities of that series not theretofore delivered to
the Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to be
paid all other sums payable hereunder with respect to such series by the
Company; then if the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable United States federal income
tax law, in either case to the effect that, and such opinion shall confirm that,
the holders of the Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred, this Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections 2.03, 2.05, 2.07,
4.01, 4.02, 4.03 and 7.10, which shall survive until the date of maturity or
redemption date, as the case may be, and Sections 7.06 and 11.05, which shall
survive to such date and thereafter, and the Trustee, on demand of the Company
and at the
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cost and expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
SECTION 11.02. DISCHARGE OF OBLIGATIONS. If at any time all Debt
Securities of a particular series not theretofore delivered to the Trustee for
cancellation or that have not become due and payable as described in Section
11.01 shall have been paid by the Company by depositing irrevocably with the
Trustee as trust funds moneys or an amount of Governmental Obligations
sufficient to pay at maturity or upon redemption all such Debt Securities of
that series not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company with respect to such series, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with the Trustee
then, if the Company has delivered to the Trustee an Opinion of Counsel based on
the fact that (x) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (y) since the date hereof, there has
been a change in the applicable United States federal income tax law, in either
case to the effect that, and such opinion shall confirm that, the holders of the
Debt Securities of such series will not recognize income, gain or loss for
United States federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to United States federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred, the
obligations of the Company, under this Indenture with respect to such series
shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof which shall survive
until such Debt Securities shall mature and be paid and Sections 7.06 and 11.05,
which shall survive to such date and thereafter.
SECTION 11.03. DEPOSITED MONEYS TO BE HELD IN TRUST. All moneys or
Governmental Obligations deposited with the Trustee pursuant to Section 11.02
shall be held in trust and shall be available for payment as due, either
directly or through any paying agent (including the Company acting as its own
paying agent), to the holders of the particular series of Debt Securities for
the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.
SECTION 11.04. PAYMENT OF MONEYS HELD BY PAYING AGENTS. In
connection with the satisfaction and discharge of this Indenture, all moneys or
Governmental Obligations then held
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by any paying agent under the provisions of this Indenture shall, upon demand of
the Company, be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys or Governmental
Obligations.
SECTION 11.05. REPAYMENT TO COMPANY. Any moneys or Governmental
Obligations deposited with any paying agent or the Trustee, or then held by the
Company, in trust for payment of principal of or premium or interest on the Debt
Securities of a particular series that are not applied but remain unclaimed by
the holders of such Debt Securities for at least two years after the date upon
which the principal of (and premium, if any) or interest on such Debt Securities
shall have respectively become due and payable, shall be repaid to the Company
on May 31 of each year or (if then held by the Company) shall be discharged from
such trust; and thereupon the paying agent and the Trustee shall be released
from all further liability with respect to such moneys or Governmental
Obligations, and the holder of any of the Debt Securities entitled to receive
such payment shall thereafter, as an unsecured general creditor, look only to
the Company for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01. NO RECOURSE. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debt Security, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past, present or
future as such, of the Company or of any predecessor or successor corporation,
either directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debt Securities or implied
therefrom; and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, every such
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incorporator, stockholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Debt
Securities or implied therefrom, are hereby expressly waived and released as a
condition of, and as consideration for, the execution of this Indenture and the
issuance of such Debt Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. EFFECT ON SUCCESSORS AND ASSIGNS. All the covenants,
stipulations, promises and agreements in this Indenture contained by or on
behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 13.02. ACTIONS BY SUCCESSOR. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board, committee or
officer of any corporation that shall at the time be the lawful successor of the
Company.
SECTION 13.03. SURRENDER OF COMPANY POWERS. The Company by
instrument in writing executed by authority of 2/3 (two-thirds) of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company, and thereupon such power so surrendered shall terminate both as
to the Company and as to any successor corporation.
SECTION 13.04. NOTICES. Except as otherwise expressly provided
herein, any notice or demand that by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the holders of Debt
Securities to or on the Company may be given or served by being deposited first
class postage prepaid in a post-office letterbox addressed (until another
address is filed in writing by the Company with the Trustee), as follows:
Kansas City Power & Light Company, 1201 Walnut, Kansas City, MO 64106-2124,
Attention: Treasurer. Any notice, election, request or demand by the Company
or any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.
SECTION 13.05. GOVERNING LAW. This Indenture and each Debt Security
shall be deemed to be a contract made under the
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internal laws of the State of New York, and for all purposes shall be construed
in accordance with the laws of said State.
SECTION 13.06. TREATMENT OF THE DEBT SECURITIES AS DEBT. It is
intended that the Debt Securities will be treated as indebtedness and not as
equity for federal income tax purposes. The provisions of this Indenture shall
be interpreted to further this intention.
SECTION 13.07. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such Person, such Person has made
such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
SECTION 13.08. PAYMENTS ON BUSINESS DAYS. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an
Officers' Certificate, or established in one or more indentures supplemental to
this Indenture, in any case where the date of maturity of interest or principal
of any Debt Security or the date of redemption of any Debt Security shall not be
a Business Day, then payment of interest or principal (and premium, if any) may
be made on the next succeeding Business Day with the same force and effect as if
made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
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SECTION 13.09. CONFLICT WITH TRUST INDENTURE ACT. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 13.10. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 13.11. SEPARABILITY. In case any one or more of the
provisions contained in this Indenture or in the Debt Securities of any series
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Indenture or of such Debt Securities, but this Indenture
and such Debt Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 13.12. ASSIGNMENT. The Company will have the right at all
times to assign any of its respective rights or obligations under this Indenture
to a direct or indirect wholly-owned Subsidiary of the Company, PROVIDED THAT,
in the event of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties hereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.13. ACKNOWLEDGMENT OF RIGHTS. The Company acknowledges
that, with respect to any Debt Securities held by a Trust or a trustee of such
Trust, if the Property Trustee of such Trust fails to enforce its rights under
this Indenture as the holder of the series of Debt Securities held as the assets
of such Trust, any holder of Preferred Securities may, after a period of 30 days
has elapsed from such holder's written request to such Property Trustee to
enforce such rights, institute legal proceedings directly against the Company to
enforce such Property Trustee's rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
person or entity.
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ARTICLE XIV
SUBORDINATION OF DEBT SECURITIES
SECTION 14.01. SUBORDINATION TERMS. The payment by the Company of
the principal of, premium, if any, and interest on any series of Debt Securities
issued hereunder shall be subordinated to the extent set forth in an indenture
supplemental hereto relating to such Debt Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
KANSAS CITY POWER & LIGHT COMPANY
By: /s/ B. J. Beaudoin
Name: Bernard J. Beaudoin
Title: Executive Vice President -
Chief Financial Officer
Attest:
By: /s/ Jeanie S. Latz
Jeanie S. Latz
Secretary
THE FIRST NATIONAL BANK OF CHICAGO
Not in its individual capacity but solely as
Trustee
By: /s/ John R. Prendiville
Name: John R. Prendiville
Title: Vice President
Attest:
By: /s/ Katherine Cokic
Name: Katherine Cokic
Title: Assistant-Vice President
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STATE OF MISSOURI)
COUNTY OF JACKSON) SS
On the 15th day of April, 1997, before me personally came Bernard Beaudoin to me
known, who, being by me duly sworn, did depose and say that he is a Executive
Vice Pres. of KANSAS CITY POWER & LIGHT COMPANY, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
NOTARY PUBLIC Carol Sivils, Notary Public
State of Missouri, Commissioned in Clay
County
[seal] Commission expires: June 15, 1999
STATE OF ILLINOIS )
COUNTY OF COOK ) SS
On the ___ day of April, 1997, before me personally came John R. Prendiville to
me known, who, being by me duly sworn, did depose and say that he is a
Vice President of THE FIRST NATIONAL BANK OF CHICAGO, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC Nilda Sierra
Notary Public, State of Illinois
[seal] Commission expires: 11/12/97
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FIRST SUPPLEMENTAL INDENTURE
Dated as of April 1, 1997
Between
KANSAS CITY POWER & LIGHT COMPANY
and
THE FIRST NATIONAL BANK OF CHICAGO
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ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS..............................................2
SECTION 1.2. INTERPRETATION...................................................3
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.................................4
SECTION 2.2. MATURITY.........................................................4
SECTION 2.3. FORM AND PAYMENT.................................................4
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE....................................4
SECTION 2.5. INTEREST.........................................................5
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION.............................................7
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY...................................7
SECTION 3.3. NO SINKING FUND..................................................8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.............................8
SECTION 4.2. NOTICE OF EXTENSION..............................................9
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.............................................10
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE........................................11
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS..................................11
SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY............................12
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SECTION 6.4. SUBROGATION.....................................................13
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION.............................15
SECTION 6.6. NOTICE BY THE COMPANY...........................................15
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS...................................................16
SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED...............................16
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE.............................................17
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE..................................17
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES.......................27
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE......................................27
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS...........................27
SECTION 10.3. GOVERNING LAW..................................................27
SECTION 10.4. SEPARABILITY...................................................27
SECTION 10.5. COUNTERPARTS...................................................28
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of April ___, 1997
(the "FIRST SUPPLEMENTAL INDENTURE"), between Kansas City Power & Light
Company, a Missouri corporation (the "Company"), and The First National
Bank of Chicago, a national banking association, duly organized and
existing under the laws of the United States as trustee (the "Trustee")
under the Indenture dated as of April 1, 1997 between the Company and the
Trustee (the "Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Debt Securities to be
known as its 8.3% Junior Subordinated Deferrable Interest Debentures due March
31, 2037 (the "Subordinated Debentures"), the form and substance of which and
the terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this First Supplemental Indenture; and
WHEREAS, KCPL Financing I, a Delaware statutory business trust (the
"Trust"), has offered to the public $150,000,000 aggregate stated liquidation
amount of its Trust Originated Preferred Securities (the "Preferred Securities")
and has offered to the Company $4,640,000 aggregate stated liquidation amount of
its Trust Originated Common Securities (the "Common Securities"), such Preferred
Securities and Common Securities representing undivided beneficial interests in
the assets of the Trust, and proposes to invest the proceeds from such offering
in $154,640,000 aggregate principal amount of the Subordinated Debentures; and
WHEREAS, the Company has requested the Trustee to execute and deliver
this First Supplemental Indenture, and all requirements necessary to make this
First Supplemental Indenture a valid instrument, in accordance with its terms,
and to make the Subordinated Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
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NOW, THEREFORE, in consideration of the purchase and acceptance of the
Subordinated Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Subordinated
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture; (b) a term defined anywhere in this First
Supplemental Indenture has the same meaning throughout; and (c) the following
terms have the meanings given to them in the Declaration: (i) Clearing Agency;
(ii) Delaware Trustee; (iii) Redemption Tax Opinion; (iv) Preferred Security
Certificate; (v) Property Trustee; (vi) Pro Rata; (vii) Regular Trustees; and
(viii) Tax Event.
In addition, the following terms have the following respective
meanings:
DECLARATION:
The term "Declaration" shall mean the Amended and Restated Declaration
of Trust of KCPL Financing I, a Delaware business trust, dated as of April 15,
1997.
MATURITY DATE:
The term "Maturity Date" shall mean the date on which the Subordinated
Debentures mature and on which the principal shall be due and payable together
with all accrued and unpaid interest thereon including Compounded Interest (as
defined in Section 4.1) and Additional Interest (as defined in Section 2.5(c)),
if any.
SENIOR INDEBTEDNESS:
The term "Senior Indebtedness" shall mean (i) any payment in respect
of (A) indebtedness of the Company for money borrowed and (B) indebtedness
evidenced by securities, debentures, bonds, notes or other similar instruments
issued by the Company including, without limitation, indebtedness evidenced by
securities issued pursuant to the General Mortgage Indenture
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and Deed of Trust dated as of December 1, 1986, from the Company to United
Missouri Bank of Kansas City, N.A., as trustee, as supplemented and amended from
time to time; and the Indentures dated as of April 1, 1991, February 15, 1992,
November 15, 1992, November 1, 1994 and December 1, 1994, between the Company
and The Bank of New York, as trustee; (ii) all capital lease obligations of the
Company; (iii) all obligations of the Company issued or assumed as the deferred
purchase price of property, all conditional sale obligations of the Company and
all of its obligations under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business); (iv) all
obligations of the Company for reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) of other Persons
for the payment of which the Company is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the Company),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Subordinated Debentures, as the case may be, including all
other debt securities and guarantees in respect of those debt securities, issued
to any other trusts, partnerships or any other entity affiliated with the
Company which is a financing vehicle of the Company ("Financing Entity") in
connection with an issuance of preferred securities by such Financing Entity or
other securities which rank pari passu with, or junior to, the Preferred
Securities, and (2) any indebtedness between or among the Company and its
Affiliates.
SECTION 1.2. INTERPRETATION. Each definition in this First
Supplemental Indenture includes the singular and the plural, and references to
the neuter gender include the masculine and feminine where appropriate. Terms
which relate to accounting matters shall be interpreted in accordance with
generally accepted accounting principles in effect from time to time.
References to any statute mean such statute as amended at the time and include
any successor legislation. The word "or" is not exclusive, and the words
"herein," "hereof" and "hereunder" refer to this First Supplemental Indenture as
a whole. The headings to the Articles and Sections are for convenience of
reference and shall not affect the meaning or interpretation of this First
Supplemental Indenture. References to Articles and Sections mean the Articles
and Sections of this First Supplemental Indenture unless otherwise specified.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT. There is hereby
authorized a series of Debt Securities designated the "8.3% Junior Subordinated
Deferrable Interest Debentures due March 31, 2037," limited in aggregate
principal amount to $154,640,000, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of such Debt
Securities pursuant to Section 2.04 of the Indenture.
SECTION 2.2. MATURITY. The Maturity Date will be March 31, 2037,
provided that the Company may at its option change the Maturity Date to an
earlier date not earlier than March 31, 2002, and shall give notice of any such
change to the Trustee not later than 120 days prior to such changed Maturity
Date, and give prompt notice of such change to the holders of the Subordinated
Debentures.
SECTION 2.3. FORM AND PAYMENT. Except as provided in Section 2.4,
the Subordinated Debentures shall be issued in fully registered certificated
form without interest coupons. Principal and interest on the Subordinated
Debentures issued in certificated form will be payable, the transfer of such
Subordinated Debentures will be registrable and such Subordinated Debentures
will be exchangeable for Subordinated Debentures bearing identical terms and
provisions at the office or agency of the Trustee in Chicago, Illinois,
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall appear
in the Security Register. Notwithstanding the foregoing, so long as the
registered holder of any Subordinated Debentures is the Property Trustee, the
payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such Subordinated Debentures held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE. In connection with the
dissolution of the Trust:
(a) the Subordinated Debentures in certificated form may be presented
to the Trustee by the Property Trustee in exchange for a Global Security in
an aggregate principal amount equal to the aggregate principal amount of the
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Subordinated Debentures so presented, to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant to
the instructions of the Regular Trustees. The Company, upon any such
presentation, shall execute a Global Security in such aggregate principal
amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this First Supplemental
Indenture. Payments on the Subordinated Debentures issued as a Global
security will be made to the Depositary; and
(b) if any Preferred Securities are held in non book-entry
certificated form, the Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Preferred Security
Certificate which represents Preferred Securities other than Preferred
Securities held by the Clearing Agency or its nominee ("Non Book-Entry
Preferred Securities") will be deemed to represent beneficial interests in
Subordinated Debentures presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate stated
liquidation amount of the Non Book-Entry Preferred Securities until such
Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates
will be cancelled and a Subordinated Debenture, registered in the name of
the holder of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate stated liquidation amount
of the Preferred Security Certificate cancelled, will be executed by the
Company and delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this First Supplemental Indenture. On
issue of such Subordinated Debentures, Subordinated Debentures with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been cancelled.
SECTION 2.5. INTEREST.
(a) Each Subordinated Debenture will bear interest at the rate of
8.3% per annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of
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Article IV) quarterly in arrears on March 31, June 30, September 30 and December
31 of each year (each, an "Interest Payment Date"), commencing on June 30, 1997,
to the Person in whose name such Subordinated Debenture or any predecessor
Subordinated Debenture is registered, at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the Business Day next preceding that Interest Payment Date. If pursuant to
the provisions of Section 2.11(c) of the Indenture the Subordinated Debentures
are no longer represented by a Global Security, the Company may select a regular
record date for such interest installment which shall be any date at least
fifteen days before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Subordinated Debentures is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed on the basis
of the actual number of days elapsed in such a 90-day quarter.
(c) If at any time while the Property Trustee is the holder of any
Subordinated Debentures, the Trust or the Property Trustee is required to pay
any taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Subordinated Debentures held by the Property
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
taxes, duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other government charges been imposed.
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ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION. If a Tax Event has occurred and
is continuing and the Company has received a Redemption Tax Opinion, then,
notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company shall
have the right upon not less than 30 days' nor more than 60 days' notice to the
registered holders of the Subordinated Debentures to redeem the Subordinated
Debentures, in whole but not in part, for cash within 90 days following the
occurrence of such Tax Event (the "90 Day Period") at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price")
PROVIDED THAT, if at the time there is available to the Company the opportunity
to eliminate, within the 90 Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Company, the Trust or the Holders of the Trust Securities issued by the Trust,
the Company shall pursue such Ministerial Action in lieu of redemption; and
PROVIDED FURTHER, that the Company shall have no right to redeem the
Subordinated Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration. The Redemption Price shall
be paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines and specifies in the notice of
redemption, provided the Company shall deposit with the Trustee an amount
sufficient to pay the Special Redemption Price by 11:00 a.m. on the date such
Redemption Price is to be paid.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Article III of the Indenture and to
Section 3.2(b), the Company shall have the right to redeem the Subordinated
Debentures, in whole or in part, from time to time, on or after March 31, 2002,
at the Redemption Price. Any redemption pursuant to this paragraph will be made
upon not less than 30 days' nor more than 60 days' notice to the registered
holder of the Subordinated Debentures, at the Redemption Price. If the
Subordinated Debentures are only partially redeemed pursuant to this Section
3.2, the Subordinated Debentures will be redeemed pro rata or by lot or by any
other method utilized by the Trustee; PROVIDED, that if at the time of
redemption, the Subordinated Debentures are registered as a Global Security, the
Depositary shall determine by lot the
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principal amount of such Subordinated Debentures held by each holder to be
redeemed. The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or at such earlier time as the Company
determines and specifies in the notice of redemption, provided the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price by
11:00 a.m. on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Subordinated Debentures would
result in the delisting of the Preferred Securities issued by the Trust from any
national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Subordinated Debentures in whole.
SECTION 3.3. NO SINKING FUND. The Subordinated Debentures are not
entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. The Company shall
have the right, at any time and from time to time during the term of the
Subordinated Debentures, to extend the interest payment period of such
Subordinated Debentures for up to twenty (20) consecutive quarters (the
"Extended Interest Payment Period"); provided, that, during any such Extended
Interest Payment Period, (a) the Company may not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of Company common stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligation of the Company (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of Company capital stock or
the exchange or conversion of one class or series of Company capital stock for
another class or series of Company capital stock or (iii) the purchase of
fractional interests in shares of Company capital stock pursuant to the
conversion or exchange provisions of such Company capital stock or the security
being converted or exchanged), (b) the Company may not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company
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which rank PARI PASSU with or junior to the Subordinated Debentures to which
such Extended Interest Payment Period applies and (c) the Company may not make
any guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee). To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest
compounded quarterly at the Coupon Rate for each quarter of the Extended
Interest Payment Period ("Compounded Interest"). At the end of the Extended
Interest Payment Period, the Company shall pay all interest accrued and unpaid
on the Subordinated Debentures, including any Compounded Interest and Additional
Interest ("Deferred Interest") which shall be payable to the holders of the
Subordinated Debentures in whose names the Subordinated Debentures are
registered in the Security Register on the first record date after the end of
the Extended Interest Payment Period. Prior to the termination of any Extended
Interest Payment Period, the Company may further extend such period, PROVIDED
that such period together with all such further extensions thereof shall not
exceed twenty (20) consecutive quarters or extend beyond the maturity of the
Subordinated Debentures. Upon the termination of any Extended Interest Payment
Period and upon the payment of all Deferred Interest then due, the Company may
select a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to both the Regular
Trustees and the Property Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record or
payment date for such Distributions to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the Subordinated
Debentures and the Trustee written
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notice of its selection of such Extended Interest Payment Period ten (10)
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Subordinated
Debentures, but in any event at least two Business Days before such record date.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the twenty quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES. In connection with the offering,
sale and issuance of the Subordinated Debentures to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company
shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Subordinated Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets); and
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(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each holder of Subordinated Debentures issued hereunder by such
holder's acceptance thereof likewise covenants and agrees, that all Subordinated
Debentures shall be issued subject to the provisions of this Article VI; and
each holder of a Subordinated Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Subordinated Debentures issued hereunder shall, to the extent
and in the manner hereinafter set forth, be subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of this First Supplemental Indenture or
thereafter incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness of the
Company, or in the event that the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or premium, if any, or interest on the
Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder of Subordinated Debentures when such
payment is prohibited by the preceding paragraph of this Section 6.2, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness
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may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal (and premium, if any) or interest on the Subordinated
Debentures; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Subordinated Debentures or the Trustee would be
entitled to receive from the Company, except for the provisions of this Article
VI, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the holders of the Subordinated Debentures or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of Subordinated Debentures or to
the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Subordinated Debentures before all Senior
Indebtedness of the Company is paid in full, or provision is made for such
payment in money in accordance with its terms, such payment or distribution
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<PAGE>
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness of the Company remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article VI with respect
to the Subordinated Debentures to the payment of all Senior Indebtedness of the
Company that may at the time be outstanding, PROVIDED that (i) such Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article X of the Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 6.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article X of the Indenture. Nothing in Section 6.2 or in this Section 6.3
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.06 of the Indenture.
SECTION 6.4. SUBROGATION. Subject to the payment in full of all
Senior Indebtedness of the Company, the rights of the holders of the
Subordinated Debentures shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to such Senior Indebtedness until the
principal of (and premium, if any) and interest on the Subordinated Debentures
shall be paid in full; and, for the
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purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
holders of the Subordinated Debentures or the Trustee would be entitled except
for the provisions of this Article VI, and no payment over pursuant to the
provisions of this Article VI, to or for the benefit of the holders of such
Senior Indebtedness by holders of the Subordinated Debentures or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness of the Company, and the holders of the Subordinated Debentures be
deemed to be a payment by the Company to or on account of such Senior
Indebtedness. It is understood that the provisions of this Article VI are and
are intended solely for the purposes of defining the relative rights of the
holders of the Subordinated Debentures, on the one hand, and the holders of such
Senior Indebtedness on the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture or
in the Subordinated Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Subordinated Debentures, the obligation of the
Company which is absolute and unconditional, to pay to the holders of the
Subordinated Debentures the principal of (and premium, if any) and interest on
the Subordinated Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Subordinated Debentures and creditors of the
Company, other than the holders of Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Trustee or the holder of any Subordinated
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article VI of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the holders of the Subordinated Debentures, shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidation trustee, agent or other Person making such payment or distribution,
delivered to the Trustee or to the holders of the Subordinated Debentures, for
the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable
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thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article VI.
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION. Each holder of a
Subordinated Debenture by such holder's acceptance thereof authorizes and
directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee such holder's attorney-in-fact for any and
all such purposes.
SECTION 6.6. NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Subordinated Debentures pursuant to the provisions of
this Article VI. Notwithstanding the provisions of this Article VI or any other
provision of the Indenture and this First Supplemental Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Subordinated Debentures pursuant to the provisions of this Article VI unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Principal Office of the Trustee from the Company or a
holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.01 of the Indenture, shall be entitled in all respects
to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 6.6 at least two
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (or premium, if any) or interest on any Subordinated
Debenture), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior indebtedness or a trustee on behalf of
any such holder or holders. In the event that the
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Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article VI in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article VI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 7.01 of the Indenture, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to holders of Subordinated Debentures, the Company or any other Person
money or assets to which any holder of such Senior Indebtedness shall be
entitled by virtue of this Article VI or otherwise.
SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED. No right of any
present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of the Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the
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Company may, at any time and from time to time, without the consent of or notice
to the Trustee or the holders of the Subordinated Debentures, without incurring
responsibility to the holders of the Subordinated Debentures and without
impairing or releasing the subordination provided in this Article VI or the
obligations hereunder of the holders of the Subordinated Debentures to the
holders of such Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in
any manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE. If the Subordinated Debentures are
to be issued as a Global Security in connection with the distribution of the
Subordinated Debentures to the holders of the Preferred Securities issued by the
Trust upon the dissolution of the Trust, the Company will use its best efforts
to list such Subordinated Debentures on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. The Subordinated
Debentures and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:
(FORM OF FACE OF SUBORDINATED DEBENTURE)
[IF THE SUBORDINATED DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT:
This Subordinated Debenture is a Global Security within the meaning of the
Indenture hereinafter referred
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<PAGE>
to and is registered in the name of a Depository or a nominee of a Depositary.
This Subordinated Debenture is exchangeable for Subordinated Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Subordinated Debenture (other than a transfer of this Subordinated Debenture as
a whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Subordinated Debenture issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
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No. $
CUSIP No.
KANSAS CITY POWER & LIGHT COMPANY
8.3% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE MARCH 31, 2037
KANSAS CITY POWER & LIGHT COMPANY, a Missouri corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to _______
or registered assigns, the principal sum of ____________ Dollars on March 31,
2037, or such earlier date established by the Company not earlier than March 31,
2002, and to pay interest on said principal sum from April 15, 1997 or from the
most recent interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30 and
December 31 of each year commencing, June 30, 1997, at the rate of 8.3% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest compounded quarterly at the same rate per annum.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on this Subordinated Debenture is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Subordinated Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the regular record date for such interest installment [which
shall be the close of business on the Business Day next preceding such Interest
Payment Date.] [IF PURSUANT TO THE PROVISIONS OF Section 2.11(C) OF THE
INDENTURE THE SUBORDINATED DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL
SECURITY -- which shall be the
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close of business on the ________ day preceding such Interest Payment Date.] Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such regular record
date, and may be paid to the Person in whose name this Subordinated Debenture
(or one or more Predecessor Securities) is registered at the close of business
on a special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
this series of Subordinated Debentures not less than ten (10) days prior to such
special record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Subordinated Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Subordinated Debenture shall be
payable at the office or agency of the Trustee maintained for that purpose in
Chicago, Illinois, in any coin or currency of the United States of America which
at the time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall appear
in the Security Register. Notwithstanding the foregoing, so long as the holder
of this Subordinated Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Subordinated Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Subordinated Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Subordinated
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each holder of this Subordinated Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on behalf of such holder to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee the attorney-in-fact of such holder for any and all such
purposes. Each holder hereof, by acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
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This Subordinated Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed by
or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by
the Trustee referred to on the reverse side hereof, this Subordinated Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Subordinated Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
KANSAS CITY POWER & LIGHT COMPANY
By
[Title]
Attest:
By
Secretary
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<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debentures of the series of Subordinated
Debentures described in the within-mentioned Indenture.
THE FIRST NATIONAL BANK _______________________
OF CHICAGO, as Authentication Agent
Not in Its Individual
Capacity But Solely
as Trustee
By By
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF SUBORDINATED DEBENTURE)
This Subordinated Debenture is one of a duly authorized series of
Subordinated Debentures of the Company (herein sometimes referred to as the
"Subordinated Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
April 1, 1997, duly executed and delivered between the Company and The First
National Bank of Chicago, not in its individual capacity but solely as trustee
(the "Trustee"), as supplemented by the First Supplemental Indenture dated as of
April 1, 1997 between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Subordinated Debentures. By the
terms of the Indenture, the Subordinated Debentures are issuable in series which
may vary as to amount, date of maturity, rate of interest and in other respects
as in the Indenture provided. This series of Subordinated Debentures is limited
in aggregate principal amount as specified in said First Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event, in certain
circumstances this Subordinated Debenture will become due and payable at the
principal amount together with any interest accrued thereon (the "Redemption
Price"). The Redemption Price shall be paid prior to 12:00 noon, New York time,
on the date of
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such redemption or at such earlier time as the Company determines. The Company
shall have the right to redeem this Subordinated Debenture at the option of the
Company, without premium or penalty, in whole or in part at any time on or after
March 31, 2002 (an "Optional Redemption"), at the Redemption Price. Any
Optional Redemption pursuant to this paragraph will be made upon not less than
30 days' nor more than 60 days' notice, at the Redemption Price. If the
Subordinated Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Subordinated Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee; PROVIDED that if at the
time of redemption, the Subordinated Debentures are registered as a Global
Security, the Depositary shall determine by lot the principal amount of such
Subordinated Debentures held by each holder to be redeemed.
In the event of redemption of this Subordinated Debenture in part
only, a new Subordinated Debenture or Subordinated Debentures of this series for
the unredeemed portion hereof will be issued in the name of the holder hereof
upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Subordinated Debentures of each series
affected at the time Outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Subordinated Debentures; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Subordinated Debentures of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Subordinated
Debenture so affected or (ii) reduce the aforesaid percentage of Subordinated
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Subordinated
Debenture then outstanding
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<PAGE>
and affected thereby. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Subordinated
Debentures of any series at the time outstanding affected thereby, on behalf of
all of the holders of the Subordinated Debentures of such series, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Subordinated Debentures of such
series. Any such consent or waiver by the registered holder of this
Subordinated Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Subordinated Debenture and of any Subordinated Debenture issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Subordinated Debenture.
No reference herein to the Indenture and no provision of this
Subordinated Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Subordinated Debenture at the time and
place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Subordinated Debentures, from time to time to extend the interest payment period
of such Subordinated Debentures for up to twenty (20) consecutive quarters (an
"Extended Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Subordinated Debentures to the extent that payment
of such interest is enforceable under applicable law). Before the termination
of any such Extended Interest Payment Period, the Company may further extend
such Extended Interest Payment Period, PROVIDED that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed twenty (20) consecutive quarters or extend beyond the maturity of the
Subordinated Debentures. At the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may select a new Extended Interest
Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Subordinated Debenture is transferable by the registered
holder hereof on the Security Register of the Company, upon surrender of this
Subordinated
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<PAGE>
Debenture for registration of transfer at the office or agency of the Trustee in
Chicago, Illinois, accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or the attorney of such holder duly authorized in
writing, and thereupon one or more new Subordinated Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Subordinated Debenture, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[The Subordinated Debentures of this series are issuable only in
registered form without coupons in denominations of $25 and any integral
multiple thereof.] [This Global Security is exchangeable for Subordinated
Debentures in definitive form only under certain limited circumstances set forth
in the Indenture. Subordinated Debentures of this series so issued are issuable
only in registered form without coupons in denominations of $25 and any integral
multiple thereof.] As provided in the Indenture and subject to certain
limitations [herein and] therein set forth, Subordinated Debentures of this
series [so issued] are exchangeable for a like aggregate principal amount of
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Subordinated Debentures of this series of a different authorized denomination,
as requested by the holder surrendering the same.
All terms used in this Subordinated Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES. Subordinated
Debentures in the aggregate principal amount of $154,640,000 may, upon execution
of this First Supplemental Indenture, be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Subordinated Debentures to or upon the written order of the
Company, signed by its Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE. The Indenture, as
supplemented by this First Supplemental Indenture, is in all respects ratified
and confirmed, and this First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 10.3. GOVERNING LAW. This First Supplemental Indenture and
each Subordinated Debenture shall be deemed to be a contract made under the
internal laws of the State of New York, and for all purposes shall be construed
in accordance with the laws of said State.
SECTION 10.4. SEPARABILITY. In case any one or more of the
provisions contained in this First Supplemental Indenture
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or in the Subordinated Debentures shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Subordinated Debentures, but this First
Supplemental Indenture and the Subordinated Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 10.5. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
KANSAS CITY POWER & LIGHT COMPANY
By:/s/ B. J. Beaudoin
Name: Bernard J. Beaudoin
Title: Executive Vice President -
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ Jeanie Sell Latz
Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Trustee
By:/s/ John R. Prendiville
Title: Vice President
Name: John R. Prendiville
[Corporate Seal]
Attest:
/s/ Katherine Cokic
Title: Assistant-Vice President
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STATE OF MISSOURI )
COUNTY OF JACKSON ) ss:
On the 15th day of April, 1997, before me personally came
Bernard Beaudoin, to me known, who, being by me duly sworn, did depose and say
that he is a Exec Vic Pres. of KANSAS CITY POWER & LIGHT COMPANY, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC Carol A. Baxter,
Notary Public-Notary Seal
State of Missouri, Clay County
[seal] Commission expires: Mar 18, 2001
STATE OF ILLINOIS )
COUNTY OF COOK ):
On the day of April, 1997, before me personally came John R.
Prendiville, to me known, who, being by me duly sworn, did depose and say that
he is the Vice President of THE FIRST NATIONAL BANK OF CHICAGO, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC Nilda Sierra - Notary Public
State of Missouri
[seal] Commission expires: 11/12/97
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PREFERRED SECURITIES GUARANTEE AGREEMENT
KCPL Financing I
Dated as of April 15, 1997
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions......................................................1
Section 1.2. Interpretation...................................................5
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.................................5
Section 2.2. Lists of Holders of Preferred Securities.........................6
Section 2.3. Reports by the Guarantee Trustee.................................6
Section 2.4. Periodic Reports to Guarantee Trustee............................6
Section 2.5. Evidence of Compliance with Conditions Precedent.................6
Section 2.6. Events of Default; Waiver........................................6
Section 2.7. Events of Default; Notice........................................7
Section 2.8. Conflicting Interests............................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.......................7
Section 3.2. Certain Rights of Guarantee Trustee..............................9
Section 3.3. Not Responsible for Recitals or Issuance of
Guarantee......................................................11
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility..................................12
Section 4.2. Appointment, Removal and Resignation of Guarantee
Trustee........................................................13
ARTICLE V
GUARANTEE
Section 5.1. Guarantee.......................................................13
Section 5.2. Waiver of Notice and Demand.....................................13
Section 5.3. Obligations Not Affected........................................13
Section 5.4. Rights of Holders...............................................15
Section 5.5. Guarantee of Payment............................................15
Section 5.6. Subrogation.....................................................15
Section 5.7. Independent Obligations.........................................15
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transaction.......................................16
Section 6.2. Ranking.........................................................16
ARTICLE VII
TERMINATION
Section 7.1. Termination.....................................................17
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation.....................................................17
Section 8.2. Indemnification.................................................17
ARTICLE IX
SUCCESSOR CORPORATION
Section 9.01. Guarantor May Consolidate, Etc.................................18
Section 9.02. Successor Corporation Substituted..............................19
Section 9.03. Evidence of Consolidation, Etc. to Trustee.....................19
ARTICLE X
MISCELLANEOUS
Section 10.1. Successors and Assigns.........................................19
Section 10.2. Amendments.....................................................19
Section 10.3. Notices........................................................19
Section 10.4. Benefit........................................................20
Section 10.5. Governing Law..................................................20
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PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Guarantee
Agreement"), dated as of April 7, 1997, is executed and delivered by KANSAS CITY
POWER & LIGHT COMPANY, a Missouri corporation (the "Guarantor"), and The First
National Bank of Chicago, a national banking association duly organized and
existing under the laws of the United States, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of KCPL Financing I, a Delaware
statutory business trust (the "ISSUER").
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"DECLARATION"), dated as of April 15, 1997, among the trustees of the Issuer,
the Guarantor as Sponsor and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof $150,000,000 aggregate stated liquidation amount of its 8.3% Trust
Originated Preferred Securities (the "Preferred Securities"); and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee Agreement, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS. In this Guarantee Agreement, unless the
context otherwise requires: (a) capitalized terms used in this Guarantee
Agreement 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
Guarantee Agreement has the same meaning throughout; and (c) a term defined in
the Trust Indenture Act has the same meaning when used in this Guarantee
Agreement unless otherwise defined in this Guarantee Agreement or unless the
context otherwise requires.
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AFFILIATE:
The term "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act of 1933 or any successor rule thereunder.
BUSINESS DAY:
The term "Business Day" means any day other than a day on which
banking institutions in Chicago, Illinois or New York, New York are authorized
or required by any applicable law to close.
COMMON SECURITIES:
The term "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
COVERED PERSON:
The term "Covered Person" means any Holder or beneficial owner of
Preferred Securities.
EVENT OF DEFAULT:
The term "Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
GUARANTEE PAYMENTS:
The term "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
the Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Subordinated Debentures to the Holders in
exchange for Preferred Securities as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer (in either case, the "Liquidation Distribution").
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GUARANTEE TRUSTEE:
The term "Guarantee Trustee" means The First National Bank of Chicago,
as trustee under this Guarantee Agreement, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to the terms of
this Guarantee Agreement and thereafter means such Successor Guarantee Trustee.
GUARANTOR:
The term "Guarantor" means Kansas City Power & Light Company, and its
successor or successors by merger, consolidation or purchase of all or
substantially all of its assets.
HOLDER:
The term "Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Preferred Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
INDEMNIFIED PERSON:
The term "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.
INDENTURE:
The term "Indenture" means the Indenture dated as of April 1, 1997,
between the Guarantor (the "Debenture Issuer") and The First National Bank of
Chicago, as trustee, and any amendment thereto and any indenture supplemental
thereto pursuant to which certain unsecured subordinated debt securities of the
Debenture Issuer are to be issued to the Property Trustee of the Issuer.
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or maturity, plus accrued and unpaid Distributions to the date
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upon which the voting percentages are determined) of all Preferred Securities.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each such officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each such officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
PERSON:
The term "Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint stock company, unincorporated
association or government or any agency or political subdivision thereof, or any
other entity of whatever nature.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the
Guarantee Trustee, means the Chairman of the board of directors, the President,
any Vice President, the Secretary, the Treasurer, any trust officer, any
corporate trust officer or any other officer or assistant officer of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the persons who at the time shall be such officers, respectively, or to
whom any corporate trust matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
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SUBORDINATED DEBENTURES:
The term "Subordinated Debentures" means the series of unsecured
subordinated debt securities of the Guarantor designated the 8.3% Junior
Subordinated Deferable Interest Debentures due March 31, 2037 held by the
Property Trustee of the Issuer.
SUCCESSOR GUARANTEE TRUSTEE:
The term "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939.
SECTION 1.2. INTERPRETATION. Each definition in this Guarantee
Agreement includes the singular and the plural, and references to the neuter
gender include the masculine and feminine where appropriate. Terms which relate
to accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Guarantee Agreement as a whole. The headings to the Articles and
Sections are for convenience of reference and shall not affect the meaning or
interpretation of this Guarantee Agreement. References to Articles and Sections
mean the Articles and Sections of this Guarantee Agreement unless otherwise
specified.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
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SECTION 2.2. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee with a list, in
such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of
such date, (i) within ten Business Days after January 1 and June 30 of each
year, and (ii) at any other time, within 30 days of receipt by the Guarantor of
a written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Guarantee Trustee, PROVIDED that the
Guarantor shall not be obligated to provide such List of Holders at any time
when the List of Holders does not differ from the most recent List of Holders
given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year, the Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information
as required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
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SECTION 2.7. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after a Responsible
Officer has knowledge of the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Preferred Securities,
notices of all Events of Default known to the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that the
Guarantee 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 Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the
Declaration shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS. The Declaration shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders of the Preferred Securities, and the Guarantee
Trustee shall not transfer this Guarantee Agreement to any Person except to a
Holder of Preferred Securities exercising the rights of such Holder pursuant to
Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor
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Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders of the Preferred Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of
this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement, and no
implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee 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 Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case of any
such
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certificates or opinions that by any provision hereof are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
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 Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Guarantee 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 Preferred Securities at the time
outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, security or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(iii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel and the
written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee reasonable
security or indemnity against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi) shall,
however, relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement.
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(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, security or other papers or
documents, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit.
(viii) The Guarantee 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 Guarantee 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 Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities,
and the signature of the Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of
the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with
such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee 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 Guarantee
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
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authority available to the Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty
million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
so to act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor
12
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shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the Issuer
may have or assert. The Guarantor's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
13
<PAGE>
SECTION 5.2. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities (other than
an extension of time for payment of Distributions that results from the
extension of any interest payment period on the Subordinated Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
14
<PAGE>
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Guarantee Trustee in respect of
this Guarantee Agreement or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement.
(b) If the Guarantee Trustee fails to enforce this Guarantee
Agreement, any Holder of Preferred Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT. This Guarantee Agreement creates
a guarantee of payment and not of collection.
SECTION 5.6. SUBROGATION. The Guarantor shall be subrogated to all
(if any) rights of the Holders of Preferred Securities against the Issuer in
respect of any amounts paid to such Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any amounts are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred
15
<PAGE>
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTION. So long as any Preferred
Securities remain outstanding, if there shall have occurred an Event of Default
or an event of default under the Declaration, then (a) the Guarantor shall not
declare or pay any dividend on, or make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of
Guarantor common stock in connection with the satisfaction by the Guarantor of
its obligations under any employee benefit plans or any other contractual
obligations of the Guarantor, other than a contractual obligation ranking PARI
PASSU, with or junior to the Subordinated Debentures), (ii) as a result of a
reclassification of Company capital stock or the exchange or conversion of one
class or series of Company capital stock for another class or series of Company
capital stock or (iii) the purchase of fractional interests in shares of Company
capital stock pursuant to the conversion or exchange provisions of such Company
capital stock or the security being converted or exchanged), (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank PARI PASSU with or junior to the Subordinated
Debentures and (c) the Guarantor shall not make any guarantee payments with
respect to the foregoing (other than pursuant to this Guarantee Agreement and
other guarantee agreements entered into by the Guarantor with respect to
preferred securities of any Affiliate of the Guarantor).
SECTION 6.2. RANKING. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Subordinated Debentures, except those liabilities of the Guarantor made PARI
PASSU or subordinate by their terms, (ii) PARI PASSU with the most senior
preferred stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred
securities of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
16
<PAGE>
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION. This Guarantee Agreement shall terminate
upon (i) full payment of the Redemption Price of all Preferred Securities, (ii)
upon the distribution of the Subordinated Debentures to the Holders of all of
the Preferred Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any of Preferred Securities must
restore payment of any sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor 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 in accordance with this Guarantee
Agreement and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement 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 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 Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such Person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Guarantor, 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 Preferred Securities might properly be paid.
SECTION 8.2. INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified
17
<PAGE>
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
ARTICLE IX
SUCCESSOR CORPORATION
SECTION 9.1. GUARANTOR MAY CONSOLIDATE, ETC. Nothing contained in
this Guarantee Agreement shall prevent any consolidation or merger of the
Guarantor with or into any other corporation or corporations (whether or not
affiliated with the Guarantor), or successive consolidations or mergers in which
the Guarantor or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Guarantor or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Guarantor or its successor or successors) authorized to
acquire and operate the same; PROVIDED, HOWEVER, the Guarantor hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment, performance and observance
of all the covenants and conditions of this Guarantee Agreement to be paid,
performed or observed by the Guarantor, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or into
which the Guarantor shall have been merged, or by the entity which shall have
acquired such property.
18
<PAGE>
SECTION 9.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment,
performance and observance of all of the covenants and conditions of this
Guarantee Agreement to be paid, performed or observed by the Guarantor, such
successor corporation shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named as the Guarantor herein.
(b) Nothing contained in this Guarantee Agreement shall prevent the
Guarantor from merging into itself or acquiring by purchase or otherwise all or
any part of the property of any other Person (whether or not affiliated with the
Guarantor).
SECTION 9.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. The
Trustee, subject to the provisions of Section 3.01, may receive an opinion of
counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply with
the provisions of this Article.
ARTICLE IX
MISCELLANEOUS
SECTION 10.1. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding.
SECTION 10.2. AMENDMENTS. Except with respect to any changes that do
not materially adversely affect the rights of Holders (in which case, no consent
of Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of at least 66-2/3% in liquidation amount of
all the outstanding Preferred Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Preferred Securities
apply to the giving of such approval.
SECTION 10.3. NOTICES. All notices provided for in this Guarantee
Agreement 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:
19
<PAGE>
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Preferred Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Treasurer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
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 10.4. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
SECTION 10.5. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
20
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
KANSAS CITY POWER & LIGHT COMPANY
By: /s/ B. J. Beaudoin
Name: Bernard J. Beaudoin
Title: Executive Vice President -
Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO, Not
in its individual capacity but solely as
Guarantee Trustee
By: /s/ John R. Prendiville
Name: John R. Prendiville
Title: Vice President
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