<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 1997
REGISTRATION NO. 333-32821
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CALENERGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2213782
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CALENERGY CAPITAL TRUST IV
(Exact name of registrant as specified in its charter)
DELAWARE [APPLICATION PENDING]
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CALENERGY CAPITAL TRUST V
(Exact name of registrant as specified in its charter)
DELAWARE [APPLICATION PENDING]
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CALENERGY CAPITAL TRUST VI
(Exact name of registrant as specified in its charter)
DELAWARE [APPLICATION PENDING]
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
302 SOUTH 36TH STREET, SUITE 400
OMAHA, NE 68131
(402) 341-4500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
STEVEN A. MCARTHUR, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CALENERGY COMPANY, INC.
302 SOUTH 36TH STREET, SUITE 400
OMAHA, NE 68131
(402) 341-4500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
PETER J. HANLON, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NY 10022-4669
(212) 821-8000
<PAGE>
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|__________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| __________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
<S> <C>
PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM
CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(1)(2) PRICE (2) FEE(2)
------------- ------------- --------- ------
Senior Debt Securities and Subordinated Debt
Securities (collectively, "Debt Securities")
of CalEnergy Company, Inc.(3)..................... - - - -
Preferred Stock of CalEnergy Company, Inc.
("Preferred Stock")(4)............................ - - - -
Common Stock of CalEnergy Company, Inc. ("Common
Stock")(5)........................................ - - - -
Convertible Junior Subordinated Debentures of
CalEnergy Company, Inc. for issuance directly or
to CalEnergy Capital Trust IV, CalEnergy Capital
Trust V and CalEnergy Capital Trust VI ("Junior
Subordinated Debentures")(6)...................... - - - -
Convertible Preferred Securities of CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and
CalEnergy Capital Trust VI ("Convertible Preferred
Securities")(6)................................... - - - -
Guarantees of Convertible Preferred Securities of
CalEnergy Capital Trust IV, CalEnergy Capital
Trust V and CalEnergy Capital Trust VI by
CalEnergy Company, Inc.(7)........................ - - - -
Total............................................. $1,500,000,000 100% - $454,545(8)
===========================================================================================================================
</TABLE>
(1) In no event will the aggregate maximum offering price of all securities
issued, from time to time, pursuant to this Registration Statement exceed
$1,500,000,000. The proposed maximum offering price per unit will be
determined, from time to time, by the Registrants in connection with the
issuance by the Registrants of the securities registered hereunder. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder. The securities may be sold in U.S.
dollars or the equivalent thereof denominated in one or more foreign
currencies or currency units or composite securities.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
Pursuant to Rule 457(o), which permits the registration fee to be
calculated on the basis of the maximum offering price of all the
securities listed, the table does not specify by each class information
as to the amount to be registered, proposed maximum offering price per
unit or proposed maximum aggregate offering price. The proposed maximum
offering price may be omitted pursuant to General Instruction II-D of
Form S-3 under the Securities Act of 1933, as amended.
(3) Such indeterminate amount of Debt Securities as may from time to time be
issued at indeterminate prices or issuable upon conversion of other Debt
Securities or Preferred Stock registered hereunder.
(4) Such indeterminate number of shares of Preferred Stock as may from time
to time be issued at indeterminate prices or issuable upon conversion of
Debt Securities or other class or series of Preferred Stock registered
hereunder. Shares of Preferred Stock may be issued from time to time in
one or more classes or series.
(5) Such indeterminate number of shares of Common Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion of
Debt Securities, Preferred Stock or Convertible Preferred Securities
registered hereunder, as the case may be.
(6) Such indeterminate amount or number of Convertible Junior Subordinated
Debentures of CalEnergy Company, Inc. and Convertible Preferred
Securities of CalEnergy Capital Trust IV, CalEnergy Capital Trust V and
CalEnergy Capital Trust VI as may from time to time be issued at
indeterminate prices. Convertible Junior Subordinated Debentures may be
issued and sold to CalEnergy Capital Trust IV, CalEnergy Capital Trust V
and CalEnergy Capital Trust VI, in which event such Convertible Junior
Subordinated Debentures may later be distributed to the holders of
Convertible Preferred Securities upon a dissolution of CalEnergy Capital
Trust IV CalEnergy Capital Trust V and CalEnergy Capital Trust VI,
respectively, and the distribution of the assets thereof.
(7) Includes the rights of holders of the Convertible Preferred Securities of
CalEnergy Capital Trust IV, CalEnergy Capital Trust V and CalEnergy
Capital Trust VI under the related Guarantee and back-up undertakings,
consisting of obligations by CalEnergy Company, Inc. to provide certain
indemnities in respect of, and pay and be responsible for certain
expenses, costs, liabilities, and debt of, as applicable, CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy Capital Trust
VI and such other obligations of CalEnergy Company, Inc. set forth in the
related
<PAGE>
Amended and Restated Declaration of Trust, the Convertible Junior
Subordinated Debentures Indenture and Supplemental Indentures thereto,
in each case as further described in the Registration Statement. No
separate consideration will be received for any Guarantees of any
back-up undertakings.
(8) Previously paid.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
- -------------------------------------------------------------------------------
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses to be
used in connection with offerings of the following securities:
(1) Debt Securities (consisting of Senior Debt Securities and
Subordinated Debt Securities), Preferred Stock and Common
Stock.
(2) Convertible Preferred Securities of CalEnergy Capital Trust
IV, CalEnergy Capital Trust V and CalEnergy Capital Trust
VI, the Convertible Junior Subordinated Debentures of
CalEnergy Company, Inc. and Guarantees by CalEnergy Company,
Inc. of Convertible Preferred Securities issued by CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy
Capital Trust VI.
Each offering of securities made under this Registration Statement
will be made pursuant to one of these Prospectuses, with the specific terms of
the securities to be offered thereby set forth in an accompanying Prospectus
Supplement.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOME
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
Subject to Completion, dated September 18, 1997
PROSPECTUS
$1,500,000,000
CALENERGY COMPANY, INC.
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
CalEnergy Company, Inc. (the "Company") may from time to time offer,
together or separately, (i) shares of its common stock, par value $.0675 per
share ("Common Stock"), (ii) shares of its preferred stock, no par value
("Preferred Stock"), (iii) senior debt securities ("Senior Debt Securities")
and (iv) subordinated debt securities ("Subordinated Debt Securities" and
together with Senior Debt Securities, the "Debt Securities"). The Common
Stock, the Preferred Stock and the Debt Securities are collectively referred
to herein as the "Securities." The Securities in respect of which this
Prospectus is being delivered (the "Offered Securities") may be offered,
separately or together, in separate series, in amounts, at prices and on terms
to be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
By separate prospectus, the form of which is included in the
Registration Statement of which this Prospectus forms a part, three Delaware
statutory business trusts (individually, a "CalEnergy Trust" and collectively,
the "CalEnergy Trusts"), which are wholly owned subsidiaries of the Company,
may from time to time severally offer preferred securities guaranteed by the
Company to the extent set forth therein and the Company may offer from time to
time junior subordinated debt securities either directly or to a CalEnergy
Trust. The aggregate public offering price of the securities to be offered by
this Prospectus and such other prospectus shall not exceed $1,500,000,000 (or
its equivalent in one or more foreign currencies, currency units or composite
currencies).
Specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in an applicable Prospectus
Supplement, that includes, where applicable, the following: (i) in the case of
Common Stock, the specific designation, number of shares, purchase price and
the rights and privileges thereof, together with any qualifications or
restrictions thereon and any listing on a securities exchange; (ii) in the
case of Preferred Stock, the specific designation, number of shares, purchase
price and the rights, preferences and privileges thereof and any
qualifications or restrictions thereon (including dividends, liquidation
value, voting rights, terms for the redemption, conversion or exchange thereof
and any other specific terms of the Preferred Stock) and any listing on a
securities exchange; and (iii) in the case of the Debt Securities, the
specific designation, aggregate principal amount, authorized denomination,
maturity, premium, or discount, if any, exchangeability, redemption,
conversion, prepayment or sinking fund provisions, if any, interest rate
(which may be fixed or variable), if any, method, if any, of calculating
interest payments and dates for payment thereof, dates on which premium, if
any, will be payable, the right of the Company, if any, to defer payment of
interest on the Debt Securities and the maximum length of such deferral
period, the initial public offering price, any listing on a securities
exchange and other specific terms of the offering. Unless otherwise indicated
in the Prospectus Supplement, the Company does not intend to list any of the
Securities other than the Common Stock on a national securities exchange. Any
Prospectus Supplement relating to any series of Offered Securities will
contain information, where applicable, concerning certain United States
federal income tax considerations for the Offered Securities.
The Common Stock and Preferred Stock and Debt Securities offered
pursuant to this Prospectus may be denominated in U.S. dollars or one or more
foreign currencies, currency units or composite securities to be determined at
or prior to the time of any offering. The Debt Securities offered pursuant to
this Prospectus may consist of bonds, debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms to
be determined at or prior to the time of any such offering. Unless otherwise
disclosed in a Prospectus Supplement, the Company's obligations under the
Senior Debt Securities will be unsecured obligations of the Company ranking
pari passu in right of payment of principal and interest and with all other
existing and future unsecured obligations of the Company. If security for the
Debt Securities is to be provided it will be described in an applicable
Prospectus Supplement. The Company's obligations under the Subordinated Debt
Securities will be subordinated in right of payment to the prior payment in
full of all Senior Debt.
<PAGE>
The Offered Securities may be offered directly, through agents
designated from time to time, to or through dealers or to or through
underwriters. Such agents or underwriters may act alone or with other agents
or underwriters. Any such agents, dealers or underwriters will be set forth in
a Prospectus Supplement. If an agent of the Company, or a dealer or
underwriter, is involved in the offering of the Offered Securities, the
agent's commission, dealer's purchase price, underwriter's discount and net
proceeds to the Company, as the case may be, will be set forth in, or may be
calculated from, the Prospectus Supplement. Any underwriters, dealers or
agents participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN
FACTORS THAT PROSPECTIVE INVESTORS SHOULD CONSIDER PRIOR TO AN INVESTMENT IN
ANY OF THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement. Any statement
contained in this Prospectus will be deemed to be modified or superseded by
any inconsistent statement contained in an accompanying Prospectus Supplement.
The date of this Prospectus is , 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy and information statements and other information filed by the
Company with the SEC can be inspected and copied at the Public Reference
Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC maintains a Web site that contains reports, proxy and
information statements and other materials that are filed through the SEC's
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. This Web
site can be accessed at http://www.sec.gov. Such reports, proxy and
information statements and other information can also be inspected at the
offices of the New York Stock Exchange Inc., 20 Broad Street, New York, New
York 10005.
The Company has filed with the SEC a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the securities offered by
this Prospectus. This Prospectus does not contain all of the information set
forth or incorporated by reference in the Registration Statement and the
exhibits and schedules related thereto, certain portions of which have been
omitted as permitted by the rules and regulations of the SEC. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits
filed or incorporated as a part thereof. Statements contained in this
Prospectus as to the contents of any documents referred to are not necessarily
complete and, in each such instance, are qualified in all respects by
reference to the applicable documents filed with the SEC.
This Prospectus and the periodic filings of the Company under the
Exchange Act contain forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). These
forward-looking statements express the beliefs and expectations of management
regarding the Company's future results and performance.
Such statements are based on current expectation and involve a number
of known and unknown risks and uncertainties that could cause the actual
results, performance and/or other achievements of the Company to differ
materially from any expected future results, performance or achievements,
expressed or implied by the forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements and any such
statement is qualified by reference to the following cautionary statements. In
connection with the safe harbor provisions of the Reform Act, the Company's
management has identified important factors that could cause actual results to
differ materially from management's expectations. Reference is made to the
Company's Current Report on Form 8-K dated February 25, 1997, incorporated
herein by reference. The Company is not required to publicly release any
changes to these forward-looking statements for events occurring after the
date thereof or to reflect any other unanticipated events.
-3-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC (File No. 1-9874) are
incorporated by reference into this Prospectus:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (as amended by the Form 10-K/A filed on April 30, 1997);
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1997 and June 30, 1997;
(iii) the Company's Current Reports on Form 8-K dated December 24,
1996 (as amended by Form 8-K/A dated February 18, 1997), February 25, 1997,
February 26, 1997, March 28, 1997, May 7, 1997, May 19, 1997, July 7, 1997,
July 15, 1997, July 22, 1997, August 6, 1997, August 8, 1997, August 18, 1997,
August 28, 1997, September 9, 1997 and September 16, 1997; and
(iv) the description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed under the Exchange Act and
any amendments or reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates the
termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any other
subsequently filed document which is also incorporated herein by reference,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus except
as so modified or superseded.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated into this Prospectus
by reference, other than exhibits to such documents. Requests for such copies
should be directed to Investor Relations, CalEnergy Company, Inc., 302 South
36th Street, Suite 400, Omaha, Nebraska 68131, telephone number (402)
341-4500.
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in
this Prospectus or a Prospectus Supplement, in connection with the offering
contemplated hereby and thereby, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or any underwriter, dealer or agent. This Prospectus and a Prospectus
Supplement do not constitute an offer to sell or a solicitation of an offer to
buy any Securities other than the Securities to which they relate and do not
constitute an offer to sell or a solicitation of an offer to buy any
Securities in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus or a Prospectus Supplement, nor any sale made hereunder or
thereunder, shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof or
thereof or that the information contained or incorporated by reference herein
or therein is correct as of any time subsequent to such date.
-4-
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the risk factors set
forth below, in addition to the other information appearing in or incorporated
by reference in this Prospectus. This Prospectus contains or incorporates by
reference forward-looking statements which involve risks and uncertainties.
The Company's actual results in the future could differ significantly from the
results discussed or implied in the forward-looking statements. Factors that
could cause or contribute to such a difference include, but are not limited
to, the following risk factors and risk factors described in the documents
incorporated herein by reference. The term "Company" refers to CalEnergy
Company, Inc. and its operating subsidiaries, unless the context otherwise
requires.
ACQUISITIONS. The Company's recent growth has been achieved, in part,
through strategic acquisitions in the energy industry which complement and
diversify the Company's existing business. The Company intends to continue to
pursue an aggressive acquisition strategy for the foreseeable future. The
Company has recently completed several major acquisitions, including the
acquisition of Magma Power Company ("Magma"), Falcon Seaboard Resources, Inc.
("Falcon Seaboard") and Northern Electric plc ("Northern"). The Company has
successfully integrated Magma and Falcon Seaboard and is in the process of
integrating Northern. See "The Company." The Company's ability to pursue
acquisition opportunities successfully will depend on many factors, including,
among others, the Company's ability to (i) identify suitable acquisition
opportunities, (ii) consummate the acquisition, including obtaining any
necessary financing, and (iii) successfully integrate acquired businesses. The
integration of acquired businesses entails numerous risks, including, among
others, the risk of diverting management's attention from the day-to-day
operations of the Company, the risk that the acquired businesses will require
substantial capital and financial investments and the risk that the
investments will fail to perform in accordance with expectations. There can be
no assurance that acquisition opportunities, if any, can be consummated on
favorable terms or that the Company's integration efforts will be successful.
HOLDING COMPANY STRUCTURE. As a holding company, the Company is
dependent on the earnings and cash flows of, and dividends from, its
subsidiaries and joint ventures to generate the funds necessary to meet its
obligations, including the payment of principal, interest and premium, if any,
on the Debt Securities. The availability of distributions from the Company's
subsidiaries and projects is subject to the satisfaction of various covenants
and conditions contained in the applicable subsidiaries' and joint ventures'
financing documents and to certain utility regulatory restrictions.
Furthermore, the Company is structuring other project financing arrangements
containing, and anticipates that future project level financings will contain,
certain conditions and similar restrictions on the distribution of cash to the
Company.
The Company's subsidiaries, partnerships and joint ventures are separate and
distinct legal entities and have no obligation, contingent or otherwise, to
pay any amounts due pursuant to the Debt Securities or to make any funds
available therefor, whether by dividends, loans or other payments, and do not
guarantee the payment of interest on, premium, if any, or principal of the
Debt Securities. Any right of the Company to receive any assets of any of its
subsidiaries or other affiliates upon any liquidation or reorganization of the
Company (and the consequent right of the holders of the Debt Securities to
participate in the distribution of, or to realize proceeds from, those assets)
will be effectively subordinated to the claims of any such subsidiary's or
other affiliate's creditors (including trade creditors and holders of debt
issued by such subsidiary or other affiliate). At June 30, 1997 the Company
had approximately $3,230.4 million of total consolidated indebtedness, which
included approximately $2,276.5 million of the Company's proportionate share
of joint venture and subsidiary debt, which would be effectively senior to the
Debt Securities, substantially all of which would have been secured by the
assets of such joint ventures and subsidiaries, and $283.9 million of
subordinated debt issued in connection with Capital Trust Convertible
Preferred Securities. As of June 30, 1997, on a pro forma basis, after giving
effect to the consummation of the August 1997 offering of another series of
Capital Trust Convertible Preferred Securities, there would have been
approximately $3,230.4 million of total consolidated indebtedness, which
included approximately $2,276.5 million of the Company's proportionate share
of joint venture and subsidiary debt,
-5-
<PAGE>
which would be effectively senior to the Company's Debt Securities.
LEVERAGE. The Company is substantially leveraged. At June 30, 1997,
the Company's total consolidated liabilities were $4,796.8 million (excluding
deferred income), its obligations in respect of the Trust Convertible
Preferred Securities and the TIDES Securities were $283.9 million, its total
consolidated assets were $6,275.1 million and its total stockholders' equity
was $917.9 million. As of such date, on a pro forma basis, after giving effect
to the consummation of the August 1997 offering of the 6 1/2% Convertible
Preferred Securities, the Company's total consolidated liabilities would have
been $4,796.8 million (excluding deferred income), its obligations in respect
of the Trust Convertible Preferred Securities, the TIDES Securities and the 6
1/2% Convertible Preferred Securities would have been $553.9 million, its
total consolidated assets would have been $6,545.1 million and its
stockholders' equity would have been $917.9 million. The Company's leverage
level presents the risk that the Company might not generate sufficient cash to
service the Company's indebtedness, including the Debt Securities or Preferred
Stock, or that its leveraged capital structure could limit its ability to
finance future acquisitions, develop additional projects, compete effectively
and operate successfully under adverse economic conditions. The Company is
also a holding company which derives substantially all of its operating income
from its subsidiaries and joint ventures. Distributions from such entities are
restricted under various covenants and conditions contained in financing
documents by which they are bound and the stock or assets of substantially all
of such entities is directly or indirectly pledged, to secure various of such
financings or such entities are otherwise subject to regulatory restrictions.
See "Risk Factors--Holding Company Structure."
NORTHERN'S REGULATORY ENVIRONMENT. Northern's electricity
distribution and supply are subject to extensive regulation in the United
Kingdom.
Price Regulation of Distribution. Revenue from Northern's
distribution business is controlled by a formula (the "Distribution Price
Control Formula") which determines the maximum average price per unit of
electricity (expressed in kilowatt ("kW") hours, a "unit") that a regional
electricity company (a "REC") in the United Kingdom may charge. The
Distribution Price Control Formula is expected to have a five year duration
and is subject to review by the Director General of Electricity Supply (the
"Regulator") at the end of each five-year period and at other times in the
discretion of the Regulator. At each review, the Regulator can propose
adjustments to the Distribution Price Control Formula. In July 1994, a review
resulted in a 17% reduction in allowed distribution income compared to the
original formula, before allowing for inflation, effective April 1, 1995. In
July 1995, a further review of distribution prices was concluded by the
Regulator for fiscal years 1997 to 2000. As a result of this further review,
Northern's allowed distribution from income was reduced by a further 11%,
before allowing for inflation, effective April 1, 1996. There can be no
assurance that any further price reviews by the Regulator will not have a
material adverse effect on the Company's results of operations.
Competition in Supply. Northern's supply business is also subject to
price control and is being progressively opened to competition. Northern
currently has an exclusive right, subject to price cap regulation, to supply
customers in its authorized area with a maximum demand of not more than 100 kW
("Franchise Supply Customers"). The market for customers with a maximum demand
above 1 megawatt ("MW") has been open to competition for suppliers of
electricity since privatization while the market for customers with a maximum
demand above 100 kW ("Non-Franchise Supply Customers") became competitive in
April 1994. The final stage of this process is expected to occur on March 31,
1998, when the exclusive right to supply Franchise Supply Customers is
scheduled to end. There can be no assurance that competition among suppliers
of electricity will not have a material adverse effect on the Company's
results of operations.
Pool Purchase Price Volatility. Northern's supply business to
Non-Franchise Supply Customers generally involves entering into fixed price
contracts to supply electricity to its customers. Northern obtains the
electricity to satisfy its obligations under such contracts primarily by
purchases from the wholesale trading
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market for electricity in England and Wales (the "Pool"). Because the price of
electricity purchased from the Pool can be volatile, to the extent that
Northern purchases electricity from the Pool, Northern is exposed to risk
arising from differences between the fixed price at which it sells and the
fluctuating prices at which it purchases electricity, unless it can
effectively hedge such exposure. Northern's ability to manage such risk at
acceptable levels will depend, in part, on the specifics of the supply
contracts that Northern enters into, Northern's ability to implement and
manage an appropriate hedging strategy and the development of an adequate
market for hedging instruments. There can be no assurance that this risk will
be effectively mitigated.
Change in Government Policy. In the general election held in the
United Kingdom on May 1, 1997, the Labour Party won a majority of seats in the
United Kingdom Parliament. On July 31, 1997, the United Kingdom Parliament
passed the windfall tax to be levied on privatized utilities which will result
in a third quarter charge to net income of approximately $136 million. See the
Company's Current Report on Form 8-K dated July 7, 1997, incorporated herein
by reference. There can be no assurance that other possible changes in tax or
utility regulation by the United Kingdom government, by whichever party it is
controlled, would not have a material adverse effect on the Company's results
of operations.
DEVELOPMENT UNCERTAINTY. The Company is actively seeking to develop,
construct, own and operate new energy projects, both domestically and
internationally, the completion of any of which is subject to substantial
risk. Development can require the Company to expend significant sums for
preliminary engineering, permitting, fuel supply, resource exploration, legal
and other expenses in preparation for competitive bids which the Company may
not win or before it can be determined whether a project is feasible,
economically attractive or capable of being financed. Successful development
and construction is contingent upon, among other things, negotiation on terms
satisfactory to the Company of engineering, construction, fuel supply and
power sales contracts with other project participants, receipt of required
governmental permits and consents and timely implementation of construction.
Further, there can be no assurance that the Company, which is substantially
leveraged, will obtain access to the substantial debt and equity capital
required to continue to develop and construct electric power projects or to
refinance projects. The future growth of the Company is dependent, in large
part, upon the demand for significant amounts of additional energy and the
Company's ability to obtain contracts to supply portions of this demand. There
can be no assurance that development efforts on any particular project, or the
Company's efforts generally, will be successful. In this regard, reference is
made to certain uncertainties associated with the Company's Casecnan Project
as described in the Company's Current Reports on Form 8-K dated May 20, 1997
and August 14, 1997, incorporated herein by reference.
UNCERTAINTIES RELATED TO DOING BUSINESS OUTSIDE THE UNITED STATES.
The Company has various projects under construction outside the United States
and a number of projects under award outside the United States. The financing
and development of projects outside the United States entail significant
political and financial risks (including, without limitation, uncertainties
associated with privatization efforts in the countries involved, currency
exchange rate fluctuations, currency repatriation restrictions, changes in
law or regulation, change in government policy, political instability, civil
unrest and expropriation) and other structuring issues that have the potential
to cause substantial delays in respect of or material impairment of the value
of the project being developed, which the Company may not be capable of fully
insuring against. The uncertainty of the legal environment in certain foreign
countries in which the Company is developing and may develop or acquire
projects could make it more difficult for the Company to enforce its rights
under agreements relating to such projects. In addition, the laws and
regulations of certain countries may limit the ability of the Company to hold
a majority interest in some of the projects that it may develop or acquire.
The Company's international projects may, in certain cases, be terminated by
the applicable foreign governments. Furthermore, the central bank of any such
country may have the authority in certain circumstances to suspend, restrict
or otherwise impose conditions on foreign exchange transactions or to approve
distributions to foreign investors. Although the Company may structure certain
power purchase agreements and other project revenue agreements to provide for
payments to be made in, or indexed to, United States dollars or a currency
freely convertible into United States dollars, there can be no assurance that
the Company will be able to achieve this structure in all cases or that a power
purchaser or other customer will be able to obtain sufficient dollars or other
hard currency or that available dollars will be allocated to pay such
obligations. In addition, the Company's investment in Northern and any
dividends or
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distributions of earnings in respect of such investment, may be significantly
affected by fluctuations in the exchange rate between the United States dollar
and the British pound. Although the Company expects to enter into certain
transactions to hedge risks associated with exchange rate fluctuations, there
can be no assurance that such transactions will be successful in reducing such
risks.
EXPLORATION, DEVELOPMENT AND OPERATION UNCERTAINTIES OF GEOTHERMAL
RESOURCES. Geothermal exploration, development and operations are subject to
uncertainties similar to those typically associated with oil and gas
exploration and development, including dry holes and uncontrolled releases.
Because of the geological complexities of geothermal reservoirs, the
geographic area and sustainable output of geothermal reservoirs can only be
estimated and cannot be definitively established. There is, accordingly, a
risk of an unexpected decline in the capacity of geothermal wells and a risk
of geothermal reservoirs not being sufficient for sustained generation of the
electrical power capacity desired. In addition, geothermal power production
poses unusual risks of seismic activity. Accordingly, there can be no
assurance that earthquake, property damage or business interruption insurance
will be adequate to cover all potential losses sustained in the event of
serious seismic disturbances or that such insurance will be available on
commercially reasonable terms. The success of a geothermal project depends on
the quality of the geothermal resource and operational factors relating to the
extraction of the geothermal fluids involved in such project. The quality of a
geothermal resource is affected by a number of factors, including the size of
the reservoir, the temperature and pressure of the geothermal fluids in such
reservoir, the depth and capacity of the production and injection wells, the
amount of dissolved solids and noncondensible gases contained in such
geothermal fluids, and the permeability of the subsurface rock formations
containing such geothermal resource, including the presence, extent and
location of fractures in such rocks. The quality of a geothermal resource may
decline as a result of a number of factors, including the intrusion of
lower-temperature fluid into the producing zone. An incorrect estimate by the
Company of the quality of a geothermal resource, or a decline in such quality,
could have a material adverse effect on the Company's results of operations.
In addition, both the cost of operations and the operating performance of
geothermal power plants may be adversely affected by a variety of resource
operating factors. Production and injection wells can require frequent
maintenance or replacement. Corrosion caused by high-temperature and
high-salinity geothermal fluids may compel the replacement or repair of
certain equipment, vessels or pipelines. New production and injection wells
may be required for the maintenance of operating levels, thereby requiring
substantial capital expenditures.
GENERAL OPERATING UNCERTAINTIES. The operation of a power plant
involves many risks, including the breakdown or failure of power generation
equipment, pipelines, transmission lines or other equipment or processes, fuel
interruption, and performance below expected levels of output or efficiency.
Each facility may depend on a single or limited number of entities to purchase
electricity or thermal energy, to supply water, to supply gas, to transport
gas, to dispose of wastes or to wheel electricity. The failure of any such
purchasing utility, steam host, water or gas supplier, gas transporter,
wheeling utility or other relevant project participant to fulfill its
contractual obligations could have a material adverse impact on the Company.
FUEL SUPPLY OPERATIONS. The primary fuel source for certain of the
Company's projects is natural gas and a substantial portion of the operating
expenses of such facilities consists of the costs of obtaining natural gas
through gas supply agreements and transporting that gas to the projects under
gas transportation agreements. Although the Company believes that it has
contracted for natural gas supply and transportation in sufficient quantities
to satisfy the needs of its projects, the gas suppliers are not required in
all cases to provide dedicated reserves in support of their contractual
obligations. Unless the gas projects were able to obtain substitute volumes of
natural gas including the requisite transportation services, for such volumes
at a price not materially higher than the sum of the contract price under the
existing gas supply agreements and any damages paid by the supplier for
failure to deliver, the sustained failure of a supplier to deliver natural gas
in accordance with its contract could have a material adverse effect on the
cash flows to the Company. In addition, under certain gas supply contracts the
Company is obligated to pay for a certain minimum quantity of natural gas even
if it cannot utilize it. The Company intends to manage its requirements for
contract volumes under the gas supply agreements so as to meet the minimum
take requirements through a combination of utilization of nominated volumes in
operations and resales of the remainder of the volumes to third-party
customers, if necessary.
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Finally, the state, federal and Canadian regulatory authorities that have
jurisdiction over natural gas transportation have the right to modify aspects
of the rates, terms and conditions of those contracts. It is possible that
such a modification could materially increase the fuel transportation costs of
the projects or give the transporter a right to terminate or suspend or
decrease its performance under its contract.
PRESENT DEPENDENCE ON LARGE CUSTOMER; CONTRACT UNCERTAINTIES. The
Company currently relies on long-term power purchase "Standard Offer No. 4"
contracts (each, an "SO4 Agreement") with a large customer, Southern
California Edison Company ("Edison"), to generate a substantial portion of its
operating revenues. Any material failure by Edison to fulfill its contractual
obligations under such contracts is likely to have a material adverse effect
on the Company's results of operations. Each of the Company's SO4 Agreements
provides for both capacity payments and energy payments for a term of between
20 and 30 years. During the first ten years after achieving firm operation,
energy payments under each SO4 Agreement are based on a pre-set schedule.
Thereafter, while the basis for the capacity payment remains the same, the
required energy payment is Edison's then-current published avoided cost of
energy ("Avoided Cost of Energy") as determined by the California Public
Utility Commission ("CPUC"). The initial ten-year period expires in August
1997 for the Company's Navy I Project, March 1999 for its BLM Project and
January 2000 for its Navy II Project, which three projects comprise the Coso
Project in California (the "Coso Project"). Such ten-year period expired in
1996 with respect to one of the eight geothermal plants in the Imperial Valley
in California ("Imperial Valley Projects") and expires in 1999 for three of
its Imperial Valley Projects and in 2000 for the remaining two Imperial Valley
Projects that operate under SO4 Agreements.
Estimates of Edison's future Avoided Cost of Energy vary
substantially in any given year. The Company cannot predict the likely level
of Avoided Cost of Energy prices under its SO4 Agreements with Edison at the
expiration of the fixed-price periods. Edison's Avoided Cost of Energy as
determined by the CPUC is currently substantially below the current scheduled
energy prices under the Company's respective SO4 Agreements and is currently
expected to remain so. For the year ended December 31, 1996, the time
period-weighted average of Edison's Avoided Cost of Energy was 2.5 cents per
kWh, compared to the time period-weighted average for the year ended December
31, 1996 selling prices for energy of approximately 11.3 cents per kWh for the
Company. Thus, the revenues generated by each of the Company's facilities
operating under SO4 Agreements are likely to decline significantly after the
expiration of the applicable fixed price period.
COMPETITION AND DOMESTIC DEREGULATION; INDUSTRY RESTRUCTURING. The
international power production market is characterized by numerous strong and
capable competitors, many of which have more extensive and more diversified
developmental or operating experience (including international experience) and
greater financial resources than the Company. Many of these competitors also
compete in the domestic market. Further, in recent years, the domestic power
production industry has been characterized by strong and increasing
competition with respect to the industry's efforts to obtain new power sales
agreements, which has contributed to a reduction in prices offered to
utilities. In that regard, many utilities often engage in "competitive bid"
solicitations to satisfy new capacity demands. In the domestic market,
competition is expected to increase as the electric utility industry becomes
deregulated. In addition, recent deregulation and industry restructuring
activity may cause certain utilities or other contract parties to attempt to
renegotiate contracts or otherwise fail to perform their contractual
obligations, which in turn could adversely affect the Company's results of
operations. In particular, the state of California has adopted a bill to
restructure the electric industry by providing for a phased-in competitive
power generation industry, with a power pool and an independent system
operator, and for direct access to generation for all power purchasers outside
the power exchange under certain circumstances. Although the bill contemplates
that existing qualifying facility power sales contracts will be honored, and
all of the Company's California projects are qualifying facilities, until the
new system is fully implemented, it is impossible to predict what impact, if
any, it may have on the operations of those projects.
IMPACT OF ENVIRONMENTAL, ENERGY AND OTHER REGULATIONS. The Company is
subject to a number of environmental and other laws and regulations affecting
many aspects of its present and future operations, including the disposal of
various forms of waste, the construction or permitting of new facilities, and
the drilling
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and operation of new and existing wells. Such laws and regulations generally
require the Company to obtain and comply with a wide variety of licenses,
permits and other approvals. The Company also remains subject to a number of
complex and stringent laws and regulations that both public officials and
private individuals may seek to enforce. There can be no assurance that
existing regulations will not be revised or that new regulations will not be
adopted or become applicable to the Company which could have an adverse impact
on its operations. The implementation of regulatory changes imposing more
comprehensive or stringent requirements on the Company, which would result in
increased compliance costs, could have a material adverse effect on the
Company's results of operations. In addition, regulatory compliance for the
construction of new facilities is a costly and time-consuming process, and
intricate and rapidly changing environmental regulations may require major
expenditures for permitting and create the risk of expensive delays or
material impairment of project value if projects cannot function as planned
due to changing regulatory requirements or local opposition.
The Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"), and the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), are two of the laws (including the regulations thereunder) that
affect the Company's operations. PURPA provides to qualifying facilities
("QFs") certain exemptions from federal and state laws and regulations,
including organizational, rate and financial regulation. PUHCA regulates
public utility holding companies and their subsidiaries. The Company is not
and will not be subject to regulation as a holding company under PUHCA as long
as the domestic power plants it owns are QFs under PURPA or are exempted as
exempt wholesale generators ("EWGs"), and so long as its foreign utility
operations are exempted as EWGs or foreign utility companies or are otherwise
exempted under PUHCA. QF status is conditioned on meeting certain criteria,
and would be jeopardized, for example, in the case of the Company's
cogeneration facilities, by the loss of a steam customer or reduction of steam
purchases below the amount required by PURPA. The Company's four cogeneration
facilities have steam sales agreements with existing industrial hosts which
agreements must be maintained in effect or replaced in order to maintain QF
status. In the event the Company were unable to avoid the loss of such status
for one of its facilities, such an event could result in termination of a
given project's power sales agreement and a default under the project
subsidiary's project financing agreements.
Currently, Congress is considering proposed legislation that would
amend PURPA by eliminating the requirement that utilities purchase electricity
from qualifying facilities at prices based on Avoided Cost of Energy. The
Company does not know whether such legislation will be passed or what form it
may take. The Company believes that if any such legislation is passed, it
would apply to new projects only and thus, although potentially impacting the
Company's ability to develop new domestic projects, it would not affect the
Company's existing qualifying facilities. There can be no assurance, however,
that any legislation passed would not adversely impact the Company's existing
domestic projects.
In addition, many states are implementing or considering regulatory
initiatives designed to increase competition in the domestic power generation
industry and increase access to electric utilities' transmission and
distribution systems for independent power producers and electricity
consumers. On September 1, 1997, the California legislature adopted an
industry restructuring bill that would provide for a phased-in competitive
power generation industry with a power pool and independent system operator
and also would permit direct access to generation for all power purchasers
outside the power exchange under certain circumstances. Under the bill,
consistent with the requirements of PURPA, existing qualifying facilities
power sales agreements would be honored. The Company cannot predict the final
form or timing of the proposed industry restructuring or the results of its
operations.
The structure of such federal and state energy regulations have in
the past, and may in the future, be the subject of various challenges and
restructuring proposals by utilities and other industry participants. The
implementation of regulatory changes in response to such changes or
restructuring proposals, or otherwise imposing more comprehensive or stringent
requirements on the Company, which would result in increased compliance costs,
could have a material adverse effect on the Company's results of operations.
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SHARES OF COMMON STOCK ELIGIBLE FOR FUTURE SALE. Pursuant to the
Company's 1996 Stock Option Plan (the "1996 Plan"), as of June 30, 1997, the
Company had outstanding various options to its officers, directors and
employees for the purchase of 4,859,668 shares of Common Stock. All of the
shares of Common Stock issuable upon exercise of said options have been
registered pursuant to registration statements on Form S-8, and, when fully
vested, are available for immediate resale. Sales of substantial amounts of
Common Stock or the availability of Common Stock for sale, could have an
adverse impact on the market price of the Common Stock and on the Company's
ability to raise additional capital through the sale of Common Stock.
LACK OF PUBLIC MARKET FOR THE DEBT SECURITIES AND THE PREFERRED
STOCK. There is no existing public trading market for the Debt Securities and
the Preferred Stock and there can be no assurance regarding the future
development of a market for either the Debt Securities or the Preferred Stock,
or the ability of holders of such securities to sell their Debt Securities
and/or Preferred Stock or the price at which such holders may be able to sell
their Securities. If such a market were to develop, the Debt Securities and/or
Preferred Stock could trade at prices that may be higher or lower than their
initial offering price depending on many factors, including prevailing
interest rates, the price of Common Stock, the Company's operating results and
the market for similar securities. Historically, the market for non-investment
grade debt has demonstrated substantial volatility in the prices of securities
similar to the Debt Securities. There can be no assurance that the future
market for the Debt Securities will not be subject to similar volatility.
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THE COMPANY
GENERAL
CalEnergy Company, Inc. (the "Company") is a fast-growing global
power company whose goal is to be one of the leading providers of low cost
energy services throughout the world as electricity and gas markets privatize
or deregulate. The Company was founded in 1971 and, through its subsidiaries,
manages and owns interests in over 6,000 MW of power generation facilities in
operation, construction and development worldwide, currently operates 20
generating facilities and also supplies and distributes electricity to 1.5
million customers. In addition, through its recently acquired subsidiary,
Northern Electric plc ("Northern"), the Company is engaged in the distribution
and supply of electricity to approximately 1.5 million customers primarily in
northeast England as well as the generation and supply of electricity
(together with other related business activities) throughout England and
Wales.
The Company's Common Stock is traded on the New York, Pacific and
London Stock Exchanges. As of June 30, 1997, PKS was an approximate 27%
stockholder of the Company (on a fully diluted basis). PKS is a large
employee-owned construction, mining and telecommunications company with
approximately $3.0 billion in revenues in 1996. PKS is one of the largest
construction companies in North America and has been in the construction
business since 1884.
------------------------------------------------------
The principal executive offices of the Company are located at 302
South 36th Street, Suite 400, Omaha, Nebraska 68131 and its telephone number
is (402) 341-4500. The Company was incorporated in 1971 under the laws of the
State of Delaware.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to
fixed charges on a historical basis for each of the five years in the period
ended December 31, 1996 and for the six months ended June 30, 1996 and 1997.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges......................... 3.2 2.8 1.7 1.5 1.6 1.4 1.7
</TABLE>
For purposes of computing historical ratios of earnings to fixed
charges, earnings are divided by fixed charges. "Earnings" represent the
aggregate of (a) the pre-tax income of the Company, including its
proportionate share of the pre-tax income of the Coso Project and excluding
the equity in loss of a non-consolidated subsidiary, and (b) fixed charges,
less capitalized interest. "Fixed charges" represent interest (whether
expensed or capitalized), amortization of deferred financing and bank fees,
and the portion of rentals considered to be representative of the interest
factor (one-third of lease payments) and preferred stock dividend requirements
of majority owned subsidiaries.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement
accompanying this Prospectus, proceeds from the sale of the Offered Securities
ultimately will be used by the Company to make equity investments in future
domestic and international energy projects, to fund possible project or
Company acquisitions, for the repayment of debt or for other general corporate
purposes, and initially may be temporarily invested in short-term securities.
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DESCRIPTION OF CAPITAL STOCK
The following summary does not purport to be complete and is subject
to, and qualified in its entirety by, the Company's Restated Certificate of
Incorporation, as amended (the "Restated Certificate of Incorporation"), and
the Company's By-Laws, as amended (the "By-Laws"), and by the provisions of
applicable law. The authorized capital stock of the Company consists of
180,000,000 shares of Common Stock, par value $0.0675 per share, and 2,000,000
shares of Preferred Stock, no par value. This summary contains a description
of certain general terms of the Common Stock and the Preferred Stock to which
any Prospectus Supplement may relate. Certain terms of any Common Stock or any
series of Preferred Stock offered by a Prospectus Supplement will be described
in the Prospectus Supplement relating thereto, including the number of shares,
offered, any initial offering price, and market price and dividend
information. If so indicated in the Prospectus Supplement, the terms of any
series may differ from the terms set forth below.
COMMON STOCK
At June 30, 1997, there were 63,668,907 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of stockholders.
Holders of the Common Stock vote together as a single class on all matters.
Subject to preferences that may be applicable to any outstanding Preferred
Stock, holders of Common Stock are entitled to receive ratably such dividends
as may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
outstanding Preferred Stock. The outstanding shares of Common Stock are fully
paid and nonassessable. The Common Stock will, when issued against payment
therefor, be fully paid and nonassessable.
On December 1, 1988, the Company distributed a dividend of one
Preferred Share Purchase Right (a "Right") for each outstanding share of
Common Stock. The Rights are not exercisable until ten days after a person or
group, without prior Board approval, acquires, or has the right to acquire,
beneficial ownership of 20% or more of the Common Stock or announces a tender
or exchange offer for 30% or more of the Common Stock. Each Right entitles the
holder to purchase one one-hundredth of a share of Series A Junior Preferred
Stock, no par value ("Series A Preferred Stock"), for $52. The Rights may be
redeemed by the Board of Directors up to ten days after an event triggering
the distribution of certificates for the Rights. The Rights will expire,
unless previously redeemed or exercised, on November 30, 1998. The Rights are
automatically attached to, and trade with, each share of Common Stock.
PREFERRED STOCK
The Board of Directors has the authority to issue up to 2,000,000
shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares
constituting any series or the designation of such series, without any further
action by the stockholders. The issuance of shares of Preferred Stock may have
the effect of delaying, deferring or preventing a change in control of the
Company without further action by the stockholders. The issuance of shares of
Preferred Stock with voting and conversion rights may adversely affect the
voting power of the holders of Common Stock, including the loss of voting
control to others. The Company has no present plans to issue any additional
shares of Preferred Stock. See "Description of Preferred Stock."
RESTATED CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS AFFECTING CHANGE
IN CONTROL
The Restated Certificate of Incorporation and the By-Laws include
certain provisions that are intended to enhance the likelihood of continuity
and stability in the composition of the Board of Directors and that may have
the effect of delaying, deterring or preventing a future takeover or change in
control of the Company, unless such takeover or change in control is approved
by the Board of Directors. Such provisions may also
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render the removal of the directors and management more difficult. Such
provisions include a classified Board of Directors divided into three classes
serving staggered three-year terms, prohibit stockholders of the Company from
taking action by written consent, require the affirmative vote of at least
66-2/3% of the outstanding shares of stock of the Company entitled to vote
thereon to adopt, repeal, alter, amend or rescind the By-Laws, and require
that special meetings of stockholders be called only by the Board of Directors
or the Chief Executive Officer. In addition to the foregoing, the Board of
Directors has adopted a Stockholder Rights Plan, which provided for a dividend
of one Right for each outstanding share of Common Stock. See "--Common Stock."
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the
Delaware General Corporation Law ("Section 203"). Under Section 203, certain
"business combinations" between a Delaware corporation whose stock is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that
such stockholder became an interested stockholder, unless (i) the corporation
has elected in its original certificate of incorporation not to be governed by
Section 203 (the Company did not make such an election), (ii) the transaction
in which the stockholder became an interested stockholder or the business
combination was approved by the board of directors of the corporation before
the other party to the business combination became an interested stockholder,
(iii) upon consummation of the transaction that made it an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the commencement of the transaction
(excluding voting stock owned by directors who are also officers or held in
employee benefit plans in which the employees do not have a confidential right
to tender or vote stock held by the plan) or (iv) the business combination was
approved by the board of directors of the corporation and ratified by
two-thirds of the voting stock which the interested stockholder did not own.
The term "business combination" is defined generally to include mergers or
consolidations between a Delaware corporation and an "interested stockholder,"
transactions with an "interested stockholder" involving the assets or stock of
the corporation or its majority-owned subsidiaries and transactions which
increase an "interested stockholder's" percentage ownership of stock. The term
"interested stockholder" is defined generally as a stockholder who, together
with its affiliates and associates, owns (or, within three years prior, did
own) 15% or more of a Delaware corporation's voting stock. Section 203 could
prohibit or delay a merger, takeover or other change in control of the Company
and therefore could discourage attempts to acquire the Company.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the shares of Preferred
Stock that may be offered by the Company sets forth certain general terms and
provisions of the Preferred Stock to which any Prospectus Supplement may
relate. Certain other terms of any series of Preferred Stock and the terms of
any related option, put or right of the Company to require the holder of any
other Security offered to also acquire shares of Preferred Stock will be
specified in the applicable Prospectus Supplement. If so specified in the
applicable Prospectus Supplement, the terms of any series of Preferred Stock
may differ from the terms set forth below. The description of the terms of the
Preferred Stock set forth below and in any Prospectus Supplement is
necessarily a summary thereof and is qualified in its entirety by reference to
the Certificate of Designation relating to the applicable series of Preferred
Stock, which Certificate of Designation will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
GENERAL
Pursuant to the Restated Certificate of Incorporation and the
Delaware General Corporation Law, the Board of Directors of the Company has
the authority, without further stockholder action, to issue from time to time
up to a maximum of up to 2,000,000 shares of Preferred Stock, in one or more
series and for such consideration as may be fixed from time to time by the
Board of Directors of the Company and to fix before the issuance of any shares
of Preferred Stock of a particular series, the designation of such series, the
number of shares to comprise such series, the dividend rate or rates payable
with respect to the shares of such series, the redemption price or prices, if
any, and the terms and conditions of any redemption, the voting rights, any
sinking fund provisions for the redemption or purchase of the shares of such
series, the terms and conditions upon which the shares are convertible or
exchangeable, if they are convertible or exchangeable, and any other relative
rights, preferences and limitations pertaining to such series.
Reference is made to the Prospectus Supplement relating to the
particular series of Preferred Stock offered thereby for specific terms,
including: (i) the designation, stated value and liquidation preference of
such Preferred Stock and the number of shares offered; (ii) the initial public
offering price at which such shares will be issued; (iii) the dividend rate or
rates (or method of calculation), the dividend periods, the date or dates on
which dividends shall be payable and whether such dividends shall be
cumulative or noncumulative and, if cumulative, the dates from which dividends
shall commence to cumulate; (iv) any redemption or sinking fund provisions;
(v) any conversion or exchange provisions; (vi) the procedures for any auction
and remarketing, if any, of such Preferred Stock; (vii) whether interests in
Preferred Stock will be represented by depositary shares; and (viii) any
additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued against payment therefor, be
fully paid and nonassessable. Holders of Preferred Stock will have no
preemptive rights to subscribe for any additional securities which may be
issued by the Company.
Because the Company is a holding company, its rights and the rights
of holders of its securities, including the holders of Preferred Stock, to
participate in the distribution of assets of any subsidiary of the Company
upon the latter's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors and preferred stockholders, except to
the extent the Company may itself be a creditor with recognized claims against
such subsidiary or a holder of preferred stock of such subsidiary.
DIVIDENDS
The holders of the Preferred Stock will be entitled to receive, when
and as declared by the Board of Directors of the Company, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the
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applicable Prospectus Supplement. Dividends will be payable to the holders of
record as they appear on the stock books of the Company on such record dates
as will be fixed by the Board of Directors of the Company. Dividends may be
paid in the form of cash, Preferred Stock (of the same or a different series)
or Common Stock of the Company, in each case as specified in the applicable
Prospectus Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement.
Dividends, if cumulative, will be cumulative from and after the date set forth
in the applicable Prospectus Supplement. If the Board of Directors of the
Company fails to declare a dividend payable on a dividend payment date on any
Preferred Stock for which dividends are noncumulative ("Noncumulative
Preferred Stock"), then the holders of such Preferred Stock will have no right
to receive a dividend in respect of the dividend period relating to such
dividend payment date, and the Company will have no obligation to pay the
dividend accrued for such period, whether or not dividends on such Preferred
Stock are declared or paid on any future dividend payment dates.
The Company shall not declare, pay or set apart for payment any
dividends on any series of its Preferred Stock ranking, as to dividends, on a
parity with or junior to the outstanding Preferred Stock of any series unless
(i) if such series of Preferred Stock has a cumulative dividend ("Cumulative
Preferred Stock"), full cumulative dividends have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on such Preferred Stock for all past dividend
periods and the then current dividend period, or (ii) if such series of
Preferred Stock is Noncumulative Preferred Stock, full dividends for the then
current dividend period on such Preferred Stock have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment. When dividends are not paid in full upon Preferred
Stock of any series and any other shares of Preferred Stock of the Company
ranking on a parity as to dividends with such Preferred Stock, all dividends
declared upon such Preferred Stock and any other Preferred Stock of the
Company ranking on a parity as to dividends with such Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such other shares of Preferred Stock shall in all cases
bear to each other the same ratio that the accrued dividends per share on such
Preferred Stock (which shall not, if such Preferred Stock is Noncumulative
Preferred Stock, include any accumulation in respect of unpaid dividends for
prior dividend periods) and such other shares of Preferred Stock bear to each
other. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on Preferred Stock of such series
which may be in arrears.
Except as set forth in the preceding sentence, unless (i) full
dividends on the outstanding Cumulative Preferred Stock of any series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past dividend
periods and the then current dividend period or (ii) full dividends for the
then current dividend period on the outstanding Noncumulative Preferred Stock
of any series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment, no
dividends (other than in Common Stock of the Company or other shares of the
Company ranking junior to such Preferred Stock as to dividends and upon
liquidation) shall be declared or paid or set aside for payment, nor shall any
other distribution be made, on the Common Stock of the Company or on any other
shares of the Company ranking junior to or on a parity with such Preferred
Stock as to dividends or upon liquidation.
Unless (i) full dividends on the Cumulative Preferred Stock of any
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period or (ii) full dividends
for the then current dividend period on the Noncumulative Preferred Stock of
any series have been declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment, no Common Stock or any other
shares of the Company ranking junior to or on a parity with such Preferred
Stock as to dividends or upon liquidation shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid or made
available for a sinking fund for the redemption of any such shares) by the
Company or any subsidiary of the Company except by conversion into or exchange
for shares of the Company ranking junior to such Preferred Stock as to
dividends and upon liquidation. Any dividend payment made on shares of
Cumulative Preferred
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Stock of any series shall first be credited against the earliest accrued but
unpaid dividend due with respect to shares of such series which remains
unpaid.
REDEMPTION
Preferred Stock may be redeemable, in whole or in part, at the option
of the Company, out of funds legally available therefor, and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise, in each case
upon terms, at the times and at the redemption prices specified, in the
applicable Prospectus Supplement. Preferred Stock redeemed by the Company will
be restored to the status of authorized but unissued shares of Preferred
Stock.
The Prospectus Supplement relating to a series of Preferred Stock
that is subject to mandatory redemption will specify the number of shares of
such Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Stock is Noncumulative Preferred
Stock, include any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be
payable in cash or other property, as specified in the applicable Prospectus
Supplement. If the redemption price for Preferred Stock of any series is
payable only from the net proceeds of the issuance of capital stock of the
Company, the terms of such Preferred Stock may provide that, if no such
capital stock shall have been issued or to the extent the net proceeds from
any issuance are insufficient to pay in full the aggregate redemption price
then due, such Preferred Stock shall automatically and mandatorily be
converted into shares of the applicable capital stock of the Company pursuant
to conversion provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) full dividends on the
Cumulative Preferred Stock of any series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period or (ii) full dividends for the then current dividend period on the
Noncumulative Preferred Stock of any series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment, no shares of Preferred Stock of such series shall be
redeemed unless all outstanding shares of Preferred Stock of such series are
simultaneously redeemed, and the Company shall not purchase or otherwise
acquire any shares of Preferred Stock of such series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of Preferred Stock
of such series pursuant to a purchase or exchange offer provided such offer is
made on the same terms to all holders of the Preferred Stock of such series.
Notice of redemption shall be given by mailing the same to each
record holder of the Preferred Stock to be redeemed, not less than 30 nor more
than 60 days prior to the date fixed for redemption thereof, at the address of
such holder as the same shall appear on the stock books of the Company. Each
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such Preferred Stock are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi)
the date upon which the holder's conversion or exchange rights, if any, as to
such shares shall terminate. If fewer than all the shares of Preferred Stock
of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of shares of Preferred Stock to be
redeemed from each such holder.
If fewer than all the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Board of Directors of the Company and such shares may be
redeemed pro rata from the holders of record of such shares in proportion to
the number of such shares held by such holders (with adjustments to avoid
redemption of fractional shares) or by lot in a manner determined by the Board
of Directors of the Company.
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If notice of redemption of any shares of Preferred Stock has been
given and if the funds necessary for such redemption have been set aside by
the Company, separate and apart from its other funds, in trust for the pro
rata benefit of holders of any shares of Preferred Stock so called for
redemption, then from and after the redemption date for such shares, dividends
on such shares shall cease to accrue and such shares shall no longer be deemed
to be outstanding, and all rights of the holders thereof as stockholders of
the Company (except the right to receive the redemption price) shall cease.
Upon surrender, in accordance with such notice, of the certificates
representing any such shares (properly endorsed or assigned for transfer, if
the Board of Directors of the Company shall so require and the notice shall so
state), the redemption price set forth above shall be paid out of the funds
provided by the Company. If fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
CONVERSION OR EXCHANGE RIGHTS
The Prospectus Supplement relating to a series of Preferred Stock
that is convertible or exchangeable will state the terms on which shares of
such series are convertible or exchangeable into Common Stock, another series
of Preferred Stock or Debt Securities.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the holders of each series of Preferred Stock
shall be entitled to receive out of the assets of the Company legally
available for distribution to stockholders, before any distribution of assets
is made to holders of Common Stock or any other class or series of capital
stock ranking junior to such Preferred Stock upon liquidation, liquidating
distributions in the amount of the liquidation preference of such Preferred
Stock plus all accrued and unpaid dividends thereon (which shall not, in the
case of Noncumulative Preferred Stock, include any accumulation in respect of
unpaid dividends for prior dividend periods). If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to Preferred Stock of any series and any other shares of
Preferred Stock of the Company ranking as to any such distribution on a parity
with such Preferred Stock are not paid in full, the holders of such Preferred
Stock and of such other shares of Preferred Stock will share ratably in any
such distribution of assets of the Company in proportion to the full
respective preferential amounts to which they are entitled. After payment of
the full amount of the liquidating distribution to which they are entitled,
the holders of Preferred Stock of any series Will not be entitled to any
further participation in any distribution of assets by the Company.
VOTING RIGHTS
Except as indicated below or in the applicable Prospectus Supplement,
or except as expressly required by applicable law, the holders of Preferred
Stock will not be entitled to vote.
If the Company fails to pay dividends on any shares of Preferred
Stock for six consecutive quarterly periods, the holders of such shares of
Preferred Stock (voting separately as a class with all other series of
Preferred Stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors of the Company at a special meeting called by the holders of record
of at least 10% of such Preferred Stock or the next annual meeting of
stockholders and at each subsequent meeting until (i) all dividends
accumulated on shares of Cumulative Preferred Stock for the past dividend
periods and the then current dividend period shall have been fully paid or
declared and a sum sufficient for the payment thereof set aside for payment or
(ii) four consecutive quarterly dividends on shares of Noncumulative Preferred
Stock shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of
Directors of the Company will be increased by two directors.
So long as any shares of Preferred Stock remain outstanding, the
Company shall not, without the affirmative vote of the holders of at least
two-thirds of each series of Preferred Stock outstanding at the time,
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given in person or by proxy, at a meeting (voting separately as a class): (i)
authorize, create or issue, or increase the authorized or issued amount of,
any class or series of capital stock ranking prior to such series of Preferred
Stock with respect to payment of dividends or distribution of assets upon
liquidation, dissolution or winding up, or reclassify any capital stock into
any such shares, or authorize, create or issue any obligation or security
convertible into, exchangeable for or evidencing the right to purchase any
such shares or (ii) amend, alter or repeal the provisions of the Restated
Certificate of Incorporation, including the Certificate of Designation
relating to such series of Preferred Stock, whether by merger, consolidation,
or otherwise, so as to materially and adversely affect any right, preference,
privilege or voting power of such series of Preferred Stock or the holders
thereof; provided, however, that any increase in the amount of the authorized
Preferred Stock or any outstanding series of Preferred Stock or any other
capital stock of the Company, or the creation and issuance of any other series
of Preferred Stock or of any other capital stock of the Company, in each case
ranking on a parity with or junior to the Preferred Stock of such series with
respect to the payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities may consist of Senior Debt Securities or
Subordinated Debt Securities. The Senior Debt Securities will be issued under
an indenture (the "Senior Debt Indenture") between the Company, as issuer, and
one or more trustees (each a "Trustee") meeting the requirements of a trustee
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The Subordinated Debt Securities will be issued under an indenture (the
"Subordinated Debt Indenture") between the Company, as issuer, and a Trustee.
Forms of the Indentures have been filed as exhibits to the
Registration Statement of which this Prospectus is a part. The Indentures are
subject to and governed by the Trust Indenture Act. The following summaries of
certain provisions of the Indentures do not purport to be complete, and where
reference is made to particular provisions of the Indentures, such provisions,
including definitions of certain terms, are incorporated by reference as a
part of such summaries or terms, which are qualified in their entirety by such
reference. The Indentures are substantially identical except for provisions
relating to subordination.
The Debt Securities may be issued in one or more series. The
particular terms of each series of Debt Securities, as well as any
modifications of or additions to the general terms of the Debt Securities as
described herein that may be applicable in the case of a particular series of
Debt Securities, will be described in the Prospectus Supplement relating to
such series of Debt Securities. Accordingly, for a description of the terms of
a particular series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the description of Debt Securities
set forth in this Prospectus.
GENERAL
Neither of the Indentures limits the amount of Debt Securities that
may be issued thereunder. Each Indenture provides that Debt Securities
issuable thereunder may be issued up to the aggregate principal amount which
may be authorized from time to time by the Company. Reference is made to the
Prospectus Supplement for the following terms of the Debt Securities (to the
extent such terms are applicable to such Debt Securities) in respect of which
this Prospectus is being delivered (the "Offered Debt Securities"):
(i) the title of the Offered Debt Securities and whether the Offered
Debt Securities are Senior Debt Securities or Subordinated Debt Securities;
(ii) the aggregate principal amount of the Offered Debt Securities
and any limit on such aggregate principal amount;
(iii) the date or dates, or the method for determining such date or
dates, on which the principal of the Offered Debt Securities will be payable;
(iv) the rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at which the Offered
Debt Securities will bear interest, if any;
(v) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates for such
interest payment dates, or the method by which any such date shall be
determined, the person to whom such interest shall be payable, and the basis
upon which interest shall be calculated if other than that of a 360-day year
of twelve 30-day months;
(vi) the place or places where the principal of (and premium, if any)
and interest, if any, on such Offered Debt Securities will be payable, such
Offered Debt Securities may be surrendered for conversion or registration of
transfer or exchange and notices or demands to or upon the Company in respect
of such Offered Debt Securities and the applicable Indenture may be served;
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(vii) the period or periods within which, the price or prices at
which and the terms and conditions upon which the Offered Debt Securities may
be redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(viii) the denominations of the Offered Debt Securities if other than
$1,000 and any integral multiple thereof;
(ix) if other than the principal amount thereof, the portion of the
principal amount of the Offered Debt Securities payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the portion of the
principal amount of the Offered Debt Securities which is convertible into
Common Stock or Preferred Stock, or the method by which any such portion shall
be determined;
(x) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Offered Debt Securities may be determined
with reference to an index, formula or other method (which index, formula or
method may, but need not be, based on one or more currencies, currency units,
composite currencies, commodities, equity indicies or other indicies) and the
manner in which such amounts shall be determined;
(xi) any additions to, modifications of or deletions from the terms
of the Offered Debt Securities with respect to the Events of Default or
covenants set forth in the applicable Indenture;
(xii) provisions, if any, granting special rights to the Holders of
the Offered Debt Securities upon the occurrence of such events as may be
specified;
(xiii) whether any of the Offered Debt Securities are to be issuable
initially in temporary global form and whether any of the Offered Debt
Securities are to be issuable in permanent global form and, if so, whether
beneficial owners of interests in any such permanent global Security may
exchange such interests for Debt Securities of such series and of like tenor
of any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in the
applicable Prospectus Supplement, and, if the Offered Debt Securities are to
be issuable as a global Security, the identity of the depositary for the
Offered Debt Securities;
(xiv) the date as of which any temporary global Security representing
outstanding Offered Debt Securities shall be dated if other than the date of
original issuance of the first Offered Debt Security to be issued;
(xv) the Person to whom any interest on any Offered Debt Security
shall be payable, if other than the Person in whose name that Offered Debt
Security is registered, and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment Date
will be paid if other than in the manner provided in the applicable Prospectus
Supplement;
(xvi) the applicability, if any, of defeasance and covenant
defeasance provisions of the applicable Indenture and any provisions in
modification of, in addition to or in lieu of any such defeasance or covenant
defeasance provisions;
(xvii) if the Offered Debt Securities are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Offered Debt Security) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms of
such certificates, documents or conditions;
(xviii) if the Offered Debt Securities are to be issued upon the
exercise of warrants, the time, manner and place for such Offered Debt
Securities to be authenticated and delivered;
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(xix) the terms, if any, upon which the Offered Debt Securities may
be convertible into Common Stock or Preferred Stock of the Company and the
terms and conditions upon which such conversion will be effected, including,
without limitation, the initial conversion price or rate and the conversion
period as well as any applicable limitations on the ownership or
transferability of the Common Stock or Preferred Stock into which the Offered
Debt Securities are convertible; and
(xx) any other terms of the Offered Debt Securities not inconsistent
with the provisions of the applicable Indenture.
As described in each Prospectus Supplement relating to any particular
series of Debt Securities offered thereby, the Indenture under which such Debt
Securities are issued may contain covenants limiting: (i) the incurrence of
debt by the Company; (ii) the incurrence of debt by subsidiaries of the
Company; (iii) the making of certain payments by the Company and its
subsidiaries; (iv) business activities of the Company and its subsidiaries;
(v) the issuance of preferred stock of subsidiaries; (vi) asset dispositions;
(vii) transactions with affiliates; (viii) liens; and (ix) mergers and
consolidations involving the Company.
SENIOR DEBT SECURITIES
The payment of principal of, premium, if any, and interest on the
Senior Debt Securities will, to the extent and in the manner set forth in the
Senior Debt Indenture, rank pari passu in right of payment with all other
existing and future unsecured and unsubordinated obligations of the Company.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The Subordinated Debt Indenture provides that the Subordinated Debt
Securities are subordinate and junior in right of payment to all Senior
Indebtedness of the Company as provided in the Subordinated Debt Indenture. No
payment of principal of (including redemption payments), or interest on, the
Subordinated Debt Securities may be made (i) if any Senior Indebtedness is not
paid when due, any applicable grace period with respect to a default
thereunder has ended and such default has not been cured or waived, or (ii) if
the maturity of any Senior Indebtedness has been accelerated because of a
default. Upon any distribution of assets of the Company to creditors upon any
dissolution, winding up, liquidation or reorganization, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings,
all principal of, and premium, if any, and interest due or to become due on,
all Senior Indebtedness must be paid in full before the holders of the
Subordinated Debt Securities are entitled to receive or retain any payment. In
the event that, notwithstanding the foregoing, any payment or distribution of
cash, property or securities shall be received or collected by a holder of the
Subordinated Debt Securities in contravention of the foregoing provisions,
such payment or distribution shall be held for the benefit of and shall be
paid over to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instrument evidencing Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay in full all
Senior Indebtedness then due, after giving effect to any concurrent payment to
the holders of Senior Indebtedness. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Subordinated Debt
Securities will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Subordinated Debt Securities are
paid in full.
The term "Senior Indebtedness" shall mean in respect of the Company
(i) the principal, premium, if any, and interest in respect of (A)
indebtedness of such obligor for money borrowed and (B) indebtedness evidenced
by securities, bonds or other similar instruments issued by such obligor, (ii)
all capital lease obligations of such obligor, (iii) all obligations of such
obligor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such obligor and all obligations of such
obligor under any title retention agreement (but excluding trade accounts
payable and other similar obligations arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement of any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction, (v) all obligations of the type referred to in
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clauses (i) through (iv) above of other persons for the payment of which such
obligor is responsible or liable as obligor, guarantor or otherwise, and (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1)
any such indebtedness issued after the date of original issuance of the
Subordinated Debt Securities that is by its terms subordinated to or pari
passu with the Subordinated Debt Securities and (2) any indebtedness
(including all other debt securities and guarantees in respect of those debt
securities) initially issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Company that is, directly or
indirectly, a financing vehicle of the Company (a "Financing Entity") in
connection with the issuance by such Financing Entity of Convertible Preferred
Securities or other similar securities. Such Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior
Indebtedness the Company may issue.
CERTAIN COVENANTS
Unless otherwise provided in a Prospectus Supplements with respect to
a particular series of Offered Debt Securities, each of the Indentures will
contain certain covenants, including the ones summarized below, which
covenants will be applicable (unless they are waived or amended or unless the
Debt Securities are defeased, see "Defeasance" below) so long as any of the
Debt Securities are outstanding.
Limitation on Debt
The Company will not Incur any Debt, including Acquisition Debt,
unless, after giving effect to the incurrence of such Debt and the receipt and
application of the proceeds therefrom, the Fixed Charge Ratio (as defined in
the Indenture) of the Company would be equal to or greater than 2.0 to 1.
Notwithstanding the foregoing, the Company may Incur each and all of
the following: (i) Company Refinancing Debt, (ii) Debt of the Company to any
of its Restricted Subsidiaries or any Eligible Joint Venture that is expressly
subordinated in right of payment to the Senior Debt Securities of all series,
in the case of the Senior Debt Indenture or the Subordinated Debt Securities
of all series in the case of the Subordinated Debt Indenture, provided that
any transfer of such Debt by a Restricted Subsidiary or an Eligible Joint
Venture (other than to another Restricted Subsidiary or another Eligible Joint
Venture), or any transfer of the Company's ownership interest, or a portion
thereof, in such Restricted Subsidiary or such Eligible Joint Venture or the
interest, or a portion thereof, of Kiewit in a Permitted Joint Venture or an
Eligible Joint Venture (which transfer has the effect of causing such
Restricted Subsidiary or such Eligible Joint Venture to cease to be a
Restricted Subsidiary or an Eligible Joint Venture, as the case may be), will
be deemed to be an Incurrence of Debt that is subject to the provisions of
this covenant other than this clause (ii), (iii) Debt in an aggregate
principal amount not to exceed $100 million outstanding at any one time may be
issued under or in respect of Permitted Working Capital Facilities, (iv)
Non-Recourse Debt Incurred in respect of one or more Permitted Facilities in
which the Company has a direct or indirect interest, (v) Debt in respect of
Currency Protection Agreements or Interest Rate Protection Agreements, (vi)
Purchase Money Debt, provided that the amount of such Debt (net of any
original issue discount) does not exceed 90% of the fair market value of the
Property acquired, (vii) the Debt Securities and other Debt outstanding as of
the date of original issuance of any series of the Debt Securities (other than
Debt to the extent that it is extinguished, retired, defeased or repaid in
connection with the original issuance of any series of the Debt Securities),
including Debt that is Incurred in respect of interest or discount on such
Debt (or Redeemable Stock issued as dividends in respect of Redeemable Stock)
pursuant to the terms of the agreement or instrument that governs such Debt
(or such Redeemable Stock) as in effect on the date of original issuance of
any series of the Debt Securities and (viii) Debt in an aggregate principal
amount not to exceed $75 million outstanding at any one time.
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Limitation on Subsidiary Debt
The Company will not permit any of its Restricted Subsidiaries or any
Eligible Joint Venture, to Incur any Debt.
Notwithstanding the foregoing, each and all of the following Debt may
be Incurred by a Restricted Subsidiary or an Eligible Joint Venture: (i) Debt
outstanding as of the date of original issuance of any series of the Debt
Securities, (ii) Debt owed by a Restricted Subsidiary or an Eligible Joint
Venture to the Company or another Restricted Subsidiary of the Company or
another Eligible Joint Venture that either directly or indirectly owns all or
a portion of the Company's interest in, or directly or indirectly is owned by,
such Restricted Subsidiary, or such Eligible Joint Venture, as the case may
be, (iii) Non-Recourse Debt Incurred in respect of one or more Permitted
Facilities, provided that such Restricted Subsidiary or such Eligible Joint
Venture has a direct or an indirect interest (which may include Construction
Financing provided by the Company to the extent permitted under the covenant
described under "Limitation on Restricted Payments" below as a "Permitted
Investment") in one or more of such Permitted Facilities in respect of which
one or more Restricted Subsidiaries or Eligible Joint Ventures shall have a
direct or indirect interest, (iv) Subsidiary Refinancing Debt, (v) Acquired
Debt, (vi) Debt in respect of Currency Protection Agreements or Interest Rate
Protection Agreements, (vii) Permitted Funding Company Loans and (viii)
Permitted Facilities Debt, provided that at the time of Incurrence thereof and
after giving effect to the application of the proceeds thereof, the aggregate
principal amount of Permitted Facilities Debt shall not exceed 15% of total
consolidated Debt of the Company computed in accordance with GAAP.
Limitation on Restricted Payments
The Company will not, and will not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, directly or indirectly, make
any Restricted Payment unless at the time of such Restricted Payment and after
giving effect thereto (a) no Event of Default and no event that, after the
giving of notice or lapse of time or both, would become an Event of Default,
has occurred and is continuing, (b) the Company could Incur at least $1 of
Debt under the provision described in the first paragraph of "Limitation on
Debt" above and (c) the aggregate amount of all Restricted Payments made by
the Company, its Restricted Subsidiaries and the Eligible Joint Ventures (the
amount so made, if other than in cash, to be determined in good faith by the
Chief Financial Officer, as evidenced by an Officers' Certificate, or, if more
than $30 million, by the Board of Directors, as evidenced by a Board
resolution) after March 24, 1994, is less than the sum (without duplication)
of (i) 50% of the Adjusted Consolidated Net Income of the Company for the
period (taken as one accounting period) beginning on the first day of the
first fiscal quarter that begins after March 24, 1994 and ending on the last
day of the fiscal quarter immediately prior to the date of such calculation,
provided that if throughout any fiscal quarter within such period the Ratings
Categories applicable to the Debt Securities are rated Investment Grade by
Standard & Poor's Corporation and Moody's Investors Service, Inc. (or if both
do not make a rating of the Debt Securities publicly available, an equivalent
Rating Category is made publicly available by another Rating Agency), then
100% (instead of 50%) of the Adjusted Consolidated Net Income (if more than
zero) with respect to such fiscal quarter will be included pursuant to this
clause (i), and provided further that if Adjusted Consolidated Net Income for
such period is less than zero, then minus 100% of the amount of such net loss,
plus (ii) 100% of the aggregate net cash proceeds received by the Company from
and after March 24, 1994 from (A) the issuance and sale (other than to a
Restricted Subsidiary or an Eligible Joint Venture) of its Capital Stock
(excluding Redeemable Stock, but including Capital Stock other than Redeemable
Stock issued upon conversion of, or in exchange for Redeemable Stock or
securities other than its Capital Stock), (B) the issuance and sale or the
exercise of warrants, options and rights to purchase its Capital Stock (other
than Redeemable Stock) and (C) the issuance and sale of convertible Debt upon
the conversion of such convertible Debt into Capital Stock (other than
Redeemable Stock), but excluding the net proceeds from the issuance, sale,
exchange, conversion or other disposition of its Capital Stock (I) that is
convertible (whether at the option of the Company or the holder thereof or
upon the happening of any event) into (x) any security other than its Capital
Stock or (y) its Redeemable Stock or (II) that is Capital Stock referred to in
clauses (ii) and (iii) of the definition of "Permitted Payment", plus (iii)
the net reduction in Investments of the types specified in clauses (iv) and
(v) of the definition of "Restricted Payment" that result from payments of
interest on Debt, dividends, or repayment of
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loans or advances, the proceeds of the sale or disposition of the Investment
or other return of the amount of the original Investment to the Company, the
Restricted Subsidiary or the Eligible Joint Venture that made the original
Investment from the Person in which such Investment was made, provided that
(x) the aggregate amount of such payments will not exceed the amount of the
original Investment by the Company or such Restricted Subsidiary that reduced
the amount available pursuant to this clause (c) for making Restricted
Payments and (y) such payments may be added pursuant to this clause (iii) only
to the extent such payments are not included in the calculation of Adjusted
Consolidated Net Income, provided further that if Investments of the types
specified in clauses (iv) and (v) of the Definition of "Restricted Payment"
have been made in any Person and such Person thereafter becomes a Restricted
Subsidiary or an Eligible Joint Venture, then the aggregate amount of such
Investment (to the extent that it has reduced the amount available pursuant to
this clause (c) for making Restricted Payments), net of the amounts previously
added pursuant to this clause (iii), may be added to the amount available for
making Restricted Payments, plus (iv) an amount equal to the principal amount
of Debt of the Company extinguished in connection with the conversion into
Common Stock of the Company of the Company's 5% Convertible Subordinated
Debentures due 2000 and its 9.5% Convertible Subordinated Debenture due 2003.
The foregoing clause (c) will not prevent the payment of any dividend within
60 days after the date of its declaration if such dividend could have been
made on the date of its declaration without violation of the provisions of
this covenant.
None of the Company, any of its Restricted Subsidiaries or any
Eligible Joint Venture will be deemed to have made an Investment at the time
that a Person that is a Restricted Subsidiary of the Company or an Eligible
Joint Venture ceases to be a Restricted Subsidiary or an Eligible Joint
Venture (other than as a result of being designated as an Unrestricted
Subsidiary), although any subsequent Investment made by the Company, its
Restricted Subsidiaries and Eligible Joint Ventures in such Person will be
Investments that will be subject to the foregoing paragraph unless and until
such time as such Person becomes a Restricted Subsidiary or an Eligible Joint
Venture. Notwithstanding the foregoing, (i) the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary, in the manner provided in the
definition of "Unrestricted Subsidiary," will be an Investment that will be
subject to the foregoing paragraph and (ii) the transfer of the Company's
interest (or any portion thereof) in an entity that has been deemed to be an
Eligible Joint Venture, directly or indirectly, to an Unrestricted Subsidiary
will be an Investment (to the extent of the interest transferred) that will be
subject to the foregoing paragraph.
Restricted Payments are defined in the Indentures to exclude
Permitted Payments, which include Permitted Investments. See "Certain
Definitions" below.
Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, create or cause to become, or
as a result of the acquisition of any Person or Property, or upon any Person
becoming a Restricted Subsidiary or an Eligible Joint Venture, remain subject
to, any consensual encumbrance or consensual restriction of any kind on the
ability of any Restricted Subsidiary or any Eligible Joint Venture to (a) pay
dividends or make any other distributions permitted by applicable law on any
Capital Stock of such Restricted Subsidiary or such Eligible Joint Venture
owned by the Company, any other Restricted Subsidiary or any other Eligible
Joint Venture, (b) make payments in respect of any Debt owed to the Company,
any other Restricted Subsidiary of the Company or any Eligible Joint Venture,
(c) make loans or advances to the Company or to any other Restricted
Subsidiary of the Company or any other Eligible Joint Venture that is directly
or indirectly owned by such Restricted Subsidiary or such Eligible Joint
Venture or (d) transfer any of its Property to the Company or to any other
Restricted Subsidiary or any other Eligible Joint Venture that directly or
indirectly owns or is owned by such Restricted Subsidiary or such Eligible
Joint Venture, other than those encumbrances and restrictions created or
existing (i) on the date of the original issuance of any series of Debt
Securities, (ii) pursuant to the Indenture, (iii) in connection with the
Incurrence of any Debt permitted under the provisions described in clause
(iii) of the second paragraph of "Limitation on Subsidiary Debt" above,
provided that, in the case of Debt owed to Persons other than the Company, its
Restricted Subsidiaries and any Eligible Joint Venture, the Chief Executive
Officer or the Chief Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that such encumbrances or
restrictions are required to
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effect such financing and are not materially more restrictive, taken as a whole,
on the ability of the applicable Restricted Subsidiary or the applicable
Eligible Joint Venture to make the payments, distributions, loans, advances or
transfers referred to in clauses (a) through (d) above than encumbrances and
restrictions, taken as a whole, customarily accepted (or, in the absence of
any industry custom, reasonably acceptable) in comparable financings or
comparable transactions in the applicable jurisdiction, (iv) in connection
with the execution and delivery of an electric power or thermal energy
purchase contract, or other contract related to the output or product of, or
services rendered by one or more Permitted Facilities to which such Restricted
Subsidiary or such Eligible Joint Venture is a supplying party or other
contracts with customers, suppliers and contractors to which such Restricted
Subsidiary or such Eligible Joint Venture is a party and where such Restricted
Subsidiary or such Eligible Joint Venture is engaged, directly or indirectly,
in the development, design, engineering, procurement, construction,
acquisition, ownership, management or operation of one or more of such
Permitted Facilities, provided that the Chief Executive Officer or the Chief
Financial Officer of the Company determines in good faith, as evidenced by an
Officers' Certificate, that such encumbrances or restrictions are required to
effect such contracts and are not materially more restrictive, taken as a
whole, on the ability of the applicable Restricted Subsidiary or the
applicable Eligible Joint Venture to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through (d) above than
encumbrances and restrictions, taken as a whole, customarily accepted (or, in
the absence of any industry custom, reasonably acceptable) in comparable
financings or comparable transactions in the applicable jurisdiction, (v) in
connection with any Acquired Debt, provided that such encumbrance or
restriction was not incurred in contemplation of such Person becoming a
Restricted Subsidiary or an Eligible Joint Venture and provided further that
such encumbrance or restriction does not extend to any other Property of such
Person at the time it became a Restricted Subsidiary or an Eligible Joint
Venture, (vi) in connection with the Incurrence of any Debt permitted under
clause (iv) of the provision described in the second paragraph of "Limitation
on Subsidiary Debt" above, provided that, in the case of Debt owed to Persons
other than the Company and its Restricted Subsidiaries, the Chief Executive
Officer or the Chief Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that such encumbrances or
restrictions taken as a whole are not materially more restrictive than the
encumbrances and restrictions applicable to the Debt and/or equity being
exchanged or refinanced, (vii) customary non-assignment provisions in leases
or other contracts entered into in the ordinary course of business of the
Company, any Restricted Subsidiary or any Eligible Joint Venture, (viii) any
restrictions imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or Property of
any Restricted Subsidiary or Joint Venture that apply pending the closing of
such sale or disposition, (ix) in connection with Liens on the Property of
such Restricted Subsidiary or such Eligible Joint Venture that are permitted
by the covenant described under "Limitation on Liens" below but only with
respect to transfers referred to in clause (d) above, (x) in connection with
the Incurrence of any Debt permitted under clause (ii) of the provisions
described in the second paragraph of "Limitation on Subsidiary Debt" above or
(xi) in connection with the Incurrence of any Permitted Facilities Debt
permitted under clause (viii) of the provisions described in the second
paragraph of "Limitation on Subsidiary Debt" above, provided that any such
encumbrance or restriction relates only to those Restricted Subsidiaries or
Eligible Joint Ventures having a direct or indirect interest in the Permitted
Facilities in respect of which such Permitted Facilities Debt was Incurred.
Limitation on Dispositions
Subject to the covenant described under "Mergers, Consolidations and
Sales of Assets" below, the Company will not make, and will not permit any of
its Restricted Subsidiaries or any Eligible Joint Venture to make, any Asset
Disposition unless (i) the Company, the Restricted Subsidiary or the Eligible
Joint Venture, as the case may be, receives consideration at the time of each
such Asset Disposition at least equal to the fair market value of the Property
or securities sold or otherwise disposed of (to be determined in good faith by
the Chief Financial Officer, as evidenced by an Officers' Certificate, or, if
more than $30 million, by the Board of Directors, as evidenced by a Board
resolution), (ii) at least 85% of such consideration is received in cash or
Cash Equivalents or if less than 85%, the remainder of such consideration
consists of Property related to the business of the Company as described in
the first sentence of the covenant described under "Limitation on Business"
below, and (ii) unless otherwise required under the terms of Senior Debt, at
the Company's election, the Net Cash Proceeds are either (A) invested in the
business of the Company, any of its Restricted Subsidiaries or any Eligible
Joint Venture or (B) applied to the payment of any Debt of the Company or any
of its Restricted
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Subsidiaries or any Eligible Joint Venture (or as otherwise required under the
terms of such Debt), provided that, no such payment of Debt (x) under
Permitted Working Capital Facilities or any other revolving credit agreement
will count for this purpose unless the related loan commitment, standby
facility or the like will be permanently reduced by an amount equal to the
principal amount so repaid or (y) owed to the Company, a Restricted Subsidiary
thereof or an Eligible Joint Venture will count for this purpose, provided
further that such investment or such payment, as the case may be, must be made
within 365 days from the later of the date of such Asset Disposition or the
receipt by the Company, such Restricted Subsidiary or such Eligible Joint
Venture of the Net Cash Proceeds related thereto. Any Net Cash Proceeds from
Asset Dispositions that are not applied as provided in clause (A) or (B) of
the preceding sentence will constitute "Excess Proceeds." Excess Proceeds will
be applied, as described below, to make an offer (an "Offer") to purchase any
series of Debt Securities at a purchase price equal to 100% of the principal
thereof, plus accrued interest, if any, to the date of purchase.
Notwithstanding anything in the foregoing to the contrary, the
Company, its Restricted Subsidiaries and the Eligible Joint Ventures may
exchange with other Persons (i) Property that constitutes a Restricted
Subsidiary or an Eligible Joint Venture for Property that constitutes a
Restricted Subsidiary or an Eligible Joint Venture, (ii) Property that
constitutes a Restricted Subsidiary or an Eligible Joint Venture for Property
that does not constitute a Restricted Subsidiary or an Eligible Joint Venture,
(iii) Property that does not constitute a Restricted Subsidiary or an Eligible
Joint Venture for Property that does not constitute a Restricted Subsidiary or
an Eligible Joint Venture and (iv) Property that does not constitute a
Restricted Subsidiary or an Eligible Joint Venture for Property that
constitutes a Restricted Subsidiary or an Eligible Joint Venture, provided
that in each case the fair market value of the Property received is at least
equal to the fair market value of the Property exchanged as determined in good
faith by the Chief Financial Officer, as evidenced by an Officers'
Certificate, or, if more than $25 million, by the Board of Directors, as
evidenced by a Board resolution, provided that the Investment in the Property
received in the exchanges described in clauses (ii) and (iii) of the prior
sentence will be subject to the covenant described under "Limitation on
Restricted Payments" above. Notwithstanding anything in the foregoing to the
contrary, the Company may not, and will not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, make an Asset Disposition of
any of their interest in, or Property of, any of the Coso Project other than
for consideration consisting solely of cash.
To the extent that any or all of the Net Cash Proceeds of any Foreign
Asset Disposition are prohibited from (or delayed in) being repatriated to the
United States by applicable local law, the portion of such Net Cash Proceeds
so affected will not be required to be applied at the time provided above but
may be retained by any Restricted Subsidiary or any Eligible Joint Venture so
long, but only so long, as the applicable local law does not permit (or
delays) repatriation to the United States. If such Net Cash Proceeds are
transferred by the Restricted Subsidiary or Eligible Joint Venture that
conducted the Foreign Asset Disposition to another Restricted Subsidiary or
Eligible Joint Venture, the Restricted Subsidiary or Eligible Joint Venture
receiving such Net Cash Proceeds must not be directly or indirectly obligated
on any Debt owed to any Person other than the Company. The Company will take
or cause such Restricted Subsidiary or such Eligible Joint Venture to take all
actions required by the applicable local law to permit such repatriation
promptly. Once repatriation of any of such Net Cash Proceeds is permitted
under the applicable local law, repatriation will be effected immediately and
the repatriated Net Cash Proceeds will be applied in the manner set forth in
this covenant as if such Asset Disposition had occurred on the date of such
repatriation. In addition, if the Chief Financial Officer determines, in good
faith, as evidenced by an Officers' Certificate, that repatriation of any or
all of the Net Cash Proceeds of any Foreign Asset Disposition would have a
material adverse tax consequence to the Company, the Net Cash Proceeds so
affected may be retained outside of the United States by the applicable
Restricted Subsidiary or the applicable Eligible Joint Venture for so long as
such material adverse tax consequence would continue. Notwithstanding the
foregoing provisions of this paragraph to the contrary, if applicable local
law prohibits (or delays) the repatriation of Net Cash Proceeds of a Foreign
Asset Disposition but such local law does not prohibit the application of such
Net Cash Proceeds pursuant to the first sentence of the first paragraph of
this covenant, the Company may apply such Net Cash Proceeds pursuant to such
provision.
If the series of Debt Securities tendered pursuant to an Offer have
an aggregate purchase price that is less than the Excess Proceeds available
for the purchase of such Debt Securities, the Company may use the
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remaining Excess Proceeds for general corporate purposes without regard to the
provisions of this covenant. The Company will not be required to make an Offer
pursuant to this covenant if the Excess Proceeds available therefor are less
than $10 million, provided that the lesser amounts of such Excess Proceeds
will be carried forward and cumulated for each 36 consecutive month period for
purposes of determining whether an Offer is required with respect to any
Excess Proceeds of any subsequent Asset Dispositions. Any such lesser amounts
so carried forward and cumulated need not be segregated or reserved and may be
used for general corporate purposes, provided that such use will not reduce
the amount of cumulated Excess Proceeds or relieve the Company of its
obligation hereunder to make an Offer with respect thereto.
The Company will make an Offer by mailing to each Holder, with a copy
to the Trustee, within 30 days after the receipt of Excess Proceeds that cause
the cumulated Excess Proceeds to exceed $10 million, a written notice that
will specify the purchase date, which will not be less than 30 days nor more
than 60 days after the date of such notice (the "Purchase Date"), that will
contain certain information concerning the business of the Company that the
Company believes in good faith will enable the Holders to make an informed
decision and that will contain information concerning the procedures
applicable to the Offer (including, without limitation, the right of
withdrawal) and the effect of such Offer on the Debt Securities tendered.
Holders that elect to have their Debt Securities purchased will be required to
surrender such Debt Securities at least one Business Day prior to the Purchase
Date. If at the expiration of the Offer period the aggregate purchase price of
the series of Debt Securities properly tendered by Holders pursuant to the
Offer exceeds the amount of such Excess Proceeds, such series of Debt
Securities or portions of Debt Securities to be accepted for purchase will be
selected by the Trustee in such manner as the Trustee deems to be fair and
appropriate in the circumstances.
If the Company is prohibited by applicable law from making the Offer
or purchasing Debt Securities of any series thereunder, the Company need not
make an Offer pursuant to this covenant for so long as such prohibition is in
effect.
The Company will comply with all applicable tender offer rules,
including, without limitation, Rule 14e-1 under the Exchange Act, in
connection with an Offer.
Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, directly or indirectly, conduct
any business or enter into or permit to exist any transaction or series of
related transactions (including, but not limited to, the purchase, sale or
exchange of Property, the making of any Investment, the giving of any
Guarantee or the rendering of any service) with any Affiliate of the Company,
such Restricted Subsidiary or such Eligible Joint Venture, as the case may be,
unless (i) such business, transaction or series of related transactions is in
the best interest of the Company, such Restricted Subsidiary or such Eligible
Joint Venture, (ii) such business, transaction or series of related
transactions is on terms no less favorable to the Company, such Restricted
Subsidiary or such Eligible Joint Venture than those that could be obtained in
a comparable arm's length transaction with a Person that is not such an
Affiliate and (iii) with respect to such business, transaction or series of
related transactions that has a fair market value or involves aggregate
payments equal to, or in excess of, $10 million, such business, transaction or
series of transactions is approved by a majority of the Board of Directors
(including a majority of the disinterested directors), which approval is set
forth in a Board resolution delivered to the Trustee certifying that, in good
faith, the Board of Directors believes that such business, transaction or
series of transactions complies with clauses (i) and (ii) above.
Limitation on Liens
The Company may not Incur any Debt that is secured, directly or
indirectly, with, and the Company will not, and will not permit any of its
Restricted Subsidiaries or an Eligible Joint Venture to, grant a Lien on the
Property of the Company, its Restricted Subsidiaries or any Eligible Joint
Venture now owned or hereafter acquired unless contemporaneous therewith or
prior thereto the Debt Securities are equally and ratably secured
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except for (i) any such Debt secured by Liens existing on the Property of any
entity at the time such Property is acquired by the Company, any of its
Restricted Subsidiaries or any Eligible Joint Venture, whether by merger,
consolidation, purchase of such Property or otherwise, provided that such
Liens (x) are not created, incurred or assumed in contemplation of such
Property being acquired by the Company, any of its Restricted Subsidiaries or
any Eligible Joint Venture and (y) do not extend to any other Property of the
Company, any of its Restricted Subsidiaries or any Eligible Joint Venture,
(ii) any other Debt that is required by the terms thereof to be equally and
ratably secured as a result of the Incurrence of Debt that is permitted to be
secured pursuant to another clause of this covenant, (iii) Liens that are
granted in good faith to secure Debt (A) contemplated by clause (iv) of the
covenant described under "Limitation on Debt" above or (B) contemplated by
clauses (ii), (iii), (vi) and (viii) of the covenant described under
"Limitation on Subsidiary Debt" above, provided that, in the case of Debt owed
to a Person other than the Company or a Restricted Subsidiary, the Chief
Executive Officer or Chief Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that such Liens are required
in order to effect such financing and are not materially more restrictive,
taken as a whole, than Liens, taken as a whole, customarily accepted (or in
the absence of industry custom, reasonably acceptable) in comparable
financings or comparable transactions in the applicable jurisdiction, (iv)
Liens existing on the date of the original issuance of any series of the Debt
Securities, (v) Liens incurred to secure Debt incurred by the Company as
permitted by clause (vi) of the covenant described under "Limitation on Debt"
above, provided that such Liens may not cover any Property other than that
being purchased and improvements and additions thereto, (vi) Liens on any
Property of the Company securing Permitted Working Capital Facilities,
Guarantees thereof and any Interest Rate Protection Agreements or Currency
Protection Agreements, provided that such Liens may not extend to the Capital
Stock owned by the Company in any Restricted Subsidiary of the Company or any
Eligible Joint Venture, (vii) Liens in respect of extensions, renewals,
refundings or refinancings of any Debt secured by the Liens referred to in the
foregoing clauses, provided that the Liens in connection with such renewal,
extension, refunding or refinancing will be limited to all or part of the
specific property that was subject to the original Lien, (viii) Liens incurred
to secure obligations in respect of letters of credit, bankers' acceptances,
surety, bid, operating and performance bonds, performance guarantees or other
similar instruments or obligations (or reimbursement obligations with respect
thereto) (in each case, to the extent incurred in the ordinary course of
business), (ix) any Lien arising by reason of (A) any judgment, decree or
order of any court, so long as such Lien is being contested in good faith and
is appropriately bonded, and any appropriate legal proceedings that may have
been duly initiated for the review of such judgment, decree or order have not
been finally terminated or the period within which such proceedings may be
initiated has not expired, (B) taxes, duties, assessments, imposts or other
governmental charges that are not yet delinquent or are being contested in
good faith, (C) security for payment of worker's compensation or other
insurance, (D) security for the performance of tenders, contracts (other than
contracts for the payment of money) or leases, (E) deposits to secure public
or statutory obligations, or to secure permitted contracts for the purchase or
sale of any currency entered into in the ordinary course of business, (F) the
operation of law in favor of carriers, warehousemen, landlords, mechanics,
materialmen, laborers, employees or suppliers, incurred in the ordinary course
of business for sums that are not yet delinquent or are being contested in
good faith by negotiations or by appropriate proceedings that suspend the
collection thereof, (G) easements, rights-of-way, zoning and similar covenants
and restrictions and other similar encumbrances or title defects that do not
in the aggregate materially interfere with the ordinary conduct of the
business of the Company, any of its Restricted Subsidiaries or any Eligible
Joint Venture or (H) leases and subleases of real property that do not
interfere with the ordinary conduct of the business of the Company, any of its
Restricted Subsidiaries or any Eligible Joint Venture and that are made on
customary and usual terms applicable to similar properties, or (x) Liens, in
addition to the foregoing, that secure obligations not in excess of $5 million
in the aggregate.
Purchase of Debt Securities Upon a Change of Control
Upon the occurrence of a Change of Control, each Holder of the Debt
Securities of each series will have the right to require that the Company
repurchase such Holder's Debt Securities of such series at a purchase price in
cash equal to 101% of the principal thereof on the date of purchase plus
accrued interest, if any, to the date of purchase.
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The Change of Control provisions may not be waived by the Trustee or
by the Board of Directors, and any modification thereof must be approved by
each Holder. Nevertheless, the Change of Control provisions will not
necessarily afford protection to Holders, including protection against an
adverse effect on the value of the Debt Securities of any series, in the event
that the Company or its Subsidiaries Incur additional Debt, whether through
recapitalizations or otherwise.
Within 30 days following a Change of Control, the Company will mail a
notice to each Holder of the Debt Securities of each series, with a copy to
the Trustee, stating (1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such Holder's Debt
Securities at the purchase price described above (the "Change of Control
Offer"), (2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to such Change of Control),
(3) the purchase date (which will be not earlier than 30 days nor later than
60 days from the date such notice is mailed) (the "Purchase Date"), (4) and
thereafter interest on and such Debt Security will continue to accrue, (5) any
Debt Security properly tendered pursuant to the Change of Control Offer will
cease to accrue interest after the Purchase Date (assuming sufficient moneys
for the purchase thereof are deposited with the Trustee), (6) that Holders
electing to have a Debt Security of any series purchased pursuant to a Change
of Control Offer will be required to surrender the Debt Security of such
series, with the form entitled "Option of Holder To Elect Purchase" on the
reverse of the Debt Security completed, to the paying agent at the address
specified in the notice prior to the close of business on the fifth Business
Day prior to the Purchase Date, (7) that a Holder will be entitled to withdraw
such Holder's election if the paying agent receives, not later than the close
of business on the third Business Day (or such shorter periods as may be
required by applicable law) preceding the Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Debt Securities of such series the Holder delivered for
purchase, and a statement that such Holder is withdrawing his election to have
such Debt Securities of such series purchased and (8) that Holders that elect
to have their Debt Securities of any series purchased only in part will be
issued new Debt Securities having a principal amount equal to the portion of
the Debt Securities of the series that were surrendered but not tendered and
purchased.
On the Purchase Date, the Company will (i) accept for payment all
Debt Securities of any series or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Trustee money sufficient to pay
the purchase price of all Debt Securities of such series or portions thereof
so tendered for purchase and (iii) deliver or cause to be delivered to the
Trustee the Debt Securities of such series properly tendered together with an
Officers' Certificate identifying the Debt Securities of such series or
portions thereof tendered to the Company for purchase. The Trustee will
promptly mail, to the Holders of the Debt Securities of such series properly
tendered and purchased, payment in an amount equal to the purchase price, and
promptly authenticate and mail to each Holder a new Debt Security of the same
series having a principal amount equal to any portion of such Holder's Debt
Securities of such series that were surrendered but not tendered and
purchased, the Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Purchase Date.
If the Company is prohibited by applicable law from making the Change
of Control Offer or purchasing Debt Securities of any series thereunder, the
Company need not make a Change of Control Offer pursuant to this covenant for
so long as such prohibition is in effect.
The Company will comply with all applicable tender offer rules,
including, without limitation, Rule 14e-1 under the Exchange Act, in
connection with a Change of Control Offer.
Limitation on Business
The Company will, and will cause its Restricted Subsidiaries and the
Eligible Joint Ventures to, engage only in (i) the ownership, design,
engineering, procurement, construction, development, acquisition, operation,
servicing, management or disposition of Permitted Facilities, (ii) the
ownership, creation, development, acquisition, servicing, management or
disposition of Restricted Subsidiaries and Joint Ventures that own,
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construct, develop, design, engineer, procure, acquire, operate, service,
manage or dispose of Permitted Facilities, (iii) obtaining, arranging or
providing financing incident to any of the foregoing and (iv) other related
activities incident to any of the foregoing. The Company will not, and will
not permit any of its Restricted Subsidiaries or any Eligible Joint Venture
to, make any Investment or otherwise acquire any Property that is not directly
related to the business of the Company as described in the preceding sentence
(collectively, the "Ineligible Investments") other than as a part of an
Investment or an acquisition of Property that is predominantly and directly
related to the business of the Company as described above, and if the
aggregate fair market value of such Ineligible Investments in the aggregate
exceeds 20% (the "Percentage Limit") of the total assets of the Company and
its consolidated Restricted Subsidiaries (as determined in accordance with
GAAP) as determined in good faith by the Chief Financial Officer, as evidenced
by an Officers' Certificate, the Company, its Restricted Subsidiaries and the
Eligible Joint Ventures must cease acquiring any additional Ineligible
Investments and, within 18 months of the acquisition that caused the
Ineligible Assets to exceed the Percentage Limit, must return to compliance
with the Percentage Limit by disposing of Ineligible Assets or otherwise,
provided that such 18-month period may be extended up to an additional six
months if, despite the Company's active efforts during such 18-month period to
dispose of such Ineligible Investments or to otherwise come into compliance
with such Percentage Limit, the Company is unable to do so because of
regulatory restrictions or delays or adverse market conditions.
Limitation on Certain Sale-Leasebacks
The Company will not, and will not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, Incur or otherwise become
obligated with respect to any sale-leaseback (other than a sale-leaseback with
respect to a Permitted Facility that is Non-Recourse) unless, (i) (a) if
effected by the Company, the Company would be permitted to Incur such
obligation under the covenant described under "Limitation on Debt" above or,
(b) if effected by a Restricted Subsidiary or an Eligible Joint Venture, such
Restricted Subsidiary or such Eligible Joint Venture would be permitted to
Incur such obligation under the covenant described under "Limitation on
Subsidiary Debt" above, assuming for the purpose of this covenant and the
covenants described under "Limitation on Debt" and "Limitation on Subsidiary
Debt" that (x) the obligation created by such sale-leaseback is a Capitalized
Lease and (y) the Capitalized Lease Obligation with respect thereto is the
Attributable Value thereof, (ii) the Company, such Restricted Subsidiary or
such Eligible Joint Venture is permitted to grant a Lien with respect to the
property that is the subject of such sale-leaseback under the covenant
described under "Limitation on Liens" above, (iii) the proceeds of such
sale-leaseback are at least equal to the fair market value of the property
sold (determined in good faith as evidenced by an Officers' Certificate
delivered to the Trustee in respect of a transaction involving less than $25
million, or, if equal to or in excess of $25 million, by the Board of
Directors, as evidenced by a Board resolution) and (iv) the Net Cash Proceeds
of the sale-leaseback are applied pursuant to the covenants described under
"Limitation on Dispositions" above.
Limitation on Sale of Subsidiary Preferred Stock
The Company will not permit any of its Restricted Subsidiaries or any
Eligible Joint Venture to create, assume or otherwise cause or suffer to exist
any Preferred Stock except: (i) Preferred Stock outstanding on the date of the
Indentures, including Preferred Stock issued as dividends in respect of such
Preferred Stock pursuant to the terms of the agreement or instrument that
governs such Preferred Stock as in effect on the date of original issuance of
the Debt Securities, (ii) Preferred Stock held by the Company, a Restricted
Subsidiary of the Company or an Eligible Joint Venture, (iii) Preferred Stock
issued by a Person prior to the time (a) such Person becomes a Restricted
Subsidiary or an Eligible Joint Venture, (b) such Person merges with or into
another Restricted Subsidiary or another Eligible Joint Venture or (c) a
Restricted Subsidiary, or an Eligible Joint Venture merges with or into such
Person (in a transaction in which such Person becomes a Restricted Subsidiary
or an Eligible Joint Venture), provided that such Preferred Stock was not
issued in anticipation of such Person becoming a Restricted Subsidiary or an
Eligible Joint Venture or of such merger, (iv) Preferred Stock issued or
agreed to be issued by a Restricted Subsidiary or an Eligible Joint Venture in
connection with the financing of the construction, design, engineering,
procurement, equipping, developing, operation, ownership, management,
servicing or acquisition of one or more Permitted Facilities in which the
Company or one or more Restricted Subsidiaries or Eligible Joint Ventures has
a direct or indirect interest or the retirement of Debt or Preferred
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Stock secured by any such Permitted Facility or in order to enhance the
repatriation of equity, advances or income or the increase of after-tax funds
available for distribution to the owners of any such Permitted Facility, (v)
Preferred Stock issued or agreed to be issued by a Restricted Subsidiary or an
Eligible Joint Venture in satisfaction of legal requirements applicable to a
Permitted Facility or to maintain the ordinary course of conduct of such
Restricted Subsidiary's or such Eligible Joint Venture's business in the
applicable jurisdiction and (vi) Preferred Stock that is exchanged for, or the
proceeds of which are used to refinance, any Preferred Stock permitted to be
outstanding pursuant to clauses (i) through (v) hereof (or any extension,
renewal or refinancing thereof), having a liquidation preference not to exceed
the liquidation preference of the Preferred Stock so exchanged or refinanced
and having a redemption period no shorter than the redemption period of the
Preferred Stock so exchanged or refinanced.
EVENTS OF DEFAULT
An Event of Default, as defined in each of the Indentures and
applicable to any particular series of Debt Securities issued under such
Indenture is defined as being: (i) default as to the payment of principal, or
premium, if any, on any Debt Security of that series or as to any payment
required in connection with a Change of Control or an Asset Disposition, (ii)
default as to the payment of interest on any Debt Security of that series for
30 days after payment is due, (iii) failure to make an offer required under
either of the covenants described under "Limitation on Dispositions" or
"Purchase of Debt Securities Upon a Change of Control" above or a failure to
purchase Debt Securities of that series tendered in respect of such offer,
(iv) default in the performance, or breach, of any covenant, agreement or
warranty contained in the Indentures and the Debt Securities of that series
and such failure continues for 30 days after written notice is given to the
Company by the Trustee or the Holders of at least 25% in principal amount
outstanding of the Debt Securities of that series issued under such Indenture,
as provided in such Indenture, (v) default on any other Debt of the Company or
any Significant Subsidiary (other than Non-Recourse Debt of Significant
Subsidiaries) if either (x) such default results from failure to pay principal
of such Debt in excess of $25 million when due after any applicable grace
period or (y) as a result of such default, the maturity of such Debt has been
accelerated prior to its scheduled maturity and such default has not been
cured within the applicable grace period, and such acceleration has not been
rescinded, and the principal amount of such Debt, together with the principal
amount of any other Debt of the Company and its Significant Subsidiaries (not
including Non-Recourse Debt of the Significant Subsidiaries) that is in
default as to principal, or the maturity of which has been accelerated,
aggregates $25 million or more, (vi) the entry by a court of one or more
judgments or orders against the Company or any Significant Subsidiary for the
payment of money that in the aggregate exceeds $25 million (excluding the
amount thereof covered by insurance or by a bond written by a Person other
than an Affiliate of the Company), which judgments or orders have not been
vacated, discharged or satisfied or stayed pending appeal within 60 days from
the entry thereof, provided that such a judgment or order will not be an Event
of Default if such judgment or order does not require any payment by the
Company or any Significant Subsidiary, except to the extent that such judgment
is only against Property that secures Non-Recourse Debt that was permitted
under the Indentures, and the Company could, at the expiration of the
applicable 60 day period, after giving effect to such judgment or order and
the consequences thereof, Incur at least $1 of Debt under the provisions
described in the first paragraph of "Limited on Debt" above, and (vii) certain
events involving bankruptcy, insolvency or reorganization of the Company or
any of its Significant Subsidiaries.
The Indentures provide that the Trustee may withhold notice to the
Holders of any default (except in payment of principal of, premium, if any, or
interest on any series of Debt Securities and any payment required in
connection with a Change of Control or an Asset Disposition) if the Trustee
considers it in the interest of Holders to do so.
The Indentures provide that if an Event of Default with respect to
Debt Securities of any series at the time outstanding (other than an event of
bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary) has occurred and is continuing, either the Trustee or the Holders
of not less than 25% in principal amount of the Debt Securities of that series
issued under such Indenture then outstanding may declare the Default Amount of
all Debt Securities of that series to be due and payable immediately, but upon
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certain conditions such declaration may be annulled and past defaults (except,
unless theretofore cured, a default in payment of principal of, premium, if
any, or interest on the Debt Securities of that series or any payment required
in connection with a Change of Control or an Asset Disposition, as the case
may be) may be waived by the Holders of a majority in principal amount of the
Debt Securities of that series then outstanding. If an Event of Default due to
the bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary occurs, the Indenture provides that the Default Amount of all Debt
Securities of that series will become immediately due and payable.
The Holders of a majority in principal amount of the Debt Securities
of any series issued under such Indenture then outstanding will have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee under the Indenture with respect to the Debt
Securities of such series, subject to certain limitations specified in the
Indenture, provided that the Holders of Debt Securities of such series must
have offered to the Trustee reasonable indemnity against expenses and
liabilities. Each Indenture requires the annual filing by the Company with the
Trustee of a written statement as to compliance with the principal covenants
contained in the Indentures.
MODIFICATION
Each of the Indentures contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
principal amount of the Debt Securities at the time outstanding, to modify
such Indenture or any supplemental indenture or the rights of the Holders of
the series of Debt Securities issued under such Indenture, except that no such
modification may (i) extend the final maturity of any of the Debt Securities,
reduce the principal amount thereof, reduce any amount payable on redemption
or purchase thereof or impair the right of any Holder to institute suit for
the payment thereof or make any change in the covenants regarding a Change of
Control or an Asset Disposition or the related definitions without the consent
of the Holder of each of the series of Debt Securities so affected or (ii)
reduce the percentage of any series of Debt Securities, the consent of the
Holders of which is required for any such modification, without the consent of
the Holders of all series of Debt Securities issued under such Indenture then
outstanding.
MERGERS, CONSOLIDATIONS AND SALES OF ASSETS
The Company may not consolidate with, merge with or into, or transfer
all or substantially all its Property (as an entirety or substantially an
entirety in one transaction or a series of related transactions), to any
Person unless: (i) the Company will be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or to which the Property of the Company is transferred will
be a corporation organized and existing under the laws of the United States or
any State thereof or the District of Columbia and will expressly assume in
writing all the obligations of the Company, under the Indenture and the Debt
Securities, (ii) immediately after giving effect to such transaction, no Event
of Default and no event or condition that through the giving of notice or
lapse of time or both would become an Event of Default will have occurred and
be continuing, (iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or the surviving entity would be able to Incur at
least $1 of Debt under the provision described in the first paragraph of
"Limitation on Debt" above and (iv) the Net Worth of the Company or the
surviving entity, as the case may be, on a pro forma basis after giving effect
to such transaction (without giving effect to the fees and expenses incurred
in respect of such transaction), is not less than the Net Worth of the Company
immediately prior to such transaction.
None of the Company, any of its Restricted Subsidiaries or any
Eligible Joint Ventures may merge with or into, or be consolidated with, an
Unrestricted Subsidiary of the Company, except to the extent that such
Unrestricted Subsidiary has been designated a Restricted Subsidiary as
provided in the Indenture in advance of or in connection with such merger.
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DEFEASANCE AND DISCHARGE
Legal Defeasance
Each of the Indentures provides that the Company will be deemed to
have paid and will be discharged from any and all obligations in respect of
the Debt Securities of or within any series, on the 123rd day after the
deposit referred to below has been made (or immediately if an Opinion of
Counsel is delivered to the effect described in clause (B)(iii)(y) below), and
the provisions of such Indenture will cease to be applicable with respect to
such Debt Securities of such series (except for, among other matters, certain
obligations to register the transfer or exchange of such Debt Securities of
such series, to replace stolen, lost or mutilated Debt Securities of such
series, to maintain paying agencies and to hold monies for payment in trust)
if, among other things, (A) the Company has deposited with the Trustee, in
trust, money and/or U.S. Government Obligations that through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of, premium, if
any, and accrued interest on the applicable Debt Securities, on the respective
Stated Maturities of the Debt Securities or, if the Company makes arrangements
satisfactory to the Trustee for the redemption of the Debt Securities prior to
their Stated Maturity, on any earlier redemption date in accordance with the
terms of such Indenture and the applicable Debt Securities, (B) the Company
has delivered to the Trustee (i) either (x) an Opinion of Counsel to the
effect that Holders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit, defeasance and discharge and will be
subject to 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 and the Company had paid or redeemed such Debt
Securities on the applicable dates, which Opinion of Counsel must be based
upon a ruling of the Internal Revenue Service to the same effect or a change
in applicable federal income tax law or related Treasury regulations after the
date of the Indentures or (y) a ruling directed to the Trustee or the Company
received from the Internal Revenue Service to the same effect as the
aforementioned Opinion of Counsel, (ii) an Opinion of Counsel to the effect
that the creation of the defeasance trust does not violate the Investment
Company Act of 1940 and (iii) an Opinion of Counsel to the effect that either
(x) after the passage of 123 days following the deposit, the trust fund will
not be subject to the effect of Section 547 or 548 of the U.S. Bankruptcy Code
or Section 15 of the New York Debtor and Creditor Law or (y) based upon
existing precedents, if the matter were properly briefed, a court should hold
that the deposit of moneys and/or U.S. Government Obligations as provided in
clause (A) would not constitute a preference voidable under Section 547 or 548
of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law, (C) immediately after giving effect to such deposit on a pro forma basis,
no Event of Default, or event that after the giving of notice or lapse of time
or both would become an Event of Default, will have occurred and be continuing
on the date of such deposit or (unless an Opinion of Counsel is delivered to
the effect described in clause (B)(iii)(y) above) during the period ending on
the 123rd day after the date of such deposit and the deposit will not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which the
Company is bound and (D) if at such time the Debt Securities are listed on a
national securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Debt Securities will not be delisted
as a result of such deposit, defeasance and discharge.
Covenant Defeasance
The Indentures further provide that the provisions of clause (iii)
under "Mergers, Consolidations and Sales of Assets" and all the covenants
described herein under "Certain Covenants," clause (iv) under "Events of
Default" with respect to such covenants and with respect to clause (iii) under
"Mergers, Consolidations and Sales of Assets," clauses (i) and (iii) with
respect to certain offers for any series of Debt Securities required by
certain covenants and clauses (v) and (vi) under "Events of Default" will
cease to be applicable to the Company, its Restricted Subsidiaries and its
Eligible Joint Ventures upon the satisfaction of the provisions described in
clauses (A), (B)(ii) and (iii), (C) and (D) of the preceding paragraph and the
delivery by the Company to the Trustee of an Opinion of Counsel to the effect
that, among other things, the Holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and the defeasance of certain covenants and Events of Default and
will be subject to federal income tax on the same amount and in
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the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and the Company had paid or redeemed
such Debt Securities on the applicable dates.
Defeasance and Certain Other Events of Default
If the Company exercises its option to omit compliance with certain
covenants and provisions of the Indentures with respect to the Debt Securities
of any series as described in the immediately preceding paragraph and any
series of Debt Securities are declared due and payable because of the
occurrence of an Event of Default that remains applicable, the amount of money
and/or U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity or scheduled redemption, but may not be sufficient to pay
amounts due on such Debt Securities at the time of acceleration resulting from
such Event of Default. The Company will remain liable for such payments.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the law of the State of New York, including
Section 5-1401 of the New York General Obligations Law, but otherwise without
regard to conflict of laws rules.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in
the covenants and other provisions of each of the Indentures. Reference is
made to the Indentures for the full definitions of all such terms as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Debt" is defined to mean Debt Incurred by a Person prior to
the time (i) such Person becomes a Restricted Subsidiary of the Company or an
Eligible Joint Venture, (ii) such Person merges with or into a Restricted
Subsidiary of the Company or an Eligible Joint Venture, or (iii) a Restricted
Subsidiary of the Company or an Eligible Joint Venture merges with or into
such Person (in a transaction in which such Person becomes a Restricted
Subsidiary of the Company or an Eligible Joint Venture), provided that, after
giving effect to such transaction, any Non-Recourse Debt of such Person could
have been Incurred pursuant to clause (iii) of the provision described under
"Limitation on Subsidiary Debt", any Permitted Facilities Debt of such Person
could have been Incurred pursuant to clause (viii) of the provision described
under "Limitation on Subsidiary Debt" and would not otherwise violate any
other provision of the applicable Indenture, and all the other Debt of such
Person could have been Incurred by the Company at the time of such merger or
acquisition pursuant to the provision described in the first paragraph of
"Limitation on Debt" above, and provided further that such Debt was not
Incurred in connection with, or in contemplation of, such merger or such
Person becoming a Restricted Subsidiary of the Company or an Eligible Joint
Venture.
"Acquisition Debt" is defined to mean Debt of any Person existing at
the time such Person is merged into the Company or assumed in connection with
the acquisition of Property from any such Person (other than Property acquired
in the ordinary course of business), including Debt Incurred in connection
with, or in contemplation of, such Person being merged into the Company (but
excluding Debt of such Person that is extinguished, retired or repaid in
connection with such merger or acquisition).
"Adjusted Consolidated Net Income" is defined to mean for any period,
for any Person (the "Referenced Person") the aggregate Net Income (or loss) of
the Referenced Person and its consolidated Subsidiaries for such period
determined in conformity with GAAP, provided that the following items will be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the Net Income (or loss) of any other Person (other than a Subsidiary of
the Referenced Person) in which any third Person has an interest, except to
the extent of the amount of dividends or other distributions actually paid in
cash to the Referenced Person during such period, or after such period and on
or before the date of determination, by such Person in which the interest is
held, which dividends and distributions will be included in such computation,
(ii) solely for
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the purposes of calculating the amount of Restricted Payments that may be
made pursuant to the provision described in clause (c) of the first paragraph
of "Limitation on Restricted Payments" above (and in such case, except to the
extent includable pursuant to clause (i) above), the Net Income (if positive)
of any other Person accrued prior to the date it becomes a Subsidiary of the
Referenced Person or is merged into or consolidated with the Referenced Person
or any of its Subsidiaries or all or substantially all the Property of such
other Person is acquired by the Referenced Person or any of its Subsidiaries,
(iii) the Net Income (if positive) of any Subsidiary of the Referenced Person
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary to such Person or to any other Subsidiary of
such Net Income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary, (iv) any gains or
losses (on an after-tax basis) attributable to Asset Sales (except, solely for
the purposes of calculating the amount of Restricted Payments that may be made
pursuant to the provision described in clause (c) of the first paragraph of
"Limitation on Restricted Payments" above, any gains or losses of the Company
and any of its Restricted Subsidiaries from Asset Sales of Capital Stock of
Unrestricted Subsidiaries), (v) the cumulative effect of a change in
accounting principles and (vi) any amounts paid or accrued as dividends on
Preferred Stock of any Subsidiary of the Referenced Person that is not held by
the Referenced Person or another Subsidiary thereof. When the "Referenced
Person" is the Company, the foregoing references to "Subsidiaries" will be
deemed to refer to "Restricted Subsidiaries."
"Affiliate" of any Person is defined to mean any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") when used with respect to any
Person means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise. For the
purpose of the covenant described under "Limitation on Transactions with
Affiliates" above, the term "Affiliate" will be deemed to include only Kiewit,
any entity owning beneficially 10% or more of the Voting Stock of the Company
and their respective Affiliates other than the Restricted Subsidiaries and the
Eligible Joint Ventures and the other equity investors in the Restricted
Subsidiaries and the Eligible Joint Ventures (solely on account of their
investments in the Restricted Subsidiaries and the Eligible Joint Ventures),
and for such purpose such term also will be deemed to include the Unrestricted
Subsidiaries.
"Asset Acquisition" is defined to mean (i) an investment by the
Company, any of its Subsidiaries or any Joint Venture in any other Person
pursuant to which such Person will become a direct or indirect Subsidiary of
the Company or a Joint Venture or will be merged into or consolidated with the
Company, any of its Subsidiaries or any Joint Venture or (ii) an acquisition
by the Company, any of its Subsidiaries or any Joint Venture of the Property
of any Person other than the Company, any of its Subsidiaries or any Joint
Venture that constitutes substantially all of an operating unit or business of
such Person.
"Asset Disposition" is defined to mean any sale, transfer,
conveyance, lease or other disposition (including by way of merger,
consolidation or sale-leaseback) by the Company, any of its Restricted
Subsidiaries or any Eligible Joint Venture to any Person (other than to the
Company, a Restricted Subsidiary of the Company or an Eligible Joint Venture
and other than in the ordinary course of business) of any Property of the
Company, any of its Restricted Subsidiaries or any Eligible Joint Venture
other than any shares of Capital Stock of the Unrestricted Subsidiaries.
Notwithstanding the foregoing to the contrary, the term "Asset Disposition"
will include the sale, transfer, conveyance or other disposition of any shares
of Capital Stock of any Unrestricted Subsidiary to the extent that the Company
or any of its Restricted Subsidiaries or Eligible Joint Ventures made an
Investment in such Unrestricted Subsidiary pursuant to clause (vii) of the
definition of "Permitted Payment," and the Company will, and will cause each
of its Restricted Subsidiaries and Eligible Joint Ventures to, apply pursuant
to the covenant described under "Limitation on Dispositions" that portion of
the Net Cash Proceeds from the sale, transfer, conveyance or other disposition
of such Unrestricted Subsidiary that is equal to the portion of the total
Investment in such Unrestricted Subsidiary that is represented by the
Investment that was made pursuant to clause (vii) of the definition of
"Permitted Payment." For purposes of this
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definition, any disposition in connection with directors' qualifying shares or
investments by foreign nationals mandated by applicable law will not
constitute an Asset Disposition. In addition, the term "Asset Disposition"
will not include (i) any sale, transfer, conveyance, lease or other
disposition of the Capital Stock or Property of Restricted Subsidiaries or
Eligible Joint Ventures pursuant to the terms of any power sales agreements or
steam sales agreements to which such Restricted Subsidiaries or such Eligible
Joint Ventures are parties on the date of the original issuance of any series
of the Debt Securities or pursuant to the terms of any power sales agreements
or steam sales agreements, or other agreements or contracts that are related
to the output or product of, or services rendered by, a Permitted Facility as
to which such Restricted Subsidiary or such Eligible Joint Venture is the
supplying party, to which such Restricted Subsidiaries or such Eligible Joint
Ventures become a party after such date if the Chief Executive Officer or
Chief Financial Officer of the Company determines in good faith (evidenced by
an Officers' Certificate) that such provisions are customary (or, in the
absence of any industry custom, reasonably necessary) in order to effect such
agreements and are reasonable in light of comparable transactions in the
applicable jurisdiction, (ii) any sale, transfer, conveyance, lease or other
disposition of Property governed by the covenant described under "Mergers,
Consolidations and Sales of Assets" above, (iii) any sale, transfer,
conveyance, lease or other disposition of any Cash Equivalents, (iv) any
transaction or series of related transactions consisting of the sale,
transfer, conveyance, lease or other disposition of Capital Stock or Property
with a fair market value aggregating less than $5 million and (v) any
Permitted Payment or any Restricted Payment that is permitted to be made
pursuant to the covenant described under "Limitation on Restricted Payments"
above. The term "Asset Disposition" also will not include (i) the grant of or
realization upon a Lien permitted under the covenant described under
"Limitation on Liens" above or the exercise of remedies thereunder, (ii) a
sale-leaseback transaction involving substantially all the Property
constituting a Permitted Facility pursuant to which a Restricted Subsidiary of
the Company or an Eligible Joint Venture sells the Permitted Facility to a
Person in exchange for the assumption by that Person of the Debt financing the
Permitted Facility and the Restricted Subsidiary or the Eligible Joint Venture
leases the Permitted Facility from such Person, (iii) dispositions of Capital
Stock, contract rights, development rights and resource data made in
connection with the initial development of Permitted Facilities, or the
formation or capitalization of Restricted Subsidiaries or Eligible Joint
Ventures in respect of the initial development of Permitted Facilities, in
respect of which only an insubstantial portion of the prospective Construction
Financing that would be required to commence commercial operation has been
funded or (iv) transactions determined in good faith by the Chief Financial
Officer, as evidenced by an Officers' Certificate, made in order to enhance
the repatriation of Net Cash Proceeds for a Foreign Asset Disposition or in
order to increase the after-tax proceeds thereof available for immediate
distribution to the Company. Any Asset Disposition that results from the bona
fide exercise by any governmental authority of its claimed or actual power of
eminent domain need not comply with the provisions of clauses (i) and (ii) of
the covenant described under "Limitation on Dispositions" above. Any Asset
Disposition that results from a casualty loss need not comply with the
provisions of clause (i) of the covenant described under "Limitation on
Dispositions" above.
"Asset Sale" is defined to mean the sale or other disposition by the
Company, any of its Subsidiaries or any Joint Venture (other than to the
Company, another Subsidiary of the Company or another Joint Venture) of (i)
all or substantially all of the Capital Stock of any Subsidiary of the Company
or any Joint Venture or (ii) all or substantially all of the Property that
constitutes an operating unit or business of the Company, any of its
Subsidiaries or any Joint Venture.
"Attributable Value" means, as to a Capitalized Lease Obligation
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the capitalized amount thereof that would
appear on the face of a balance sheet of such Person in accordance with GAAP.
"Average Life" is defined to mean, at any date of determination with
respect to any Debt security or Preferred Stock, the quotient obtained by
dividing (i) the sum of the product of (A) the number of years from such date
of determination to the dates of each successive scheduled principal or
involuntary liquidation value payment of such Debt security or Preferred
Stock, respectively, multiplied by (B) the amount of such principal or
involuntary liquidation value payment by (ii) the sum of all such principal or
involuntary liquidation value payments.
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"Board of Directors" is defined to mean either the Board of Directors
of the Company or any duly authorized committee of such Board.
"Business Day" is defined to mean a day that, in the city (or in any
of the cities, if more than one) where amounts are payable in respect of the
Debt Securities, is neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive order
to close.
"Capital Stock" is defined to mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) in, or interests (however
designated) in, the equity of such Person that is outstanding or issued on or
after the date of Indenture, including, without limitation, all Common Stock
and Preferred Stock and partnership and joint venture interests in such
Person.
"Capitalized Lease" is defined to mean, as applied to any Person, any
lease of any Property of which the discounted present value of the rental
obligations of such Person as lessee, in conformity with GAAP, is required to
be capitalized on the balance sheet of such Person, and "Capitalized Lease
Obligation" means the rental obligations, as aforesaid, under such lease.
"Cash Equivalent" is defined to mean any of the following: (i)
securities issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof), (ii) time deposits and certificates of deposit of any commercial
bank organized in the United States having capital and surplus in excess of
$500,000,000 or any commercial bank organized under the laws of any other
country having total assets in excess of $500,000,000 with a maturity date not
more than two years from the date of acquisition, (iii) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clauses (i) or (v) that was entered into with any bank meeting
the qualifications set forth in clause (ii) or another financial institution
of national reputation, (iv) direct obligations issued by any state or other
jurisdiction of the United States of America or any other country or any
political subdivision or public instrumentality thereof maturing, or subject
to tender at the option of the holder thereof, within 90 days after the date
of acquisition thereof and, at the time of acquisition, having a rating of A
from Standard & Poor's Corporation ("S&P") or A-2 from Moody's Investors
Service, Inc. ("Moody's") (or, if at any time neither S&P nor Moody's may be
rating such obligations, then from another nationally recognized rating
service acceptable to the Trustee), (v) commercial paper issued by (a) the
parent corporation of any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 or any commercial bank
organized under the laws of any other country having total assets in excess of
$500,000,000, and (b) others having one of the two highest ratings obtainable
from either S&P or Moody's (or, if at any time neither S&P nor Moody's may be
rating such obligations, then from another nationally recognized rating
service acceptable to the Trustee) and in each case maturing within one year
after the date of acquisition, (vi) overnight bank deposits and bankers'
acceptances at any commercial bank organized in the United States having
capital and surplus in excess of $500,000,000 or any commercial bank organized
under the laws of any other country having total assets in excess of
$500,000,000, (vii) deposits available for withdrawal on demand with any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or any commercial bank organized under the laws of any
other country having total assets in excess of $500,000,000, (viii)
investments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vi) and (ix), and
(ix) auction rate securities or money market preferred stock having one of the
two highest ratings obtainable from either S&P or Moody's (or, if at any time
neither S&P nor Moody's may be rating such obligations, then from another
nationally recognized rating service acceptable to the Trustee).
"Change of Control" is defined to mean the occurrence of one or more
of the following events:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than Kiewit, is or becomes the
beneficial owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company (for the purposes of
this clause (i), any person will be deemed to beneficially own any
Voting Stock of any
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corporation (the "specified corporation") held by any other
corporation (the "parent corporation"), if such person "beneficially
owns" (as so defined), directly or indirectly, more than 35% of the
voting power of the Voting Stock of such parent corporation) and
Kiewit "beneficially owns" (as so defined), directly or indirectly,
in the aggregate a lesser percentage of the voting power of the
Voting Stock of the Company and does not have the right or ability by
voting power, contract or otherwise to elect or designate for
election a majority of the board of directors of the Company;
(ii) during any one-year period, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors elected by such Board of
Directors or nominated for election by the shareholders of the
Company by a vote of at least a majority of the directors of the
Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office, unless a majority
of such new directors were elected or appointed by Kiewit; or
(iii) the Company or its Restricted Subsidiaries sell,
convey, assign, transfer, lease or otherwise dispose of all or
substantially all the Property of the Company and the Restricted
Subsidiaries taken as a whole;
provided that with respect to the foregoing subparagraphs (i), (ii) and (iii),
a Change of Control will not be deemed to have occurred unless and until a
Rating Decline has occurred as well.
"Common Stock" is defined to mean with respect to any Person, Capital
Stock of such Person that does not rank prior, as to the payment of dividends
or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Company Refinancing Debt" is defined to mean Debt issued in exchange
for, or the proceeds of which are used to refinance (including to purchase),
outstanding Debt Securities or other Debt of the Company Incurred pursuant to
clauses (i), (iv), and (vii) of "Limitation on Debt" and Debt Incurred
pursuant to the first paragraph under "Limitation on Debt" in an amount (or,
if such new Debt provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or refinanced
(plus accrued interest and all fees, premiums (in excess of the accreted
value) and expenses related to such exchange or refinancing), for which
purpose the amount so exchanged or refinanced will be deemed to equal the
lesser of (x) the principal amount of the Debt so exchanged or refinanced and
(y) if the Debt being exchanged or refinanced was issued with an original
issue discount, the accreted value thereof (as determined in accordance with
GAAP) at the time of such exchange or refinancing, provided that (A) such Debt
will be subordinated in right of payment to the Senior Debt Securities in the
case of the Senior Debt Indenture and the Subordinated Debt Securities in the
case of the Subordinated Debt Indenture at least to the same extent, if any,
as the Debt so exchanged or refinanced is subordinated to the Senior Debt
Securities in the case of the Senior Debt Indenture and the Subordinated Debt
Securities in the case of the Subordinated Debt Indenture, (B) such Debt win
be Non-Recourse if the Debt so exchanged or refinanced is Non-Recourse, (C)
the Average Life of the new Debt will be equal to or greater than the Average
Life of the Debt to be exchanged or refinanced and (D) the final Stated
Maturity of the new Debt will not be sooner than the earlier of the final
Stated Maturity of the Debt to be exchanged or refinanced or six months after
the final Stated Maturity of the Debt Securities, provided that if such new
Debt refinances any series of the Debt Securities in part only, the final
Stated Maturity of such new Debt must be at least six months after the final
Stated Maturity of such series of Debt Securities.
"Consolidated EBITDA" of any Person for any period is defined to mean
the Adjusted Consolidated Net Income of such Person, plus, only to the extent
deducted in computing Adjusted Consolidated Net Income and without
duplication, (i) income taxes, excluding income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
Asset Sales, all determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, (ii) Consolidated Fixed
Charges, (iii)
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depreciation and amortization expense, all determined on a consolidated basis
for such Person and its consolidated Subsidiaries in accordance with GAAP and
(iv) all other non-cash items reducing Adjusted Consolidated Net Income for
such period, all determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, and less all non-cash items
increasing Adjusted Consolidated Net Income during such period, provided that
depreciation and amortization expense of any Subsidiary of such Person and any
other non-cash item of any Subsidiary of such Person that reduces Adjusted
Consolidated Net Income will be excluded (without duplication) in computing
Consolidated EBITDA, except to the extent that the positive cash flow
associated with such depreciation and amortization expense and other non-cash
items is actually distributed in cash to such Person during such period,
provided further that as applied to the Company, cash in respect of
depreciation and amortization and other non-cash items of Restricted
Subsidiaries and Eligible Joint Ventures may be deemed to have been
distributed or paid to the Company to the extent that such cash (I) is or was
under the exclusive dominion and control of such Restricted Subsidiary or such
Eligible Joint Venture and is or was free and clear of the Lien of any other
Person, (II) is or was immediately available for distribution and (III) could
be or could have been repatriated to the United States by means that are both
lawful and commercially reasonable, provided that the amount of the cash
deemed by this sentence to have been distributed or paid will be reduced by
the amount of tax that would have been payable with respect to the
repatriation thereof, provided further that any cash that enables the
recognition of depreciation and amortization and other non-cash items pursuant
to this sentence may not be used to enable the recognition of depreciation and
amortization and other non-cash items with respect to any prior or subsequent
period, regardless of whether such cash is distributed to the Company, and
provided further that the recognition of any depreciation and amortization and
other non-cash items as a result of this sentence will be determined in good
faith by the Chief Financial Officer, as evidenced by an Officers' Certificate
that will set forth in reasonable detail the relevant facts and assumptions
supporting such recognition. When the "Person" referred to above is the
Company, the foregoing references to "Subsidiaries" will be deemed to refer to
"Restricted Subsidiaries."
"Consolidated Fixed Charges" of any Person is defined to mean, for
any period, the aggregate of (i) Consolidated Interest Expense, (ii) the
interest component of Capitalized Leases, determined on a consolidated basis
for such Person and its consolidated Subsidiaries in accordance with GAAP,
excluding any interest component of Capitalized Leases in respect of that
portion of a Capitalized Lease Obligation of a Subsidiary that is Non-Recourse
to such Person, and (iii) cash and non-cash dividends due (whether or not
declared) on the Preferred Stock of any Subsidiary of such Person held by any
Person other than such Person and any Redeemable Stock of such Person or any
Subsidiary of such Person. When the "Person" referred to above is the Company,
the foregoing references to "Subsidiaries" will be deemed to refer to
"Restricted Subsidiaries."
"Consolidated Interest Expense" of any Person is defined to mean, for
any period, the aggregate interest expense in respect of Debt (including
amortization of original issue discount and non-cash interest payments or
accruals) of such Person and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, including all commissions,
discounts, other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs associated with Interest Rate
Protection Agreements and Currency Protection Agreements and any amounts paid
during such period in respect of such interest expense, commissions,
discounts, other fees and charges that have been capitalized, provided that
Consolidated Interest Expense of the Company will not include any interest
expense (including all commissions, discounts, other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements or Currency
Protection Agreements) in respect of that portion of any Debt that is
Non-Recourse, and provided further that Consolidated Interest Expense of the
Company in respect of a Guarantee by the Company of Debt of another Person
will be equal to the commissions, discounts, other fees and charges that would
be due with respect to a hypothetical letter of credit issued under a bank
credit agreement that can be drawn by the beneficiary thereof in the amount of
the Debt so guaranteed if (i) the Company is not actually making directly or
indirectly interest payments on such Debt and (ii) GAAP does not require the
Company on an unconsolidated basis to record such Debt as a liability of the
Company. When the "Person" referred to above is the Company, the foregoing
references to "Subsidiaries" will be deemed to refer to "Restricted
Subsidiaries."
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"Construction Financing" is defined to mean the debt and/or equity
financing provided (over and above the owners' equity investment) to permit
the acquisition, development, design, engineering, procurement, construction
and equipping of a Permitted Facility and to enable it to commence commercial
operations, provided that Construction Financing may remain outstanding after
the commencement of commercial operations of a Permitted Facility, without any
increase in the amount of such financing, and such Construction Financing will
not cease to be Construction Financing.
"Currency Protection Agreement" is defined to mean, with respect to
any Person, any foreign exchange contract, currency swap agreement or other
similar agreement or arrangement intended to protect such Person against
fluctuations in currency values to or under which such Person is a party or a
beneficiary on the date of the Indenture or becomes a party or a beneficiary
thereafter.
"Debt" is defined to mean, with respect to any Person, at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit, bankers' acceptances, surety, bid,
operating and performance bonds, performance guarantees or other similar
instruments or obligations (or reimbursement obligations with respect thereto)
(except, in each case, to the extent incurred in the ordinary course of
business), (iv) all obligations of such Person to pay the deferred purchase
price of property or services, except Trade Payables, (v) the Attributable
Value of all obligations of such Person as lessee under Capitalized Leases,
(vi) all Debt of others secured by a Lien on any Property of such Person,
whether or not such Debt is assumed by such Person, provided that, for
purposes of determining the amount of any Debt of the type described in this
clause, if recourse with respect to such Debt is limited to such Property, the
amount of such Debt will be limited to the lesser of the fair market value of
such Property or the amount of such Debt, (vii) all Debt of others Guaranteed
by such Person to the extent such Debt is Guaranteed by such Person, (viii)
all Redeemable Stock valued at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends and (ix) to the
extent not otherwise included in this definition, all net obligations of such
Person under Currency Protection Agreements and Interest Rate Protection
Agreements.
For purposes of determining any particular amount of Debt that is or
would be outstanding, Guarantees of, or obligations with respect to letters of
credit or similar instruments supporting (to the extent the foregoing
constitutes Debt), Debt otherwise included in the determination of such
particular amount will not be included. For purposes of determining compliance
with the Indenture, in the event that an item of Debt meets the criteria of
more than one of the types of Debt described in the above clauses, the
Company, in its sole discretion, will classify such item of Debt and only be
required to include the amount and type of such Debt in one of such clauses.
"Default Amount" is defined to mean the principal amount plus
accrued interest.
"Eligible Joint Venture" is defined to mean a Joint Venture (other
than a Subsidiary) (i) that is or will be formed with respect to the
construction, development, acquisition, servicing, ownership, operation or
management of one or more Permitted Facilities and (ii) in which the Company
and Kiewit together, directly or indirectly, own at least 50% of the Capital
Stock therein (of which the Company must own at least half (in any event not
less than 25% of the total outstanding Capital Stock)) and (iii) in respect of
which the Company alone or in combination with Kiewit, directly or indirectly,
(a) controls, by voting power, board or management committee membership, or
through the provisions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or management agreement
or otherwise, the management and operation of the Joint Venture or any
Permitted Facilities of the Joint Venture or (b) otherwise has significant
influence over the management or operation of the Joint Venture or any
Permitted Facility of the Joint Venture in all material respects (significant
influence includes, without limitation, the right to control or veto any
material act or decision) in connection with such management or operation. Any
Joint Venture that is an Eligible Joint Venture pursuant to this definition
because of the ownership of Capital Stock therein by Kiewit will cease to be
an Eligible Joint Venture if (x) Kiewit disposes of any securities issued by
the Company and, as a result of such disposition, Kiewit becomes the
beneficial owner (as such term is defined under Rule 13d-3 or
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any successor rule or regulation promulgated under the Exchange Act) of less
than 25% of the outstanding shares of Voting Stock of the Company or (y) (I)
as a result of any action other than a disposition of securities by Kiewit,
Kiewit becomes the beneficial owner of less than 25% of the outstanding shares
of Voting Stock of the Company and (II) thereafter Kiewit disposes of any
securities issued by the Company as a result of which the beneficial ownership
by Kiewit of the outstanding Voting Stock of the Company is further reduced,
provided that thereafter such Joint Venture may become an Eligible Joint
Venture if Kiewit becomes the beneficial owner of at least 25% of the
outstanding shares of Voting Stock of the Company and the other conditions set
forth in this definition are fulfilled.
"Fixed Charge Ratio" is defined to mean the ratio, on a pro forma
basis, of (i) the aggregate amount of Consolidated EBITDA of any Person for
the Reference Period immediately prior to the date of the transaction giving
rise to the need to calculate the Fixed Charge Ratio (the "Transaction Date")
to (ii) the aggregate Consolidated Fixed Charges of such Person during such
Reference Period, provided that for purposes of such computation, in
calculating Consolidated EBITDA and Consolidated Fixed Charges, (1) the
Incurrence of the Debt giving rise to the need to calculate the Fixed Charge
Ratio and the application of the proceeds therefrom (including the retirement
or defeasance of Debt) will be assumed to have occurred on the first day of
the Reference Period, (2) Asset Sales and Asset Acquisitions that occur during
the Reference Period or subsequent to the Reference Period and prior to the
Transaction Date (but including any Asset Acquisition to be made with the Debt
Incurred pursuant to (1) above) and related retirement of Debt pursuant to an
Offer (in the amount of the Excess Proceeds with respect to which such Offer
has been made or would be made on the Transaction Date if the purchase of Debt
Securities pursuant to such Offer has not occurred on or before the
Transaction Date) will be assumed to have occurred on the first day of the
Reference Period, (3) the Incurrence of any Debt during the Reference Period
or subsequent to the Reference Period and prior to the Transaction Date and
the application of the proceeds therefrom (including the retirement or
defeasance of other Debt) will be assumed to have occurred on the first day of
such Reference Period, (4) Consolidated Interest Expense attributable to any
Debt (whether existing or being Incurred) computed on a pro forma basis and
bearing a floating interest rate will be computed as if the rate in effect on
the date of computation had been the applicable rate for the entire period
unless the obligor on such Debt is a party to an Interest Rate Protection
Agreement (that will remain in effect for the twelve month period after the
Transaction Date) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) will be used
and (5) there will be excluded from Consolidated Fixed Charges any
Consolidated Fixed Charges related to any amount of Debt that was outstanding
during or subsequent to the Reference Period but is not outstanding on the
Transaction Date, except for Consolidated Fixed Charges actually incurred with
respect to Debt borrowed (as adjusted pursuant to clause (4)) (x) under a
revolving credit or similar arrangement to the extent the commitment
thereunder remains in effect on the Transaction Date or (y) pursuant to the
provision described in clause (iii) in the second paragraph of "Limitation on
Debt" above. For the purpose of making this computation, Asset Sales and Asset
Acquisitions that have been made by any Person that has become a Restricted
Subsidiary of the Company or an Eligible Joint Venture or been merged with or
into the Company or any Restricted Subsidiary of the Company or an Eligible
Joint Venture during the Reference Period, or subsequent to the Reference
Period and prior to the Transaction Date, will be calculated on a pro forma
basis, as will be all the transactions contemplated by the calculations
referred to in clauses (1) through (5) above with respect to the Persons or
businesses that were the subject of such Asset Sales and Asset Dispositions,
assuming such Asset Sales or Asset Acquisitions occurred on the first day of
the Reference Period.
"Foreign Asset Disposition" means an Asset Disposition in respect of
the Capital Stock or Property of a Restricted Subsidiary of the Company or an
Eligible Joint Venture to the extent that the proceeds of such Asset
Disposition are received by a Person subject in respect of such proceeds to
the tax laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" is defined to mean generally accepted accounting principles in
the U.S. as in effect as of the date of the Indenture, applied on a basis
consistent with the principles, methods, procedures and practices employed in
the preparation of the Company's audited financial statements, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board
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or in such other statements by such other entity as approved by a significant
segment of the accounting profession.
"Guarantee" is defined to mean any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any Debt
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt of such other Person (whether arising by virtue of partnership
arrangements (other than solely by reason of being a general partner of a
partnership), or by agreement to keep-well, to purchase assets, goods,
securities or services or to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Debt of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part), provided
that the term "Guarantee" will not include endorsements for collection or
deposit in the ordinary course of business or the grant of a Lien in
connection with any Non-Recourse Debt. The term "Guarantee" used as a verb has
a corresponding meaning.
"Holder", "holder of Debt Securities" and other similar terms are
defined to mean the registered holder of any Debt Security.
"Incur" is defined to mean with respect to any Debt, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with
respect to, or become responsible for, the payment of, contingently or
otherwise, such Debt, provided that neither the accrual of interest (whether
such interest is payable in cash or kind) nor the accretion of original issue
discount will be considered an Incurrence of Debt. The term "Incurrence" has a
corresponding meaning.
"Interest Rate Protection Agreement" is defined to mean, with respect
to any Person, any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement intended to protect
such Person against fluctuations in interest rates to or under which such
Person or any of its Subsidiaries is a party or a beneficiary on the date of
the Indenture or becomes a party or a beneficiary thereafter.
"Investment" in a Person is defined to mean any investment in, loan
or advance to, Guarantee on behalf of, directly or indirectly, or other
transfer of assets to such Person (other than sales of products and services
in the ordinary course of business).
"Investment Grade" is defined to mean with respect to the Debt
Securities, (i) in the case of S&P, a rating of at least BBB-, (ii) in the
case of Moody's, a rating of at least Baa3, and (iii) in the case of a Rating
Agency other than S&P or Moody's, the equivalent rating, or in each case, any
successor, replacement or equivalent definition as promulgated by S&P, Moody's
or other Rating Agency as the case may be.
"Joint Venture" is defined to mean a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or other legal
form.
"Kiewit" is defined to mean and include Kiewit Energy Company and any
other Subsidiary of Peter Kiewit Sons', Inc., Kiewit Construction Group Inc.
or Kiewit Diversified Group, Inc.
"Lien" is defined to mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such Property, but will not include any partnership, joint
venture, shareholder, voting trust or other similar governance agreement with
respect to Capital Stock in a Subsidiary or Joint Venture. For purposes of the
Indentures, the Company will be deemed to own subject to a Lien any Property
that it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
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"Net Cash Proceeds" from an Asset Disposition is defined to mean cash
payments received (including any cash payments received by way of a payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received (including any cash received upon sale or disposition of
any such note or receivable), excluding any other consideration received in
the form of assumption by the acquiring Person of Debt or other obligations
relating to the Property disposed of in such Asset Disposition or received in
any form other than cash) therefrom, in each case, net of (i) all legal, title
and recording tax expenses, commissions and other fees and expenses of any
kind (including consent and waiver fees and any applicable premiums, earn-out
or working interest payments or payments in lieu or in termination thereof)
incurred, (ii) all federal, state, provincial, foreign and local taxes and
other governmental charges required to be accrued as a liability under GAAP
(a) as a consequence of such Asset Disposition, (b) as a result of the
repayment of any Debt in any jurisdiction other than the jurisdiction where
the Property disposed of was located or (c) as a result of any repatriation of
any proceeds of such Asset Disposition, (iii) a reasonable reserve for the
after-tax cost of any indemnification payments (fixed and contingent)
attributable to seller's indemnities to the purchaser undertaken by the
Company, any of its Restricted Subsidiaries or any Eligible Joint Venture in
connection with such Asset Disposition (but excluding any payments that by the
terms of the indemnities will not, under any circumstances, be made during the
term of the Debt Securities), (iv) all payments made on any Debt that is
secured by such Property, in accordance with the terms of any Lien upon or
with respect to such Property, or that must by its terms or by applicable law
or in order to obtain a required consent or waiver be repaid out of the
proceeds from or in connection with such Asset Disposition, and (v) all
distributions and other payments made to holders of Capital Stock of
Restricted Subsidiaries or Eligible Joint Ventures (other than the Company or
its Restricted Subsidiaries) as a result of such Asset Disposition.
"Net Income" of any Person for any period is defined to mean the net
income (loss) of such Person for such period, determined in accordance with
GAAP, except that extraordinary and non-recurring gains and losses as
determined in accordance with GAAP will be excluded.
"Net Worth" of any Person is defined to mean, as of any date, the
aggregate of capital, surplus and retained earnings (including any cumulative
currency translation adjustment) of such Person and its consolidated
Subsidiaries as would be shown on a consolidated balance sheet of such Person
and its consolidated Subsidiaries prepared as of such date in accordance with
GAAP When the "Person" referred to above is the Company, the foregoing
references to "Subsidiaries" will be deemed to refer to "Restricted
Subsidiaries."
"Non-Recourse", as applied to any Debt or any sale-leaseback, is
defined to mean any project financing that is or was Incurred with respect to
the development, acquisition, design, engineering, procurement, construction,
operation, ownership, servicing or management of one or more Permitted
Facilities in respect of which the Company or one or more Restricted
Subsidiaries or Eligible Joint Ventures has a direct or indirect interest,
provided that such financing is without recourse to the Company, any
Restricted Subsidiary or any Eligible Joint Venture other than any Restricted
Subsidiary or any Eligible Joint Venture that does not own any Property other
than one or more of such Permitted Facilities or a direct or indirect interest
therein, provided further that such financing may be secured by a Lien on only
(i) the Property that constitutes such Permitted Facilities, (ii) the income
from and proceeds of such Permitted Facilities, (iii) the Capital Stock of,
and other Investments in, any Restricted Subsidiary or Eligible Joint Venture
that owns the Property that constitutes any such Permitted Facility, and (iv)
the Capital Stock of, and other Investments in, any Restricted Subsidiary or
Eligible Joint Venture obligated with respect to such financing and of any
Subsidiary or Joint Venture (that is a Restricted Subsidiary or an Eligible
Joint Venture) of such Person that owns a direct or indirect interest in any
such Permitted Facility, and provided further that an increase in the amount
of Debt with respect to one or more Permitted Facilities pursuant to the
financing provided pursuant to the terms of this definition (except for the
first refinancing of Construction Financing) may not be Incurred to fund or
enable the funding of any dividend or other distribution in respect of Capital
Stock. The fact that a portion of financing with respect to a Permitted
Facility is not Non-Recourse will not prevent other portions of the financing
with respect to such Permitted Facility from constituting Non-Recourse Debt if
the foregoing requirements of this definition are fulfilled with respect to
such other portions.
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"Officers' Certificate" is defined to mean a certificate signed by
the Chairman of the Board of Directors, the Chief Executive Officer or any
Vice President and by the Chief Financial Officer, the Treasurer, an Assistant
Treasurer, the Controller, the Assistant Controller, the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee. Each such
certificate will comply with Section 314 of the Trust Indenture Act and
include the statements provided for in the Indenture if and to the extent
required thereby.
"Opinion of Counsel" is defined to mean an opinion in writing signed
by legal counsel who may be an employee of or counsel to the Company or who
may be other counsel satisfactory to the Trustee. Each such opinion will
comply with Section 314 of the Trust Indenture Act and include the statements
provided for in the Indenture, if and to the extent required thereby.
"Permitted Facility" is defined to mean (i) an electric power or
thermal energy generation or cogeneration facility or related facilities
(including residual waste management and facilities that use thermal energy
from a cogeneration facility), and its or their related electric power
transmission, fuel supply and fuel transportation facilities, together with
its or their related power supply, thermal energy and fuel contracts and other
facilities, services or goods that are ancillary, incidental, necessary or
reasonably related to the marketing, development, construction, management,
servicing, ownership or operation of the foregoing, owned by a utility or
otherwise, as well as other contractual arrangements with customers, suppliers
and contractors or (ii) any infrastructure facilities related to (A) the
treatment of water for municipal and other uses, (B) the treatment and/or
management of waste water, (C) the treatment, management and/or remediation of
waste, pollution and/or potential pollutants and (D) any other process or
environmental purpose.
"Permitted Facilities Debt" is defined to mean any Debt that is or
was Incurred with respect to the direct or indirect development, acquisition,
design, engineering, procurement, construction, operation, ownership,
servicing or management of one or more Permitted Facilities (x) currently in
development by the Company (directly or indirectly) or which are hereafter
acquired or developed by the Company (directly or indirectly) and (y) in which
the Company or one or more Restricted Subsidiaries or Eligible Joint Ventures
has a direct or indirect interest.
"Permitted Funding Company Loans" is defined to mean (a) Debt of a
Restricted Subsidiary, all the Capital Stock of which is owned, directly or
indirectly, by the Company and that (x) does not own any direct or indirect
interest in a Permitted Facility and (y) is not directly or indirectly
obligated on any Debt owed to any Person other than the Company, a Restricted
Subsidiary or an Eligible Joint Venture (a "Funding Company"), owed to a
Restricted Subsidiary or an Eligible Joint Venture that is not directly or
indirectly obligated on any Debt owed to any Person other than the Company, a
Restricted Subsidiary or an Eligible Joint Venture (except to the extent that
it has pledged the Capital Stock of its Subsidiaries and Joint Ventures to
secure Non-Recourse Debt) (a "Holding Company"), provided that such Debt (i)
does not require that interest be paid in cash at any time sooner than six
months after the final Stated Maturity of any series of Debt Securities, (ii)
does not require any payment of principal at any time sooner than six months
after the final Stated Maturity of any series of Debt Securities, (iii) is
subordinated in right of payment to all other Debt of such Restricted
Subsidiary other than Debt Incurred pursuant to clause (vii) of the covenant
described under "Limitation on Subsidiary Debt," all of which will be pari
passu and (iv) is evidenced by a subordinated note in the form attached to the
Indenture, and (b) Debt of a Holding Company to a Funding Company.
"Permitted Investment" is defined to mean any Investment that is made
directly or indirectly by the Company and its Restricted Subsidiaries in (i) a
Restricted Subsidiary or Eligible Joint Venture (excluding for the purpose of
this clause (i) any Construction Financing) that, directly or indirectly, is
or will be engaged in the construction, development, acquisition, operation,
servicing, ownership or management of a Permitted Facility or in any other
Person as a result of which such other Person becomes such a Restricted
Subsidiary or an Eligible Joint Venture, provided that at the time that any of
the foregoing Investments is proposed to be made, no Event of Default or event
that, after giving notice or lapse of time or both, would become an Event of
Default, will have occurred and be continuing, (ii) Construction Financing
provided by the Company (A) to any of its Restricted Subsidiaries (other than
an Eligible Joint Venture) up to 100% of the Construction
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Financing required by such Restricted Subsidiary and (B) to any Eligible Joint
Venture a portion of the Construction Financing required by such Eligible
Joint Venture that does not exceed the ratio of the Capital Stock in such
Eligible Joint Venture that is owned directly or indirectly by the Company to
the total amount of the Capital Stock in such Eligible Joint Venture that is
owned directly and indirectly by the Company and Kiewit together (provided
that the Company may provide such Construction Financing to such Eligible
Joint Venture only if Kiewit provides the balance of such Construction
Financing or otherwise causes it to be provided), if, in either case, (x) the
aggregate proceeds of all the Construction Financing provided is not more than
85% of the sum of the aggregate proceeds of all the Construction Financing and
the aggregate owners' equity investment in such Restricted Subsidiary or such
Eligible Joint Venture, as the case may be, (y) the Company receives a pledge
or assignment of all the Capital Stock of such Restricted Subsidiary or such
Eligible Joint Venture, as the case may be, that is owned by a
non-governmental Person (other than the Company, its Subsidiaries or the
Eligible Joint Ventures) that is permitted to be pledged for such purpose
under applicable law and (z) neither the Company nor Kiewit reduces its
beneficial ownership in such Restricted Subsidiary or such Eligible Joint
Venture, as the case may be, prior to the repayment in full of the Company's
portion of the Construction Financing, (iii) any Cash Equivalents, (iv)
prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits in
the ordinary course of business consistent with past practice, (v) loans and
advances to employees made in the ordinary course of business and consistent
with past practice, (vi) Debt incurred pursuant to Currency Protection
Agreements and Interest Rate Protection Agreements as otherwise permitted by
the Indenture, (vii) bonds, notes, debentures or other debt securities and
instruments received as a result of Asset Dispositions to the extent permitted
by the covenants described under "Limitation on Dispositions" above and
"Limitation on Business" above, (viii) any Lien permitted under the provisions
described under "Limitation on Liens" above, (ix) bank deposits and other
Investments (to the extent they do not constitute Cash Equivalents) required
by lenders in connection with any Non-Recourse Debt, provided that the Chief
Executive Officer or the Chief Financial Officer of the Company determines in
good faith, as evidenced by an Officers' Certificate, that such bank deposits
or Investments are required to effect such financings and are not materially
more restrictive, taken as a whole, than comparable requirements, if any, in
comparable financings in the applicable jurisdiction or (x) any Person to the
extent made with Capital Stock (other than Redeemable Stock) of the Company
(whether by way of purchase, merger, consolidation or otherwise) to the extent
permitted by the covenants described under "Limitation on Business" above.
"Permitted Joint Venture" is defined to mean a Joint Venture (i) that
is or will be formed with respect to the construction, development,
acquisition, servicing, ownership, operation or management of one or more
Permitted Facilities and (ii) in which (A) the Company or (B) the Company and
Kiewit together, directly or indirectly, own at least 70% of the Capital Stock
therein (of which the Company must own at least half (in any event not less
than 35% of the total outstanding Capital Stock)), provided that if applicable
non-U.S. law restricts the amount of Capital Stock that the Company may own,
the Company must own at least 70% of the amount of Capital Stock that it may
own pursuant to such law, which in any event must be not less than 35% of the
total outstanding Capital Stock therein and (iii) in respect of which the
Company alone or in combination with Kiewit, directly or indirectly, (a)
controls, by voting power, board or management committee membership, or
through the provisions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or management agreement
or otherwise, the management and operation of the Joint Venture or any
Permitted Facilities of the Joint Venture or (b) otherwise has significant
influence over the management or operation of the Joint Venture or any
Permitted Facility of the Joint Venture in all material respects (significant
influence includes, without limitations, the right to control or veto any
material act or decision) in connection with such management or operation. Any
Joint Venture that is a Permitted Joint Venture pursuant to this definition
because of the ownership of Capital Stock therein by Kiewit will cease to be a
Permitted Joint Venture if (x) Kiewit disposes of any securities issued by the
Company and, as a result of such disposition, Kiewit becomes the beneficial
owner (as such term is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of less than 25% of the
outstanding shares of Voting Stock of the Company or (y) (I) as a result of
any action other than a disposition of securities by Kiewit, Kiewit becomes
the beneficial owner of less than 25% of the outstanding shares of Voting
Stock of the Company and (II) thereafter Kiewit disposes of any securities
issued by the Company as a result of which the beneficial ownership by Kiewit
of the outstanding Voting Stock of the Company is further reduced, provided
that thereafter such Joint Venture may become a Permitted Joint Venture if
Kiewit becomes the beneficial owner of
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at least 25% of the outstanding shares of Voting Stock of the Company and the
other conditions set forth in this definition are fulfilled.
"Permitted Payments" is defined to mean, with respect to the Company,
any of its Restricted Subsidiaries or any Eligible Joint Venture, (i) any
dividend on shares of Capital Stock of the Company payable (or to the extent
paid) solely in Capital Stock (other than Redeemable Stock) or in options,
warrants or other rights to purchase Capital Stock (other than Redeemable
Stock) of the Company and any distribution of Capital Stock (other than
Redeemable Capital Stock) of the Company in respect of the exercise of any
right to convert or exchange any instrument (whether Debt or equity and
including Redeemable Capital Stock) into Capital Stock (other than Redeemable
Capital Stock) of the Company, (ii) the purchase or other acquisition or
retirement for value of any shares of the Company's Capital Stock, or any
option, warrant or other right to purchase shares of the Company's Capital
Stock with additional shares of, or out of the proceeds of a substantially
contemporaneous issuance of, Capital Stock other than Redeemable Stock, (iii)
any defeasance, redemption, purchase or other acquisition for value of any
Debt that by its terms ranks subordinate in right of payment to the Debt
Securities with the proceeds from the issuance of (x) Debt that is subordinate
to the Debt Securities at least to the extent and in the manner as the Debt to
be defeased, redeemed, purchased or otherwise acquired is subordinate in right
of payment to the Debt Securities, provided that such subordinated Debt
provides for no mandatory payments of principal by way of sinking fund,
mandatory redemption or otherwise (including defeasance) by the Company
(including, without limitation at the option of the holder thereof other than
an option given to a holder pursuant to a "change of control" or an "asset
disposition" covenant that is no more favorable to the holders of such Debt
than comparable covenants for the Debt being defeased, redeemed, purchased or
acquired or, if none, the covenants described under "Limitation on
Dispositions" and "Purchase of Debt Securities Upon a Change of Control" above
and such Debt is not in an amount (net of any original issue discount) greater
than, any Stated Maturity of the Debt being replaced and the proceeds of such
subordinated Debt are utilized for such purpose within 45 days of issuance or
(y) Capital Stock (other than Redeemable Stock), (iv) Restricted Payments in
an amount not to exceed $75 million in the aggregate provided that no payment
may be made pursuant to this clause (iv) if an Event of Default, or an event
that, after giving notice or lapse of time or both, would become an Event of
Default, has occurred and is continuing, (v) any payment or Investment
required by applicable law in order to conduct business operations in the
ordinary course, (vi) a Permitted Investment and (vii) Investments in
Unrestricted Subsidiaries and other Persons that are not Restricted
Subsidiaries or Eligible Joint Ventures in an amount not to exceed $100
million in the aggregate, provided that no payment or Investment may be made
pursuant to this clause (vii) if an Event of Default, or an event that, after
giving notice or lapse of time or both, would become an Event of Default, has
occurred and is continuing. Notwithstanding the foregoing, the amount of
Investments that may be made pursuant to clauses (iv) or (vii), as the case
may be, may be increased by the net reduction in Investments of the type made
previously pursuant to clauses (iv) or (vii), as the case may be, that result
from payments of interest on Debt, dividends, or repayment of loans or
advances, the proceeds of the sale or disposition of the Investment or other
return of the amount of the original Investment to the Company, the Restricted
Subsidiary or the Eligible Joint Venture that made the original Investment
from the Person in which such Investment was made or any distribution or
payment of such Investment to the extent that such distribution or payment
constituted either a Restricted Payment or a Permitted Payment, provided that
(x) the aggregate amount of such payments will not exceed the amount of the
original Investment by the Company, such Restricted Subsidiary or Eligible
Joint Venture that reduced the amount available pursuant to clause (iv) or
clause (vii), as the case may be, for making Restricted Payments and (y) such
payments may be added pursuant to this proviso only to the extent such
payments are not included in the calculation of Adjusted Consolidated Net
Income.
"Permitted Working Capital Facilities" is defined to mean one or more
loan or credit agreements providing for the extension of credit to the Company
for the Company's working capital purposes, which credit agreements will be
ranked pari passu with or subordinate to the Debt Securities in right of
payment and may be secured or unsecured.
"Person" is defined to mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
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"Preferred Stock" is defined to mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) or preferred or preference stock of
such Person that is outstanding or issued on or after the date of original
issuance of any series of Debt Securities.
"Property" of any Person is defined to mean all types of real,
personal, tangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person under
GAAP.
"Purchase Money Debt" means Debt representing, or Incurred to
finance, the cost of acquiring any Property, provided that (i) any Lien
securing such Debt does not extend to or cover any other Property other than
the Property being acquired and (ii) such Debt is Incurred, and any Lien with
respect thereto is granted, within 18 months of the acquisition of such
Property.
"Rating Agencies" is defined to mean (i) S&P and (ii) Moody's or
(iii) if S&P or Moody's or both do not make a rating of the Debt Securities
publicly available, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which will be
substituted for S&P, Moody's or both, as the case may be.
"Rating Category" is defined to mean (i) with respect to S&P, any of
the following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories), (ii) with respect to Moody's, any of the following categories:
Ba, B, Caa, Ca, C and D (or equivalent successor categories) and (iii) the
equivalent of any such category of S&P or Moody's used by another Rating
Agency. In determining whether the rating of the Debt Securities has decreased
by one or more gradations, gradations within Rating Categories (+ and - for
S&P, 1, 2 and 3 for Moody's or the equivalent gradations for another Rating
Agency) will be taken into account (e.g., with respect to S&P, a decline in a
rating from BB+ to BB, as well as from BB- to B+, will constitute a decrease
of one gradation).
"Rating Decline" is defined to mean the occurrence of the following
on, or within 90 days after, the earlier of (i) the occurrence of a Change of
Control and (ii) the date of public notice of the occurrence of a Change of
Control or of the public notice of the intention of the Company to effect a
Change of Control (the "Rating Date") which period will be extended so long as
the rating of the Debt Securities is under publicly announced consideration
for possible downgrading by any of the Rating Agencies: (a) in the event that
any series of the Debt Securities are rated by either Rating Agency on the
Rating Date as Investment Grade, the rating of such Debt Securities by both
such Rating Agencies will be reduced below Investment Grade, or (b) in the
event the Debt Securities are rated below Investment Grade by both such Rating
Agencies on the Rating Date, the rating of such Debt Securities by either
Rating Agency will be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Stock" is defined to mean any class or series of Capital
Stock of any Person that by its terms or otherwise is (i) required to be
redeemed prior to the Stated Maturity of any series of the Debt Securities,
(ii) redeemable at the option of the holder of such class or series of Capital
Stock at any time prior to the Stated Maturity of any series of Debt
Securities or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having a scheduled maturity
prior to the Stated Maturity of any series of Debt Securities, provided that
any Capital Stock that would not constitute Redeemable Stock but for
provisions thereof giving holders thereof the right to require the Company to
purchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or a "change of control" occurring prior to the Stated Maturity of any series
of Debt Securities will not constitute Redeemable Stock if the "asset sale" or
"change of control" provision applicable to such Capital Stock is no more
favorable to the holders of such Capital Stock than the provisions contained
in the covenants described under "Limitation on Dispositions" and "Purchase of
Debt Securities Upon a Change of Control" above and such Capital Stock
specifically provides that the Company will not purchase or redeem any such
Capital Stock pursuant to such covenants prior to the Company's purchase of
Debt Securities required to be purchased by the Company under the covenants
described under "Limitation on Dispositions" and "Purchase of Debt Securities
Upon a Change of Control" above.
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"Reference Period" is defined to mean the four most recently
completed fiscal quarters for which financial information is available
preceding the date of a transaction giving rise to the need to make a
financial calculation.
"Restricted Payment" is defined to mean (i) any dividend or other
distribution on any shares of the Company's Capital Stock, provided that a
dividend or other distribution consisting of the Capital Stock of an
Unrestricted Subsidiary will not constitute a Restricted Payment except to the
extent of the portion thereof that is equal to the portion of the total
Investment in such Unrestricted Subsidiary that is represented by the
Investment that was made pursuant to clause (vii) of the definition of
"Permitted Payment," (ii) any payment on account of the purchase, redemption,
retirement or acquisition for value of the Company's Capital Stock, (iii) any
defeasance, redemption, purchase or other acquisition or retirement for value
prior to the scheduled maturity of any Debt ranked subordinate in right of
payment to the Senior Debt Securities in the case of the Senior Debt Indenture
and the Subordinated Debt Securities other than repayment of Debt of the
Company to a Restricted Subsidiary or an Eligible Joint Venture, (iv) any
Investment made in a Person (other than the Company or any Restricted
Subsidiary or any Eligible Joint Venture) and (v) designating a Restricted
Subsidiary as an Unrestricted Subsidiary (the Restricted Payment made upon
such a designation to be determined as the fair market value of the Capital
Stock of such Restricted Subsidiary owned directly or indirectly by the
Company at the time of the designation). Notwithstanding the foregoing,
"Restricted Payment" will not include any Permitted Payment, except that any
payment made pursuant to clauses (iv) and (v) of the definition of "Permitted
Payment" will be counted in the calculation set forth in clause (c) of the
covenant described under "Limitation on Restricted Payments."
"Restricted Subsidiary" is defined to mean any Subsidiary of the
Company that is not an Unrestricted Subsidiary.
"Senior Debt" is defined to mean the principal of and interest on all
Debt of the Company whether created, Incurred or assumed before, on or after
the date of original issuance of any series of Debt Securities (other than the
Debt Securities), provided that Senior Debt will not include (i) Debt that,
when Incurred and without respect to any election under Section 1111(b) of
Title 11, United States Code, was without recourse to the Company, (ii) Debt
of the Company to any Affiliate and (iii) any Debt of the Company that, by the
terms of the instrument creating or evidencing the same, is specifically
designated as being junior in right of payment to the Debt Securities or any
other Debt of the Company.
"Significant Subsidiary" is defined to mean a Restricted Subsidiary
that is a "significant subsidiary" as defined in Rule 1-02(v) of Regulation
S-X under the Securities Act and the Exchange Act.
"Stated Maturity" is defined to mean, with respect to any debt
security or any installment of interest thereon, the date specified in such
debt security as the fixed date on which any principal of such debt security
or any such installment of interest is due and payable.
"Subsidiary" is defined to mean, with respect to any Person
including, without limitation, the Company and its Subsidiaries, (i) any
corporation or other entity of which such Person owns, directly or indirectly,
a majority of the Capital Stock or other ownership interests and has ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions, and (ii) with respect to the Company and, as
appropriate, its Subsidiaries, any Permitted Joint Venture, including, without
limitation, Coso Land Company Joint Venture, Coso Finance Partners, Coso
Energy Developers and Coso Power Developers, provided that in respect of any
Subsidiary that is not a Permitted Joint Venture, the Company must exercise
control over such Subsidiary and its Property to the same extent as a
Permitted Joint Venture.
"Subsidiary Refinancing Debt" is defined to mean Debt issued in
exchange for, or the proceeds of which are used to refinance (including to
purchase), outstanding Debt of a Restricted Subsidiary or an Eligible Joint
Venture, including, without limitation, Construction Financing, in amount (or,
if such new Debt provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or refinanced
(plus accrued interest
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or dividends and all fees, premiums (in excess of accreted value) and expenses
related to such exchange or refinancing), for which purpose the amount so
exchanged or refinanced will not exceed, in the case of Debt, the lesser of
(x) the principal amount of the Debt so exchanged or refinanced and (y) if the
Debt being exchanged or refinanced was issued with an original issue discount,
the accreted value thereof (as determined in accordance with GAAP) at the time
of such exchange or refinancing, and, in the case of an equity investment made
in lieu of or as part of Construction Financing, Debt, in an amount not to
exceed the capital and surplus shown on the balance sheet of such Restricted
Subsidiary or Eligible Joint Venture, provided that (A) such Debt will be
Non-Recourse if the Debt so exchanged or refinanced is Non-Recourse and (B)
the Average Life of the new Debt will be equal to or greater than the Average
Life of the Debt to be exchanged or refinanced, provided further that upon the
first refinancing of any Construction Financing of a Restricted Subsidiary or
an Eligible Joint Venture, (i) the amount of the Subsidiary Refinancing Debt
issued in exchange for or to refinance such Construction Financing will not be
limited by this provision and (ii) the Subsidiary Refinancing Debt issued in
exchange for or to refinance such Construction Financing will not be subject
to the provisions of the foregoing clause (B) of this provision.
"Trade Payables" is defined to mean, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors Incurred, created, assumed or Guaranteed by such Person or any of
its Subsidiaries or Joint Ventures arising in the ordinary course of business.
"Unrestricted Subsidiary" is defined to mean any Subsidiary of the
Company that becomes an Unrestricted Subsidiary in accordance with the
requirements set forth in the next sentence. The Company may designate any
Restricted Subsidiary as an Unrestricted Subsidiary if (a) such designation is
in compliance with the first paragraph of the covenant described under
"Limitation on Restricted Payments" above and (b) after giving effect to such
designation, such Subsidiary does not own, directly or indirectly, a majority
of the Capital Stock or the Voting Stock of any other Restricted Subsidiary
unless such other Restricted Subsidiary is designated as an Unrestricted
Subsidiary at the same time. Any such designation will be effected by filing
with the Trustee an Officers' Certificate certifying that such designation
complies with the requirements of the immediately preceding sentence. No Debt
or other obligation of an Unrestricted Subsidiary may be with recourse to the
Company, any of its Restricted Subsidiaries, any Eligible Joint Venture or any
of their respective Property except to the extent otherwise permitted by the
provisions of the Indenture. An Unrestricted Subsidiary may be designated as a
Restricted Subsidiary if (i) all the Debt of such Unrestricted Subsidiary
could be Incurred under the provision described under "Limitation on
Subsidiary Debt" above or (ii) any portion of such Debt could not be Incurred
under such provision, if the Company could borrow all such remaining Debt
under the provision described in the first paragraph under "Limitation on
Debt" above.
"U.S. Government Obligations" is defined to mean securities that are
(i) direct obligations of the U.S. 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 U.S., the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
U.S., that, in either case are not callable or redeemable at the option of the
issuer thereof, and will also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government
Obligations or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of
a depository receipt, provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest
on or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Voting Stock" is defined to mean, with respect to any Person,
Capital Stock of any class or kind ordinarily having the power to vote for the
election of directors (or persons fulfilling similar responsibilities) of such
Person.
As more fully described in the Prospectus Supplement, each of the
Indentures also provides for defeasance of certain covenants.
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<PAGE>
CERTIFICATED SECURITIES
Except as may be set forth in a Prospectus Supplement, Debt
Securities will not be issued in certificated form. If, however, Debt
Securities of any series are to be issued in certificated form, no service
charge will be made for any transfer or exchange of any such Debt Securities,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
BOOK-ENTRY SYSTEM
If so specified in any accompanying Prospectus Supplement relating to
Debt Securities of any series, Debt Securities of or within such series may be
issued under a book-entry system in the form of one or more global securities
(each, a "Global Security"). Each Global Security will be deposited with, or
on behalf of, a depositary, which, unless otherwise specified in the
accompanying Prospectus Supplement, will be The Depository Trust Company, New
York, New York (the "Depositary"). The Global Securities will be registered in
the name of the Depositary or its nominee.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. The Depositary is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the Depositary system is also available to others such as securities
brokers and dealers, banks, and trust companies that clear through or maintain
a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Participants are on file with the SEC.
Purchases of the Offered Securities under the Depositary system must
be made by or through Direct Participants, which will receive a credit for the
Securities on the Depositary's records. The ownership interest of each actual
purchaser of each Security ("Beneficial Owner") is in turn to be recorded on
the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from the Depositary of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Securities, except in
the event that use of the book-entry system for the Securities is
discontinued.
To facilitate subsequent transfers, all Securities deposited by
Participants with the Depositary are registered in the name of the
Depositary's partnership nominee, Cede & Co. The deposit of Securities with
the Depositary and their registration in the name of Cede & Co. effect no
change in beneficial ownership. The Depositary has no knowledge of the actual
Beneficial Owners of the Securities; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners
-52-
<PAGE>
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with
respect to the Securities. Under its usual procedures, the Depositary mails an
Omnibus Proxy to the Company as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Securities will be made to the
Depositary. The Depositary's practice is to credit Direct Participants'
accounts on the payable date in accordance with their respective holdings
shown on the Depositary's records unless the Depositary has reason to believe
that it will not receive payment on the payable date. Payments by Participants
to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name," and will be the responsibility
of such Participant and not of the Depositary, agent, or the Company, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to the Depositary is the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
The Depositary may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to the Company. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered. The Company may decide to discontinue use of the
system of book-entry transfers through the Depositary (or a success securities
depository). In that event, Security certificates will be printed and
delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
A Global Security of any series may not be transferred except as a
whole by the Depositary to a nominee or successor of the Depositary or by a
nominee of the Depositary to another nominee of the Depositary. A Global
Security representing all but not part of an offering of Offered Debt
Securities hereby is exchangeable for Debt Securities in definitive form of
like tenor and terms if (i) the Depositary notified the Company that it is
unwilling or unable to continue as depositary for such Global Security or if
at any time the Depositary is no longer eligible to be or in good standing as
a clearing agency registered under the Exchange Act, and in either case, a
successor depositary is not appointed by the Company within 90 days of receipt
by the Company of such notice or of the Company becoming aware of such
ineligibility, or (ii) the Company in its sole discretion at any time
determines not to have all of the Debt Securities represented in an offering
of Offered Debt Securities by a Global Security and notifies the Trustee
thereof. A Global Security exchangeable pursuant to the preceding sentence
shall be exchangeable for Debt Securities registered in such names and in such
authorized denominations as the Depositary of such Global Security shall
direct.
-53-
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in any of the following
ways (or in any combination thereof): (i) through underwriters or dealers;
(ii) directly to a limited number of purchasers or to a single purchaser; or
(iii) through agents. The Prospectus Supplement with respect to any Offered
Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters, dealers or agents
and the respective amounts of such Offered Securities underwritten or
purchased by each of them, the initial public offering price of such Offered
Securities and the proceeds to the Company from such sale, any discounts,
commissions or other items constituting compensation from the Company and any
discounts, commissions or concessions allowed or reallowed or paid to dealers
and any securities exchanges on which such Offered Securities may be listed.
If underwriters are used in the sale of any Offered Securities, such
Offered Securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. Such Offered Securities may be either offered
to the public through underwriting syndicates represented by managing
underwriters, or directly by underwriters.
Offered Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
purchasers to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement.
Agents, dealers and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments which the agents or underwriters may
be required to make in respect thereof.
-54-
<PAGE>
LEGAL MATTERS
Certain legal matters (including the validity of the Securities) will
be passed upon for the Company by Steven A. McArthur, Senior Vice President
and General Counsel of the Company and by Willkie Farr & Gallagher. As of
August 31, 1997, Mr. McArthur beneficially owned 123,542 shares of Common
Stock.
EXPERTS
The consolidated financial statements and financial statement
schedules of the Company and its subsidiaries incorporated by reference in
this Registration Statement by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996, have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports which are
incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
With respect to the Company's unaudited interim financial information
for the periods ended March 31, 1997 and 1996 and June 30, 1997 and 1996,
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, and incorporated by reference herein, they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted
in light of the limited nature of the review procedures applied. Deloitte &
Touche LLP are not subject to the liability provisions of Section 11 of the
Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
Registration Statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements of Northern Electric plc as of
March 31, 1996 and 1995, and for each of the three years in the period ended
March 31, 1996, appearing in the Company's Report on Form 8-K/A dated February
18, 1997, have been audited by Ernst & Young, chartered accountants, as stated
in their report which is included therein and incorporated herein by
reference. Such financial statements have been incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
With respect to Northern's unaudited condensed consolidated financial
statements at September 30, 1996, and for the six months ended September 30,
1996 and 1995, incorporated by reference in this Prospectus, Ernst & Young,
chartered accountants, have reported that they have applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate report, included in the Company's Current Report on
Form 8-K/A dated February 18, 1997, and incorporated herein by reference,
states that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted considering the limited nature
of the review procedures applied. Ernst & Young are not subject to the
liability provisions of Section 11 of the Securities Act for their report on
the unaudited interim financial information because that report is not a
"report" or a "part" of the Registration Statement prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Securities Act.
The consolidated statements of operations, changes in stockholders'
equity, and cash flows of Magma Power Company, and subsidiaries for the year
ended December 31, 1994, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
-55-
<PAGE>
===============================================================================
NO DEALER, SALESPERSON OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS OR A PROSPECTUS SUPPLEMENT
AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OF ITS AGENTS. NEITHER
THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT CONSTITUTES AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY Common Stock
OF THE SECURITIES OFFERED HEREBY OR Preferred Stock
THEREBY IN ANY JURISDICTION TO ANY Senior Debt Securities
PERSON TO WHOM IT IS UNLAWFUL TO MAKE Subordinated Debt Securities
SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY PROSPECTUS CALENERGY COMPANY, INC.
SUPPLEMENT NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THEREOF [LOGO]
OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE SUCH DATE.
- ---------------------------
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION...............................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.....4
RISK FACTORS........................................5
THE COMPANY........................................12
RATIO OF EARNINGS TO FIXED CHARGES.................13
USE OF PROCEEDS....................................13 PROSPECTUS
DESCRIPTION OF CAPITAL STOCK.......................14
DESCRIPTION OF PREFERRED STOCK.....................16
DESCRIPTION OF DEBT SECURITIES.....................21
PLAN OF DISTRIBUTION...............................54
LEGAL MATTERS......................................55
EXPERTS............................................55
===============================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1997
CONVERTIBLE PREFERRED SECURITIES
CALENERGY CAPITAL TRUST IV
CALENERGY CAPITAL TRUST V
CALENERGY CAPITAL TRUST VI
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
AND CONVERTIBLE INTO THE COMMON STOCK OF
CALENERGY COMPANY, INC.
--------------------
CalEnergy Capital Trust IV, CalEnergy Capital Trust V and CalEnergy
Capital Trust VI (each an "Issuer" and collectively, the "Issuers"), each a
statutory business trust formed under the laws of the State of Delaware, may
offer and sell, from time to time, Convertible Preferred Securities (the
"Convertible Preferred Securities"), which represent undivided beneficial
ownership interests in the assets of the respective Issuers. The Convertible
Preferred Securities are convertible into shares of the common stock, par value
$.0675 per share ("Common Stock"), of CalEnergy Company, Inc., a Delaware
corporation ("CalEnergy" or the "Company"). The Company directly or indirectly
owns all of the common securities issued by each of the Issuers (the "Common
Securities" and together with the Convertible Preferred Securities, the "Trust
Securities"). The Issuers were formed for the sole purpose of issuing the Trust
Securities and using the proceeds thereof to purchase from the Company
Convertible Junior Subordinated Debentures (the "Convertible Junior
Subordinated Debentures," and together with the Convertible Preferred
Securities, the "Offered Securities"). The holders of Convertible Preferred
Securities will have a preference with respect to cash distributions and
amounts payable upon liquidation, redemption or otherwise over the holders of
the Common Securities of the respective Issuers. The Offered Securities may be
offered, in separate series, in amounts, at prices and on terms to be set forth
in a supplement to this Prospectus (a "Prospectus Supplement").
Specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in an applicable Prospectus
Supplement, that will include, where applicable, the following: the specific
designation, aggregate principal amount, authorized denomination, maturity,
redemption, conversion, interest rate, method of calculating interest payments
and dates for payment thereof, the right of the Company to defer payment of
interest on the Convertible Preferred Securities or the Convertible Junior
Subordinated Debentures and the maximum length of such deferral period, the
public offering price, voting rights and other specific terms of the offering.
Unless otherwise indicated in a Prospectus Supplement, the Company does not
intend to list any of the Offered Securities on a national securities exchange.
Holders of the Convertible Preferred Securities are entitled to
receive cumulative cash distributions as set forth in a Prospectus Supplement.
The payment of distributions and payments on liquidation of an Issuer or the
redemption of Convertible Preferred Securities, as described below (but only to
the extent of funds of the applicable Issuer available therefor), are
guaranteed by the Company to the extent described herein (the "Guarantees").
The Company's obligations under the Guarantees are subordinate and junior to
all other liabilities of the Company, except any liabilities that may be made
pari passu expressly by their terms and certain other guarantees, but are pari
passu with the most senior preferred stock issued, from time to time, if any,
by the Company. If the Company fails to make interest payments on the
Convertible Junior Subordinated Debentures, the applicable Issuers will have
insufficient funds to pay distributions on the Convertible Preferred
Securities. The Guarantees do not cover payment of distributions when an Issuer
does not have sufficient funds to pay such distributions. The Guarantees, when
taken together with the Company's obligations under the Convertible Junior
Subordinated Debentures and the Indenture (as defined herein) and its
obligations under each Declaration (as defined herein), including its
obligation to pay costs, expenses, debts and other obligations of the Issuer
(other than with respect to the Trust Securities), provide a full and
unconditional guarantee of amounts due on the Convertible Preferred Securities.
The obligations of the Company under the Convertible Junior Subordinated
Debentures are subordinate and junior in right of payment to Senior
Indebtedness (as defined herein) of the Company.
<PAGE>
The Company has the right under the Indenture to defer the interest
payments due from time to time on the Convertible Junior Subordinated
Debentures for successive periods not exceeding 20 consecutive quarters for
each such period, and, as a consequence, quarterly distributions on the
Convertible Preferred Securities would be deferred by the applicable Issuers
(but would continue to accumulate quarterly and accrue interest) until the end
of any such interest deferral period.
In the event of the liquidation of an Issuer, the holders of the
Convertible Preferred Securities of such Issuer will be entitled to receive for
each of the Convertible Preferred Securities a liquidation preference set forth
in a Prospectus Supplement plus accrued and unpaid distributions thereon to the
date of payment, unless, in connection with such liquidation, Convertible
Junior Subordinated Debentures are distributed to the holders of the
Convertible Preferred Securities. In addition, upon the occurrence of certain
events arising from a change in law or a change in legal interpretation, the
Company (i) will shorten the maturity of the Convertible Junior Subordinated
Debentures to a date not earlier than fifteen years from the date of their
issuance, or (ii) cause the redemption of the Convertible Preferred Securities
in whole at the liquidation preference set forth in the applicable Prospectus
Supplement plus accrued and unpaid distributions.
Any Prospectus Supplement relating to the Offered Securities will
contain information concerning certain United States federal income tax
considerations applicable to the Offered Securities. By separate prospectus,
the form of which is included in the Registration Statement of which this
Prospectus is a part, the Company may offer from time to time Common Stock,
Preferred Stock or Senior or Subordinated Debt Securities. The aggregate
initial public offering price of the securities to be offered by this
Prospectus and such other prospectus shall not exceed $1,500,000,000.
The Offered Securities may be offered directly, through agents
designated from time to time, to or through dealers or to or through
underwriters. Such agents or underwriters may act alone or with other agents or
underwriters. Any such agents, dealers or underwriters will be set forth in a
Prospectus Supplement. If an agent of the Company, or a dealer or underwriter,
is involved in the offering of the Offered Securities, the agent's commission,
dealer's purchase price, underwriter's discount and net proceeds to the
Company, as the case may be, will be set forth in, or may be calculated from,
the Prospectus Supplement. Any underwriters, dealers or agents participating in
the offering may be deemed "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act").
See "Risk Factors" beginning on page 5 for a discussion of certain
factors that prospective investors should consider prior to an investment in
the Offered Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement. Any statement
contained in this Prospectus will be deemed to be modified or superseded by any
inconsistent statement contained in an accompanying Prospectus Supplement.
The date of this Prospectus is _______, 1997
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy and information statements and other information filed by the
Company with the SEC can be inspected and copied at the Public Reference
Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
SEC maintains a Web site that contains reports, proxy and information
statements and other materials that are filed through the SEC's Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. This Web site can be
accessed at http:/www.sec.gov. Such reports, proxy and information statements
and other information can also be inspected at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the SEC a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the securities offered by
this Prospectus. This Prospectus does not contain all of the information set
forth or incorporated by reference in the Registration Statement and the
exhibits and schedules related thereto, certain portions of which have been
omitted as permitted by the rules and regulations of the SEC. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits
filed or incorporated as a part thereof. Statements contained in this
Prospectus as to the contents of any documents referred to are not necessarily
complete and, in each such instance, are qualified in all respects by reference
to the applicable documents filed with the SEC.
No separate financial statements of the Issuers have been included
herein. The Company does not consider that such financial statements would be
material to holders of the Convertible Preferred Securities because (i) all of
the voting securities of the Issuers will be owned, directly or indirectly, by
the Company, a reporting company under the Exchange Act, (ii) the Issuers will
have no independent operations but will exist for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of the
applicable Issuer and investing the proceeds thereof in Convertible Junior
Subordinated Debentures issued by the Company and (iii) the obligations of the
applicable Issuer under the Trust Securities will be fully and unconditionally
guaranteed by the Company to the extent that the applicable Issuer has funds
available to meet such obligations. See "Description of the Convertible Junior
Subordinated Debentures" and "Description of the Guarantee."
This Prospectus, any Prospectus Supplement and the periodic filings of
the Company under the Exchange Act contain forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). These forward-looking statements express the beliefs and expectations of
management regarding the Company's future results and performance.
Such statements are based on current expectation and involve a number
of known and unknown risks and uncertainties that could cause the actual
results, performance and/or other achievements of the Company to differ
materially from any expected future results, performance or achievements,
expressed or implied by the forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements and any such
statement is qualified by reference to the following cautionary statements. In
connection with the safe harbor provisions of the Reform Act, the Company's
management has identified important factors that could cause actual results to
differ materially from management's expectations. Reference is made to the
Company's Current Report on Form 8-K dated February 25, 1997, incorporated
herein by reference. The Company is not required to publicly release any
changes to these forward-looking statements for events occurring after the date
thereof or to reflect any other unanticipated events.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC (File No. 1-9874) are
incorporated by reference into this Prospectus:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (as amended by the Form 10-K/A filed on April 30, 1997);
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1997 and June 30, 1997;
(iii) the Company's Current Reports on Form 8-K dated December 24,
1996 (as amended by Form 8-K/A filed on February 18, 1997), February 25, 1997,
February 26, 1997, March 28, 1997, May 7, 1997, May 19, 1997, July 7, 1997,
July 15, 1997, July 22, 1997, August 6, 1997, August 8, 1997, August 18, 1997,
August 28, 1997, September 9, 1997 and September 16, 1997; and
(iv) the description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed under the Exchange Act and
any amendments or reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates the
termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein, or in any other subsequently
filed document which is also incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus except as so modified or
superseded.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated into this Prospectus by reference,
other than exhibits to such documents. Requests for such copies should be
directed to Investor Relations, CalEnergy Company, Inc., 302 South 36th Street,
Suite 400, Omaha, Nebraska 68131, telephone number (402) 341-4500.
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in
this Prospectus or a Prospectus Supplement, in connection with the offering
contemplated hereby and thereby, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or any underwriter, dealer or agent. This Prospectus and a Prospectus
Supplement do not constitute an offer to sell or a solicitation of an offer to
buy any securities other than the securities to which they relate and do not
constitute an offer to sell or a solicitation of an offer to buy any securities
in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus or a
Prospectus Supplement, nor any sale made hereunder or thereunder, shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of any
time subsequent to such date.
4
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the risk factors set
forth below, in addition to the other information appearing in or incorporated
by reference in this Prospectus. This Prospectus contains or incorporates by
reference forward-looking statements which involve risks and uncertainties. The
Company's actual results in the future could differ significantly from the
results discussed or implied in the forward-looking statements. Factors that
could cause or contribute to such a difference include, but are not limited to,
the following risk factors. The term "Company" refers to CalEnergy Company,
Inc. and its operating subsidiaries, unless the context otherwise requires.
ACQUISITIONS. The Company's recent growth has been achieved, in part,
through strategic acquisitions in the energy industry which complement and
diversify the Company's existing business. The Company intends to continue to
pursue an aggressive acquisition strategy for the foreseeable future. The
Company has recently completed several major acquisitions, including the
acquisition of Magma Power Company ("Magma"), Falcon Seaboard Resources, Inc.
("Falcon Seaboard") and Northern Electric plc ("Northern"). The Company has
successfully integrated Magma and Falcon Seaboard and is in the process of
integrating Northern. See "The Company". The Company's ability to pursue
acquisition opportunities successfully will depend on many factors, including,
among others, the Company's ability to (i) identify suitable acquisition
opportunities, (ii) consummate the acquisition, including obtaining any
necessary financing, and (iii) successfully integrate acquired businesses. The
integration of acquired businesses entails numerous risks, including, among
others, the risk of diverting management's attention from the day-to-day
operations of the Company, the risk that the acquired businesses will require
substantial capital and financial investments and the risk that the investments
will fail to perform in accordance with expectations. There can be no assurance
that acquisition opportunities, if any, can be consummated on favorable terms
or that the Company's integration efforts will be successful.
HOLDING COMPANY STRUCTURE. As a holding company, the Company is
dependent on the earnings and cash flows of, and dividends from, its
subsidiaries and joint ventures to generate the funds necessary to meet its
obligations, including the payment of principal, interest and premium, if any,
on the Convertible Junior Subordinated Debentures. The availability of
distributions from the Company's subsidiaries and projects is subject to the
satisfaction of various covenants and conditions contained in the applicable
subsidiaries' and joint ventures' financing documents and to certain utility
regulatory restrictions. Furthermore, the Company is structuring other project
financing arrangements containing, and anticipates that future project level
financings will contain, certain conditions and similar restrictions on the
distribution of cash to the Company.
The Company's subsidiaries, partnerships and joint ventures are
separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the Convertible Junior
Subordinated Debentures or to make any funds available therefor, whether by
dividends, loans or other payments, and do not guarantee the payment of
interest on, premium, if any, or principal of the Convertible Junior
Subordinated Debentures. Any right of the Company to receive any assets of any
of its subsidiaries or other affiliates upon any liquidation or reorganization
of the Company (and the consequent right of the holders of the Convertible
Junior Subordinated Debentures to participate in the distribution of, or to
realize proceeds from, those assets) will be effectively subordinated to the
claims of any such subsidiary's or other affiliate's creditors (including trade
creditors and holders of debt issued by such subsidiary or other affiliate). At
June 30, 1997 the Company had approximately $3,230.4 million of total
consolidated indebtedness, which included approximately $2,276.5 million of the
Company's proportionate share of joint venture and subsidiary debt,
which would be effectively senior to the Convertible Junior Subordinated
Debentures, substantially all of which is secured by the assets
of such joint ventures and subsidiaries, and $283.9 million of subordinated
debt issued in connection with Capital Trust Convertible Preferred Securities.
As of June 30, 1997, on a pro forma basis, after giving effect to the
consummation of the August 1997 offering of another series of Capital Trust
Convertible Preferred Securities, there would have been approximately $3,230.4
million of total consolidated indebtedness, which included approximately
$2,276.5 million of the Company's proportionate share of joint venture and
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subsidiary debt, which would be effectively senior to Convertible Junior
Subordinated Debentures, substantially all of which is secured by the assets
of such joint ventures and subsidiaries, and $553.9 million of the three series
of the Capital Trust Securities. See "Description of the Convertible Junior
Subordinated Debentures--Subordination."
DEPENDENCE ON CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES PAYMENTS;
LEVERAGE. The ability of an Issuer to pay amounts due on the Convertible
Preferred Securities is wholly dependent upon the Company making payments on
the Convertible Junior Subordinated Debentures. The Company is substantially
leveraged. At June 30, 1997, the Company's total consolidated liabilities were
$4,796.8 million (excluding deferred income), its obligations in respect of the
6 1/4% Convertible Preferred Securities and TIDES Securities were $283.9
million, its total consolidated assets were $6,275.1 million and its total
stockholders' equity was $917.9 million. As of such date, on a pro forma basis,
after giving effect to the consummation of the August 1997 offering of the 6
1/2% Convertible Preferred Securities, the Company's total consolidated
liabilities would have been $4,796.8 million (excluding deferred income), its
obligations in respect of the 6 1/4% Convertible Preferred Securities, the 1996
TIDES and the 6 1/2% Convertible Preferred Securities would have been $553.9
million, its total consolidated assets would have been $6,545.1 million and its
stockholders' equity would have been $917.9 million. The Company's leverage
level presents the risk that the Company might not generate sufficient cash to
service the Company's indebtedness, including the Convertible Junior
Subordinated Debentures, or that its leveraged capital structure could limit
its ability to finance future acquisitions, develop additional projects,
compete effectively and operate successfully under adverse economic conditions.
If the Company were unable to make payments on the Convertible Junior
Subordinated Debentures or the Guarantees, the Issuers would be unable to make
payments on the Convertible Preferred Securities as and when required. The
Company is also a holding company which derives substantially all of its
operating income from its subsidiaries and joint ventures. Distributions from
such entities are restricted under various covenants and conditions contained
in financing documents by which they are bound and the stock or assets of
substantially all of such entities is directly or indirectly pledged, to secure
various of such financings or such entities are otherwise subject to regulatory
restrictions. See "--Holding Company Structure."
NORTHERN'S REGULATORY ENVIRONMENT. Northern's electricity distribution
and supply are subject to extensive regulation in the United Kingdom.
Price Regulation of Distribution. Revenue from Northern's distribution
business is controlled by a formula (the "Distribution Price Control Formula")
which determines the maximum average price per unit of electricity (expressed
in kilowatt ("KW") hours, a "unit") that a regional electricity company (a
"REC") in the United Kingdom may charge. The Distribution Price Control Formula
is expected to have a five year duration and is subject to review by the
Director General of Electricity Supply (the "Regulator") at the end of each
five-year period and at other times in the discretion of the Regulator. At each
review, the Regulator can propose adjustments to the Distribution Price Control
Formula. In July 1994, a review resulted in a 17% reduction in allowed
distribution income compared to the original formula, before allowing for
inflation, effective April 1, 1995. In July 1995, a further review of
distribution prices was concluded by the Regulator for fiscal years 1997 to
2000. As a result of this further review, Northern's allowed distribution from
income was reduced by a further 11%, before allowing for inflation, effective
April 1, 1996. There can be no assurance that any further price reviews by the
Regulator will not have a material adverse effect on the Company's results of
operations.
Competition in Supply. Northern's supply business is also subject to
price control and is being progressively opened to competition. Northern
currently has an exclusive right, subject to price cap regulation, to supply
customers in its authorized area with a maximum demand of not more than 100 kW
("Franchise Supply Customers"). The market for customers with a maximum demand
above 1 megawatt ("MW") has been open to competition for suppliers of
electricity since privatization while the market for customers with a maximum
demand above 100 kW ("Non-Franchise Supply Customers") became competitive in
April 1994. The final stage of this process is expected to occur on March 31,
1998, when the exclusive right to supply Franchise Supply Customers is
scheduled to end. There can be no assurance that competition among suppliers of
electricity will not have a material adverse effect on the Company's results of
operations.
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Pool Purchase Price Volatility. Northern's supply business to
Non-Franchise Supply Customers generally involves entering into fixed price
contracts to supply electricity to its customers. Northern obtains the
electricity to satisfy its obligations under such contracts primarily by
purchases from the wholesale trading market for electricity in England and
Wales (the "Pool"). Because the price of electricity purchased from the Pool
can be volatile, to the extent that Northern purchases electricity from the
Pool, Northern is exposed to risk arising from differences between the fixed
price at which it sells and the fluctuating prices at which it purchases
electricity, unless it can effectively hedge such exposure. Northern's ability
to manage such risk at acceptable levels will depend, in part, on the specifics
of the supply contracts that Northern enters into, Northern's ability to
implement and manage an appropriate hedging strategy and the development of an
adequate market for hedging instruments. There can be no assurance that this
risk will be effectively mitigated.
Change in Government Policy. In the general election held in the
United Kingdom on May 1, 1997, the Labour Party won a majority of seats in the
United Kingdom Parliament. On July 31, 1997, the United Kingdom Parliament
passed the windfall tax to be levied on privatized utilities, which will result
in a third quarter charge to net income of approximately $136 million. See the
Company's Current Report on Form 8-K dated July 7, 1997, incorporated herein by
reference. There can be no assurance that other possible changes in tax or
utility regulation by the United Kingdom government, by whichever party it is
controlled, would not have a material adverse effect on the Company's results
of operations.
DEVELOPMENT UNCERTAINTY. The Company is actively seeking to develop,
construct, own and operate new energy projects, both domestically and
internationally, the completion of any of which is subject to substantial risk.
Development can require the Company to expend significant sums for preliminary
engineering, permitting, fuel supply, resource exploration, legal and other
expenses in preparation for competitive bids which the Company may not win or
before it can be determined whether a project is feasible, economically
attractive or capable of being financed. Successful development and
construction is contingent upon, among other things, negotiation on terms
satisfactory to the Company of engineering, construction, fuel supply and power
sales contracts with other project participants, receipt of required
governmental permits and consents and timely implementation of construction.
Further, there can be no assurance that the Company, which is substantially
leveraged, will obtain access to the substantial debt and equity capital
required to continue to develop and construct electric power projects or to
refinance projects. The future growth of the Company is dependent, in large
part, upon the demand for significant amounts of additional energy and the
Company's ability to obtain contracts to supply portions of this demand. There
can be no assurance that development efforts on any particular project, or the
Company's efforts generally, will be successful. In this regard, reference is
made to certain uncertainties associated with the Company's Casecnan project,
as described in the Company's Current Reports on Form 8-K dated May 20, 1997
and August 14, 1997, incorporated herein by reference.
UNCERTAINTIES RELATED TO DOING BUSINESS OUTSIDE THE UNITED STATES. The
Company has various projects under construction outside the United States and a
number of projects under award outside the United States. The financing and
development of projects outside the United States entail significant political
and financial risks (including, without limitation, uncertainties associated
with privatization efforts in the countries involved, currency exchange rate
fluctuations, currency repatriation restrictions, changes in law or regulation,
changes in government policy, political instability, civil unrest and
expropriation) and other structuring issues that have the potential to cause
substantial delays in respect of or material impairment of the value of the
project being developed, which the Company may not be capable of fully insuring
against. The uncertainty of the legal environment in certain foreign countries
in which the Company is developing and may develop or acquire projects could
make it more difficult for the Company to enforce its rights under agreements
relating to such projects. In addition, the laws and regulations of certain
countries may limit the ability of the Company to hold a majority interest in
some of the projects that it may develop or acquire. The Company's
international projects may, in certain cases, be terminated by the applicable
foreign governments. Furthermore, the central bank of any such country
may have the authority in certain circumstances to suspend, restrict or
otherwise impose conditions on foreign exchange transactions or to
approve distributions to foreign investors. Although the Company may structure
certain power purchase agreements and other project revenue agreements to
provide for payments to be made in, or indexed to, United States dollars or a
currency freely convertible into United States dollars, there can be no
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assurance that the Company will be able to achieve this structure in all cases
or that a power purchaser or other customer will be able to obtain sufficient
dollars or other hard currency or that available dollars will be allocated to
pay such obligations. In addition, the Company's investment in Northern and any
dividends or distributions of earnings in respect of such investment, may be
significantly affected by fluctuations in the exchange rate between the United
States dollar and the British pound. Although the Company expects to enter into
certain transactions to hedge risks associated with exchange rate fluctuations,
there can be no assurance that such transactions will be successful in reducing
such risks.
EXPLORATION, DEVELOPMENT AND OPERATION UNCERTAINTIES OF GEOTHERMAL
RESOURCES. Geothermal exploration, development and operations are subject to
uncertainties similar to those typically associated with oil and gas
exploration and development, including dry holes and uncontrolled releases.
Because of the geological complexities of geothermal reservoirs, the geographic
area and sustainable output of geothermal reservoirs can only be estimated and
cannot be definitively established. There is, accordingly, a risk of an
unexpected decline in the capacity of geothermal wells and a risk of geothermal
reservoirs not being sufficient for sustained generation of the electrical
power capacity desired. In addition, geothermal power production poses unusual
risks of seismic activity. Accordingly, there can be no assurance that
earthquake, property damage or business interruption insurance will be adequate
to cover all potential losses sustained in the event of serious seismic
disturbances or that such insurance will be available on commercially
reasonable terms. The success of a geothermal project depends on the quality of
the geothermal resource and operational factors relating to the extraction of
the geothermal fluids involved in such project. The quality of a geothermal
resource is affected by a number of factors, including the size of the
reservoir, the temperature and pressure of the geothermal fluids in such
reservoir, the depth and capacity of the production and injection wells, the
amount of dissolved solids and noncondensible gases contained in such
geothermal fluids, and the permeability of the subsurface rock formations
containing such geothermal resource, including the presence, extent and
location of fractures in such rocks. The quality of a geothermal resource may
decline as a result of a number of factors, including the intrusion of
lower-temperature fluid into the producing zone. An incorrect estimate by the
Company of the quality of a geothermal resource, or a decline in such quality,
could have a material adverse effect on the Company's results of operations. In
addition, both the cost of operations and the operating performance of
geothermal power plants may be adversely affected by a variety of resource
operating factors. Production and injection wells can require frequent
maintenance or replacement. Corrosion caused by high-temperature and
high-salinity geothermal fluids may compel the replacement or repair of certain
equipment, vessels or pipelines. New production and injection wells may be
required for the maintenance of operating levels, thereby requiring substantial
capital expenditures.
GENERAL OPERATING UNCERTAINTIES. The operation of a power plant
involves many risks, including the breakdown or failure of power generation
equipment, pipelines, transmission lines or other equipment or processes, fuel
interruption, and performance below expected levels of output or efficiency.
Each facility may depend on a single or limited number of entities to purchase
electricity or thermal energy, to supply water, to supply gas, to transport
gas, to dispose of wastes or to wheel electricity. The failure of any such
purchasing utility, steam host, water or gas supplier, gas transporter,
wheeling utility or other relevant project participant to fulfill its
contractual obligations could have a material adverse impact on the Company.
FUEL SUPPLY OPERATIONS. The primary fuel source for certain of the
Company's projects is natural gas and a substantial portion of the operating
expenses of such facilities consists of the costs of obtaining natural gas
through gas supply agreements and transporting that gas to the projects under
gas transportation agreements. Although the Company believes that it has
contracted for natural gas supply and transportation in sufficient quantities
to satisfy the needs of its projects, the gas suppliers are not required in all
cases to provide dedicated reserves in support of their contractual
obligations. Unless the gas projects were able to obtain substitute volumes of
natural gas, including the requisite transportation services, for such volumes
at a price not materially higher than the sum of the contract price under the
existing gas supply agreements and any damages paid by the supplier for failure
to deliver, the sustained failure of a supplier to deliver natural gas in
accordance with its contract could have a material adverse effect on the cash
flows to the Company. In addition, under certain gas supply contracts the
Company is obligated to pay for a certain minimum quantity of natural gas even
if it cannot
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utilize it. The Company intends to manage its requirements for
contract volumes under the gas supply agreements so as to meet the minimum take
requirements through a combination of utilization of nominated volumes in
operations and resales of the remainder of the volumes to third-party
customers, if necessary. Finally, the state, federal and Canadian regulatory
authorities that have jurisdiction over natural gas transportation have the
right to modify aspects of the rates, terms and conditions of those contracts.
It is possible that such a modification could materially increase the fuel
transportation costs of the projects or give the transporter a right to
terminate or suspend or decrease its performance under its contract.
PRESENT DEPENDENCE ON LARGE CUSTOMER; CONTRACT UNCERTAINTIES. The
Company currently relies on long-term power purchase "Standard Offer No. 4"
contracts (each, an "SO4 Agreement") with a large customer, Southern California
Edison Company ("Edison"), to generate a substantial portion of its operating
revenues. Any material failure by Edison to fulfill its contractual obligations
under such contracts is likely to have a material adverse effect on the
Company's results of operations. Each of the Company's SO4 Agreements provides
for both capacity payments and energy payments for a term of between 20 and 30
years. During the first ten years after achieving firm operation, energy
payments under each SO4 Agreement are based on a pre-set schedule. Thereafter,
while the basis for the capacity payment remains the same, the required energy
payment is Edison's then-current published avoided cost of energy ("Avoided
Cost of Energy") as determined by the California Public Utility Commission
("CPUC"). The initial ten-year period expires in August 1997 for the Company's
Navy I Project, March 1999 for its BLM Project and January 2000 for its Navy II
Project, which three projects comprise the Coso Project in California (the
"Coso Project"). Such ten-year period expired in 1996 with respect to one of
the eight geothermal plants in the Imperial Valley in California ("Imperial
Valley Projects") and expires in 1999 for three of its Imperial Valley Projects
and in 2000 for the remaining two Imperial Valley Projects that operate under
SO4 Agreements.
Estimates of Edison's future Avoided Cost of Energy vary substantially
in any given year. The Company cannot predict the likely level of Avoided Cost
of Energy prices under its SO4 Agreements with Edison at the expiration of the
fixed-price periods. Edison's Avoided Cost of Energy as determined by the CPUC
is currently substantially below the current scheduled energy prices under the
Company's respective SO4 Agreements and is currently expected to remain so. For
the year ended December 31, 1996, the time period-weighted average of Edison's
Avoided Cost of Energy was 2.5 cents per kWh, compared to the time
period-weighted average for the year ended December 31, 1996 selling prices for
energy of approximately 11.3 cents per kWh for the Company. Thus, the revenues
generated by each of the Company's facilities operating under SO4 Agreements
are likely to decline significantly after the expiration of the applicable
fixed price period.
COMPETITION AND DOMESTIC DEREGULATION; INDUSTRY RESTRUCTURING. The
international power production market is characterized by numerous strong and
capable competitors, many of which have more extensive and more diversified
developmental or operating experience (including international experience) and
greater financial resources than the Company. Many of these competitors also
compete in the domestic market. Further, in recent years, the domestic power
production industry has been characterized by strong and increasing competition
with respect to the industry's efforts to obtain new power sales agreements,
which has contributed to a reduction in prices offered to utilities. In that
regard, many utilities often engage in "competitive bid" solicitations to
satisfy new capacity demands. In the domestic market, competition is expected
to increase as the electric utility industry becomes deregulated. In addition,
recent deregulation and industry restructuring activity may cause certain
utilities or other contract parties to attempt to renegotiate contracts or
otherwise fail to perform their contractual obligations, which in turn could
adversely affect the Company's results of operations. In particular, the state
of California has adopted a bill to restructure the electric industry by
providing for a phased-in competitive power generation industry, with a power
pool and an independent system operator, and for direct access to generation
for all power purchasers outside the power exchange under certain
circumstances. Although the bill contemplates that existing qualifying facility
power sales contracts will be honored, and all of the Company's California
projects are qualifying facilities, until the new system is fully implemented,
it is impossible to predict what impact, if any, it may have on the operations
of those projects.
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IMPACT OF ENVIRONMENTAL, ENERGY AND OTHER REGULATIONS. The Company is
subject to a number of environmental and other laws and regulations affecting
many aspects of its present and future operations, including the disposal of
various forms of waste, the construction or permitting of new facilities, and
the drilling and operation of new and existing wells. Such laws and regulations
generally require the Company to obtain and comply with a wide variety of
licenses, permits and other approvals. The Company also remains subject to a
number of complex and stringent laws and regulations that both public officials
and private individuals may seek to enforce. There can be no assurance that
existing regulations will not be revised or that new regulations will not be
adopted or become applicable to the Company which could have an adverse impact
on its operations. The implementation of regulatory changes imposing more
comprehensive or stringent requirements on the Company, which would result in
increased compliance costs, could have a material adverse effect on the
Company's results of operations. In addition, regulatory compliance for the
construction of new facilities is a costly and time-consuming process, and
intricate and rapidly changing environmental regulations may require major
expenditures for permitting and create the risk of expensive delays or material
impairment of project value if projects cannot function as planned due to
changing regulatory requirements or local opposition.
The Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"), and the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), are two of the laws (including the regulations thereunder) that
affect the Company's operations. PURPA provides to qualifying facilities
("QFs") certain exemptions from federal and state laws and regulations,
including organizational, rate and financial regulation. PUHCA regulates public
utility holding companies and their subsidiaries. The Company is not and will
not be subject to regulation as a holding company under PUHCA as long as the
domestic power plants it owns are QFs under PURPA or are exempted as exempt
wholesale generators ("EWGs"), and so long as its foreign utility operations
are exempted as EWGs or foreign utility companies or are otherwise exempted
under PUHCA. QF status is conditioned on meeting certain criteria, and would be
jeopardized, for example, in the case of the Company's cogeneration facilities,
by the loss of a steam customer or reduction of steam purchases below the
amount required by PURPA. The Company's four cogeneration facilities have steam
sales agreements with existing industrial hosts which agreements must be
maintained in effect or replaced in order to maintain QF status. In the event
the Company were unable to avoid the loss of such status for one of its
facilities, such an event could result in termination of a given project's
power sales agreement and a default under the project subsidiary's project
financing agreements.
Currently, Congress is considering proposed legislation that would
amend PURPA by eliminating the requirement that utilities purchase electricity
from qualifying facilities at prices based on Avoided Cost of Energy. The
Company does not know whether such legislation will be passed or what form it
may take. The Company believes that if any such legislation is passed, it
would apply to new projects only and thus, although potentially impacting the
Company's ability to develop new domestic projects, it would not affect the
Company's existing qualifying facilities. There can be no assurance, however,
that any legislation passed would not adversely impact the Company's existing
domestic project.
In addition, many states are implementing or considering regulatory
initiatives designed to increase competition in the domestic power generation
industry and increase access to electric utilities' transmission and
distribution systems for independent power producers and electricity consumers.
On September 1, 1997, the California legislature adopted an industry
restructuring bill that would provide for a phased-in competitive power
generation industry with a power pool and independent system operator and also
would permit direct access to generation for all power purchasers outside the
power exchange under certain circumstances. Under the bill, consistent with the
requirements of PURPA, existing qualifying facilities power sales agreements
would be honored. The Company cannot predict the final form or timing of the
proposed industry restructuring or the results of its operations.
The structure of such federal and state energy regulations have in the
past, and may in the future, be the subject of various challenges and
restructuring proposals by utilities and other industry participants. The
implementation of regulatory changes in response to such changes or
restructuring proposals, or otherwise imposing more comprehensive or stringent
requirements on the Company, which
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would result in increased compliance costs, could have a material advise
effect on the Company's results of operations.
SUBORDINATION OF GUARANTEE AND CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES. The Company's obligations under the Guarantee are subordinate and
junior in right of payment to all other liabilities of the Company, with
certain limited exceptions. The obligations of the Company under the
Convertible Junior Subordinated Debentures are subordinate and junior in right
of payment to Senior Indebtedness (as defined herein) of the Company. No
payment of principal (including redemption payments, if any), premium, if any,
or interest on the Convertible Junior Subordinated Debentures may be made if
(i) any Senior Indebtedness is not paid when due and any applicable grace
period with respect to such default has ended with such default not having been
cured or waived or ceasing to exist, or (ii) the maturity of any Senior
Indebtedness has been accelerated because of a default. At June 30, 1997, on a
pro forma basis, after giving effect to the consummation of the August 1997
offering of the 6 1/2% Convertible Preferred Securities, there would have been
approximately $953.8 million principal amount of borrowed money included in
Senior Indebtedness (of which $200 million had a "Recourse Amount" to the
Company (as defined in the applicable indenture) of zero). Neither the
Convertible Preferred Securities, the Convertible Junior Subordinated
Debentures nor the Guarantees limit the Company's ability to incur additional
indebtedness or liabilities, including indebtedness or liabilities that would
rank senior to the Convertible Junior Subordinated Debentures and the
Guarantees. See "Description of the Guarantee--Status of the Guarantee;
Subordination" and "Description of the Convertible Junior Subordinated
Debentures--Subordination." The Convertible Junior Subordinated Debentures are
also effectively subordinate to all existing and future liabilities, including
trade payables, of the Company's subsidiaries, joint ventures and affiliates.
See "--Holding Company Structure."
RIGHTS UNDER THE GUARANTEE. Each Guarantee Trustee (as defined herein)
will hold the respective Guarantees for the benefit of the holders of the
Convertible Preferred Securities. Each Guarantee guarantees to the applicable
holders of the Convertible Preferred Securities the payment (but not the
collection) of (i) any accrued and unpaid distributions on the Convertible
Preferred Securities to the extent the applicable Issuer has funds available
therefor, (ii) the amount payable upon redemption, including all accrued and
unpaid distributions, of the Convertible Preferred Securities called for
redemption by an Issuer, to the extent such Issuer has funds available
therefor, and (iii) upon a voluntary or involuntary dissolution, winding up or
termination of an Issuer (other than in connection with a redemption of all of
the Issuer's Convertible Preferred Securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on the
Convertible Preferred Securities to the date of payment to the extent such
Issuer has funds available therefor and (b) the amount of assets of such Issuer
remaining available for distribution to holders of the Convertible Preferred
Securities upon the liquidation of such Issuer. The holders of a majority in
liquidation amount of an Issuer's Convertible Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the applicable Guarantee Trustee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under the applicable
Guarantee. In the event of a payment default on an Issuer's Convertible
Preferred Securities, any holder of such Convertible Preferred Securities may
institute a legal proceeding directly against the Company to enforce such
holder's rights in respect thereof under the Guarantee without first
instituting a legal proceeding against the applicable Issuer, Guarantee
Trustee, or any other person or entity. If the Company were to default on its
obligations under the Convertible Junior Subordinated Debentures, the Issuers
would lack available funds for the payment of distributions or amounts payable
on redemption of the Convertible Preferred Securities or otherwise, and in such
event, the holders of the Convertible Preferred Securities would not be able to
rely upon the Guarantees for payment of such amounts. Instead, holders of the
Convertible Preferred Securities would rely on the enforcement (1) by the
Trustee (as defined herein) of its rights, as registered holder of the
Convertible Junior Subordinated Debentures, against the Company pursuant to the
terms of the Convertible Junior Subordinated Debentures or (2) by such holder
of its right of direct action against the Company to enforce payments on the
Convertible Junior Subordinated Debentures. See "Description of the
Guarantee--Status of the Guarantee; Subordination" and "Description of the
Convertible Junior Subordinated Debentures--Subordination" herein and any
accompanying Prospectus Supplement relating to Convertible Preferred
Securities. Each Declaration provides that each holder of Convertible Preferred
Securities by acceptance
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thereof agrees to the provisions of the Guarantee (including the subordination
provisions thereof) and the Indenture.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES. The
Company has the right under the Indenture to defer interest payments from time
to time on the respective Convertible Junior Subordinated Debentures for
successive periods not exceeding 20 consecutive quarters for each such period.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Company may select a new Deferral Period, subject to the requirements
described herein. As a consequence, during any such Deferral Period, quarterly
distributions on the Convertible Preferred Securities would be deferred (but
would continue to accrue with interest thereon) by the applicable Issuer. In
the event that the Company exercises this right, during such period the Company
(i) shall not declare or pay dividends on, make distributions with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock (other than (A) purchases or acquisitions of shares of
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (B) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of capital stock of the Company, (C) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock of the Company or the security
being converted or exchanged or (D) stock dividends paid by the Company which
consist of stock of the same class as that on which the dividend is being
paid), (ii) shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the
Company after the date of initial issuance of the Convertible Junior
Subordinated Debentures that rank pari passu with or junior to the Convertible
Junior Subordinated Debentures, and (iii) shall not make any guarantee payments
with respect to the foregoing (other than pursuant to the Guarantee). Prior to
the termination of any such Deferral Period, the Company may further extend the
Deferral Period; provided that such Deferral Period, together with all previous
and further extensions thereof, may not exceed 20 consecutive quarters and that
such Deferral Period may not extend beyond the maturity date of the Convertible
Junior Subordinated Debentures or any earlier redemption date. The Company has
no current intention of exercising its right to defer payments of interest by
extending the interest payment period on the Convertible Junior Subordinated
Debentures. However, if the Company should determine to exercise its deferral
right in the future, the market price of the Convertible Preferred Securities
is likely to be adversely affected. See "Description of the Convertible
Preferred Securities--Distributions" and "Description of the Convertible Junior
Subordinated Debentures--Option to Extend Interest Payment Period."
Should a Deferral Period occur, a holder of Convertible Preferred
Securities will continue to accrue interest income for United States federal
income tax purposes. As a result, such a holder will be required to include
such interest in gross income for United States federal income tax purposes in
advance of the receipt of cash, and such holder will not receive the cash from
the Issuer related to such income if such holder disposes of or converts its
Convertible Preferred Securities prior to the record date for payment of
distributions. See "Description of the Convertible Preferred
Securities--Distributions" and "Description of the Convertible Junior
Subordinated Debentures--Option to Extend Interest Payment Period."
TAX EVENT AND REDEMPTION INVESTMENT COMPANY EVENT DISTRIBUTION. Upon
the occurrence of an Investment Company Event (as defined herein), the Company
will, except in certain limited circumstances, cause the Company Trustees (as
defined herein) to liquidate the applicable Issuer and cause Convertible Junior
Subordinated Debentures to be distributed pro rata to the holders of
Convertible Preferred Securities. Upon the occurrence of a Tax Event (as
defined herein) in certain circumstances, the Company will have the right, if
certain conditions are met, (i) to shorten the maturity of the Convertible
Junior Subordinated Debentures to a date not earlier than fifteen years from
the date of their original issuance, or (ii) to redeem the Convertible Junior
Subordinated Debentures, in whole (but not in part), at 100% of the principal
amount plus accrued and unpaid interest, in lieu of a distribution of the
Convertible Junior Subordinated Debentures, in which event the Convertible
Preferred Securities will be redeemed in whole at the liquidation preference
set forth in the applicable Prospectus Supplement per each of the Convertible
Preferred Securities plus accrued and unpaid distributions. In the case of a
Tax Event, the Company may also elect to cause the Convertible Preferred
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Securities to remain outstanding and pay Additional Interest (as defined
herein) on the Convertible Junior Subordinated Debentures. See "Description of
the Convertible Preferred Securities--Conditional Right to Shorten Maturity;
Tax Event Redemption and Investment Company Event Distribution," "Description
of the Convertible Junior Subordinated Debentures--General" and any
accompanying Prospectus Supplement relating to Convertible Preferred
Securities.
Under current United States federal income tax law, a distribution of
the Convertible Junior Subordinated Debentures would not be a taxable event to
holders of the Convertible Preferred Securities. However, if the relevant
Special Event (as defined herein) is a Tax Event which results in the Issuer
being treated as an association taxable as a corporation, the distribution
would likely constitute a taxable event to holders of the Convertible Preferred
Securities.
SHORTENING OF STATED MATURITY OF CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES. Upon the occurrence of a Tax Event, the Company in certain
circumstances will have the right to shorten the maturity of the Convertible
Junior Subordinated Debentures to a date not earlier than fifteen years from
the date of their original issuance and thereby cause the Convertible Preferred
Securities to be redeemed on such earlier date. See "Description of the
Convertible Preferred Securities--Conditional Right to Shorten Maturity; Tax
Event Redemption and Investment Company Event Distribution."
EXCHANGE OF CONVERTIBLE PREFERRED SECURITIES FOR CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES. The Company, the holder of all of the outstanding
Common Securities of an Issuer, will have the right at any time to terminate an
Issuer and, after satisfaction of liabilities to creditors of such Issuer as
provided by applicable law, cause the Convertible Junior Subordinated
Debentures to be distributed to the holders of the applicable Convertible
Preferred Securities and Common Securities in liquidation of the Issuer. See
"Description of the Convertible Preferred Securities--Liquidation Distribution
Upon Dissolution."
Under current United States federal income tax law and
interpretations, and assuming, as expected, that each Issuer will not be
taxable as a corporation, a distribution of the Convertible Junior Subordinated
Debentures upon a liquidation of an Issuer will not be a taxable event to
holders of the Convertible Preferred Securities. However, if a Tax Event were
to occur that would cause an Issuer to be subject to United States federal
income tax with respect to income received or accrued on the Convertible Junior
Subordinated Debentures, a distribution of the Convertible Junior Subordinated
Debentures by such CalEnergy could be a taxable event to the Issuer and the
holders of the Convertible Preferred Securities. See "United States
Taxation--Receipt of Convertible Junior Subordinated Debentures or Cash Upon
Liquidation of the Issuer."
LIMITED VOTING RIGHTS. Except in the limited circumstances described
herein, holders of Convertible Preferred Securities will have no voting rights.
See "Description of the Convertible Preferred Securities--Voting Rights" and
any accompanying Prospectus Supplement relating to Convertible Preferred
Securities.
SHARES OF COMMON STOCK ELIGIBLE FOR FUTURE SALE. Pursuant to the
Company's 1996 Stock Option Plan (the "1996 Plan"), as of June 30, 1997, the
Company had outstanding various options to its officers, directors and
employees for the purchase of 4,859,668 shares of Common Stock. All of the
shares of Common Stock issuable upon exercise of said options have been
registered pursuant to registration statements on Form S-8, and, when fully
vested, are available for immediate resale. Sales of substantial amounts of
Common Stock or the availability of Common Stock for sale, could have an
adverse impact on the market price of the Common Stock and on the Company's
ability to raise additional capital through the sale of Common Stock.
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<PAGE>
TRADING CHARACTERISTICS OF THE CONVERTIBLE PREFERRED SECURITIES. The
Convertible Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid distributions. A holder who disposes of
its Convertible Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest
on the Convertible Junior Subordinated Debentures through the date of
disposition in income as ordinary income (i.e., original issue discount), and
to add such amount to its adjusted tax basis in its pro rata share of the
underlying Convertible Junior Subordinated Debentures deemed disposed of. To
the extent the selling price is less than the holder's adjusted tax basis
(which will include, in the form of original issue discount, all accrued but
unpaid interest), a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes. See any accompanying Prospectus
Summary relating to Convertible Preferred Securities.
LACK OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED SECURITIES. There
is no existing public trading market for the Convertible Preferred Securities,
and there can be no assurance regarding the future development of a market for
the Convertible Preferred Securities, or the ability of holders of the
Convertible Preferred Securities to sell their Convertible Preferred Securities
or the price at which such holders may be able to sell their Convertible
Preferred Securities. If such a market were to develop, the Convertible
Preferred Securities could trade at prices that may be higher or lower than
their initial offering price depending on many factors, including prevailing
interest rates, the price of the Common Stock, the Company's operating results
and the market for similar securities.
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<PAGE>
THE ISSUERS
Each of CalEnergy Capital Trust IV, CalEnergy Capital Trust V and
CalEnergy Capital Trust VI (each, an "Issuer" or a "Issuer" and collectively,
the "Issuers" of the "Issuers") is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust (the "Declaration")
executed by the Company, as sponsor of such Issuer, and the trustees of each
Issuer (the "Issuer Trustees") and (ii) the filing of a certificate of trust
with the Secretary of State of the State of Delaware. For each Issuer, the
Company will own, directly or indirectly, Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of such Issuer. The Common
Securities will rank pari passu, and payment will be made thereon pro rata,
with the Convertible Preferred Securities, except that, upon the occurrence and
during the continuance of an event of default under the Declaration, the rights
of the holders of the Common Securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Convertible Preferred Securities. The assets
of each Issuer will consist principally of the Convertible Junior Subordinated
Debentures. Each Issuer exists for the exclusive purpose of (i) issuing the
Trust Securities representing undivided beneficial interests in the assets of
such Issuer, (ii) investing the gross proceeds of the Trust Securities in the
Convertible Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary or incidental thereto.
Pursuant to each Declaration, the number of Issuer Trustees for each
Issuer initially will be five. Three of the Issuer Trustees (the "Company
Trustees") will be individuals who are employees or officers of or who are
affiliated with the Company. The fourth trustee will be a financial institution
that is unaffiliated with the Company (the "Trustee"). The fifth trustee will
be an entity which maintains its principal place of business in the State of
Delaware (the "Delaware Trustee"). Initially, The Bank of New York, a New York
banking corporation, will act as Trustee and its affiliate, The Bank of New
York (Delaware), a Delaware banking corporation, will act as Delaware Trustee
until, in each case, removed or replaced by the holder of the Common
Securities. The Bank of New York also will act as indenture trustee under the
Guarantee (the "Guarantee Trustee") and under the Indenture (the "Indenture
Trustee"). See "Description of the Guarantee" and "Description of the
Convertible Preferred Securities."
Each Trustee will hold title to the Convertible Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities of such
Issuer and the Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined herein) as the holder of the
Convertible Junior Subordinated Debentures. In addition, each Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the
Convertible Junior Subordinated Debentures for the benefit of the applicable
holders of the Trust Securities. With respect to each Issuer, the Company, as
the direct or indirect holder of all the Common Securities, will have the right
to appoint, remove or replace any of the Issuer Trustees and to increase or
decrease the number of trustees, provided that the number of trustees shall be
at least three, a majority of which shall be Company Trustees. The Company will
pay all fees and expenses related to each Issuer and the offering of the
Convertible Preferred Securities. See "Description of the Convertible Junior
Subordinated Debentures."
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, if any, are
as set forth in the Declaration and the Delaware Business Trust Act, as amended
(the "Trust Act"). See "Description of the Convertible Preferred Securities."
The Declaration, the Indenture and the Guarantee also incorporate by reference
the terms of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Declaration, the Indenture and the Guarantee will be qualified under
the Trust Indenture Act. The place of business and the telephone number of the
Trust are the principal executive offices and telephone number of the Company.
See "The Company."
This description summarizes the material terms of the Declarations and
is qualified in its entirety by reference to the Declarations which have been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, and the Trust Indenture Act.
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THE COMPANY
GENERAL
CalEnergy Company, Inc. (the "Company") is a fast-growing-based global
power company whose goal is to be one of the leading providers of low cost
energy services located throughout the world as electricity and gas markets
privatize or deregulate. The Company was founded in 1971 and, through its
subsidiaries, manages and owns interests in over 6,000 MW of power generation
facilities in operation, construction and development worldwide, currently
operates 20 generating facilities and also supplies and distributes electricity
to 1.5 million customers. In addition, through its recently acquired
subsidiary, Northern Electric plc ("Northern"), the Company is engaged in the
distribution and supply of electricity to approximately 1.5 million customers
primarily in northeast England as well as the generation and supply of
electricity (together with other related business activities) throughout
England and Wales.
The Company's Common Stock is traded on the New York, Pacific and
London Stock Exchanges. As of June 30, 1997, PKS was an approximate 27%
stockholder of the Company (on a fully diluted basis). PKS is a large
employee-owned construction, mining and telecommunications company with
approximately $3.0 billion in revenues in 1996. PKS is one of the largest
construction companies in North America and has been in the construction
business since 1884.
-------------------------
The principal executive offices of the Company are located at 302
South 36th Street, Suite 400, Omaha, Nebraska 68131 and its telephone number is
(402) 341-4500. The Company was incorporated in 1971 under the laws of the
State of Delaware.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to
fixed charges on a historical basis for each of the five years in the period
ended December 31, 1996 and for the six months ended June 30, 1996 and 1997.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------- -------------
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges............................. 3.2 2.8 1.7 1.5 1.6 1.4 1.7
</TABLE>
For purposes of computing historical ratios of earnings to fixed
charges, earnings are divided by fixed charges. "Earnings" represent the
aggregate of (a) the pre-tax income of the Company, including its proportionate
share of the pre-tax income of the Coso Project and excluding the equity in
loss of a non-consolidated subsidiary, and (b) fixed charges, less capitalized
interest. "Fixed charges" represent interest (whether expensed or capitalized),
amortization of deferred financing and bank fees, the portion of rentals
considered to be representative of the interest factor (one-third of lease
payments) and preferred stock dividend requirements of majority owned
subsidiaries.
ACCOUNTING TREATMENT
The financial statements of the Issuers will be reflected in the
Company's consolidated financial statements with the Convertible Preferred
Securities shown as Company-obligated mandatorily redeemable convertible
preferred securities of subsidiary trusts.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement
accompanying this Prospectus, proceeds from the sale of the Convertible
Preferred Securities ultimately will be used by the Company to make equity
investments in future domestic and international energy projects, to fund
possible project or Company acquisitions, for the repayment of debt or for
other general corporate purposes, and initially may be temporarily invested in
short-term securities.
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DESCRIPTION OF THE CONVERTIBLE PREFERRED SECURITIES
The following summary of the material terms and provisions of the
Convertible Preferred Securities is subject to, and qualified in its entirety
by reference to, the Declaration for each of the Issuers, which have been filed
as exhibits to this Registration Statement of which this Prospectus is a part,
and the Trust Indenture Act. Capitalized terms not otherwise defined herein
have the meanings assigned to them in the form of Declaration.
GENERAL
Upon issuance of any Convertible Preferred Securities by an Issuer,
such Convertible Preferred Securities will be issued in fully registered form
without interest coupons. Bearer Convertible Preferred Securities will not be
issued.
Upon issuance, the Convertible Preferred Securities will represent
undivided beneficial ownership interests in the assets of the applicable Issuer
and entitle the holders thereof to a preference in certain circumstances with
respect to distributions and amounts payable on redemption or liquidation over
the Common Securities, as well as other benefits as described in the applicable
Declaration.
Upon issuance, all of the Common Securities will be owned, directly or
indirectly, by the Company. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Convertible Preferred
Securities except as described under "--Subordination of Common Securities."
When issued, the Convertible Junior Subordinated Debentures will be owned by
the Trustee and held for the benefit of the holders of the Trust Securities.
Each Declaration does not permit the issuance by an Issuer of any securities
other than the Trust Securities or the incurrence of any indebtedness by such
Issuer.
The particular terms of each of the Issuer's Convertible Preferred
Securities, as well as any modifications of or additions to the general terms
of the Convertible Preferred Securities as described herein that may be
applicable in the case of Convertible Preferred Securities issued by a
particular Issuer, will be described in the Prospectus Supplement relating to
such Convertible Preferred Securities. Accordingly, for a description of the
terms of Convertible Preferred Securities issued by a particular Issuer,
reference must be made to both the Prospectus Supplement relating thereto and
the description of Convertible Preferred Securities set forth in this
Prospectus.
DISTRIBUTIONS
Pursuant to each Declaration, the distributions payable on each of the
Convertible Preferred Securities will be fixed at a rate per annum set forth in
a Prospectus Supplement. Deferred distributions (and interest thereon) will
accrue interest (compounded quarterly) at the same rate. The term
"distributions" as used herein includes any such distributions payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Convertible Preferred Securities will be
cumulative, accrue from the date of initial issuance and will be payable
quarterly in arrears on each March 1, June 1, September 1 and December 1
(unless otherwise set forth in a Prospectus Supplement), commencing on the date
set forth in the applicable Prospectus Supplement, when, as and if available.
The Company will have the right under the Indenture to defer interest payments
from time to time on the Convertible Junior Subordinated Debentures for
successive periods not exceeding 20 consecutive quarters for each such period,
and, as a consequence, quarterly distributions on the Convertible Preferred
Securities would be deferred by an Issuer (but would continue to accrue with
interest) during any such Deferral Period. In the event that the Company
exercises this right, during such period the Company (i) shall not declare or
pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (A) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Company of
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<PAGE>
its obligations under any employee benefit plans, (B) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of capital stock of the Company, (C) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock of the Company or the security
being converted or exchanged or (D) stock dividends paid by the Company which
consist of stock of the same class as that on which the dividend is being
paid), (ii) shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the
Company after the date of original issuance of the Convertible Junior
Subordinated Debentures that rank pari passu with or junior to the Convertible
Junior Subordinated Debentures, and (iii) shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the
Guarantees). Prior to the termination of any Deferral Period, the Company may
further extend such Deferral Period; provided that such Deferral Period
together with all previous and further deferrals thereof may not exceed 20
consecutive quarters. Upon the termination of any Deferral Period, the Company
will be required to pay all amounts then due and, upon such payment, the
Company may select a new Deferral Period, subject to the above requirements.
In no event shall any Deferral Period extend beyond the maturity of the
Convertible Junior Subordinated Debentures or any earlier Redemption Date. See
"Description of the Convertible Junior Subordinated Debentures--Interest" and
"--Option to Extend Interest Payment Period."
Pursuant to each Declaration, distributions on the Convertible
Preferred Securities must be paid quarterly on the dates payable to the extent
of funds of each Issuer available for the payment of such distributions.
Amounts available to each Issuer for distribution to the holders of the
Convertible Preferred Securities will be limited to payments under the
Convertible Junior Subordinated Debentures in which the Issuer will invest the
proceeds from the issuance and sale of the Trust Securities. See "Description
of the Convertible Junior Subordinated Debentures." The payment of
distributions, to the extent of funds of each Issuer available therefor, are
guaranteed by the Company, as set forth under "Description of the Guarantee."
Pursuant to each Declaration, distributions on the Convertible
Preferred Securities will be payable to the holders thereof as they appear on
the books and records of each Issuer on the relevant record dates, which will
be fifteen days prior to the relevant payment dates. Subject to any applicable
laws and regulations and the provisions of each Issuer's Declaration, each such
payment will be made as described under "--Payment and Paying Agency" below. In
the event that any date on which distributions are payable on the Convertible
Preferred Securities is not a Business Day, payment of the distribution payable
on such date will be made on the next succeeding day which is a Business Day
(without any distribution 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. A "Business Day" shall
mean any day other than a day on which banking institutions in The City of New
York or Wilmington, Delaware are authorized or required by law to close.
CONVERSION RIGHTS
General. Upon issuance, Convertible Preferred Securities of an Issuer
will be convertible at any time beginning 60 days following the first date of
original issuance of such Issuer's Convertible Preferred Securities through the
close of business on the date stated for maturity of the Convertible Preferred
Securities in the applicable Prospectus Supplement (the "Stated Maturity")
(except in the case of Convertible Preferred Securities called for redemption
which shall be convertible at any time prior to the close of business on the
Business Day prior to the redemption date), at the option of the holder thereof
and in the manner described below, into shares of the Common Stock at the
initial conversion rate of shares of Common Stock for each Convertible
Preferred Security set forth in the applicable Prospectus Summary, subject to
adjustment as described under "Conversion Price Adjustments" below. Each Issuer
will covenant in its Declaration not to convert Convertible Junior Subordinated
Debentures held by it except pursuant to a notice of conversion delivered to
the Conversion Agent by a holder of Convertible Preferred Securities. A holder
of Convertible Preferred Securities wishing to exercise its conversion right
will have to deliver an irrevocable conversion notice, together, if such
Convertible Preferred Securities is a Certificated Security (as
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<PAGE>
defined herein), with such Certificated Security, to the Conversion Agent
which shall, on behalf of such holder, exchange such of the Convertible
Preferred Securities for a portion of the Convertible Junior Subordinated
Debentures and immediately convert such Convertible Junior Subordinated
Debentures into Common Stock. Holders may obtain copies of the required form
of the conversion notice from the Conversion Agent.
Holders of Convertible Preferred Securities at the close of business
on a distribution record date will be entitled to receive the distribution
payable on such Convertible Preferred Securities on the corresponding
distribution payment date notwithstanding the conversion of such Convertible
Preferred Securities following such distribution record date but prior to such
distribution payment date. Except as provided in the immediately preceding
sentence, neither the Issuer nor the Company will make, or be required to make,
any payment, allowance or adjustment for accumulated and unpaid distributions,
whether or not in arrears, on converted Convertible Preferred Securities. The
Company will make no payment or allowance for distributions on the shares of
Common Stock issued upon such conversion, except to the extent that such shares
of Common Stock are held of record on the record date for any such
distributions, except in certain limited circumstances. Each conversion will be
deemed to have been effected immediately prior to the close of business on the
day on which the related conversion notice was received by the applicable
Issuer.
No fractional shares of the Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash.
Conversion Price Adjustments--General. The conversion price will be
subject to adjustment in certain events including, without duplication: (a) the
issuance of shares of Common Stock as a dividend or a distribution with respect
to Common Stock, (b) subdivisions, combinations and reclassification of Common
Stock, (c) the issuance to all holders of Common Stock of rights or warrants
entitling them (for a period not exceeding 45 days) to subscribe for shares of
Common Stock at less than the current market price, (d) the distribution to
holders of Common Stock of evidences of indebtedness of the Company, securities
or capital stock, cash or assets (including securities, but excluding those
rights, warrants, dividends and distributions referred to above and dividends
paid exclusively in cash), (e) declaration and payment of a cash dividend on
the Common Stock in a per share amount which exceeds the greater of (A) the per
share amount of the immediately preceding quarterly cash dividend on its Common
Stock and (B) 15% of the current market price of the Common Stock as of the
trading day immediately preceding the date of declaration of such dividend, and
(f) payment to holders of Common Stock in respect of a tender or exchange offer
by the Company or any subsidiary for Common Stock (other than an odd lot tender
offer) at a price in excess of 110% of the current market price of Common Stock
as of the trading day next succeeding the last date tenders or exchanges may be
made pursuant to such tender or exchange offer.
The Company from time to time may reduce the conversion price of the
Convertible Junior Subordinated Debentures (and thus the conversion price of
the Convertible Preferred Securities) by any amount selected by the Company for
any period of at least 20 days, in which case the Company shall give at least
15 days' notice of such reduction. The Company may, at its option, make such
reductions in the conversion price, in addition to those set forth above, as
the Company's Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
No adjustment of the conversion price will be made upon the issuance
of any shares of Common Stock pursuant to any present or future plan providing
for the reinvestment of dividends or interest payable on securities of the
Company and the investment of additional optional amounts in shares of Common
Stock under any such plan. No adjustment in the conversion price will be
required unless such adjustment would require a change of at least one percent
(1%) in the price then in effect; provided, however, that any adjustment that
would not be required to be made shall be carried forward and taken into
account in any subsequent adjustment. If any action would require adjustment of
the conversion price pursuant to more than one of the provisions described
above, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value to the holder of the
Convertible Preferred Securities.
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Conversion price adjustments or omissions in making such adjustments
may, under certain circumstances, be deemed to be distributions that could be
taxable as dividends to holders of the Convertible Preferred Securities or to
the holders of Common Stock.
Conversion Adjustments--Merger, Consolidation or Sale of Assets of the
Company. In the event that the Company shall be a party to any transaction
(including, without limitation, and with certain exceptions), (a)
recapitalization or reclassification of the Common Stock, (b) consolidation of
the Company with, or merger of the Company into, any other person, or any
merger of another person into the Company, (c) any sale, transfer or lease of
all or substantially all of the assets of the Company or (d) any compulsory
share exchange) pursuant to which the Common Stock is converted into the right
to receive other securities, cash or other property (each of the foregoing
being referred to as a "Transaction"), then the holders of the Convertible
Preferred Securities then outstanding shall have the right to convert the
Convertible Preferred Securities into the kind and amount of securities, cash
or other property receivable upon the consummation of such Transaction by a
holder of the number of shares of Common Stock issuable upon conversion of such
Convertible Preferred Securities immediately prior to such Transaction.
In the case of a Transaction, each of the Convertible Preferred
Securities then outstanding would become convertible into the securities, cash
or property receivable by a holder of the number of shares of the Common Stock
into which such Convertible Preferred Securities was convertible immediately
prior to such Transaction. This change could substantially lessen or eliminate
the value of the conversion privilege associated with the Convertible Preferred
Securities in the future. For example, if the Company were acquired in a cash
merger, each of the Convertible Preferred Securities would become convertible
solely into cash and would no longer be convertible into securities whose value
would vary depending on the future prospects of the Company and other factors.
OPTIONAL REDEMPTION
The Company will be permitted to redeem the Convertible Junior
Subordinated Debentures as described herein under "Description of the
Convertible Junior Subordinated Debentures--Optional Redemption," in whole or
in part, from time to time, on terms described in each supplemental Indenture.
Upon any redemption in whole or in part of the Convertible Junior Subordinated
Debentures at the option of the Company, the applicable Issuer will, to the
extent of the proceeds of such redemption, redeem Convertible Preferred
Securities and Common Securities at the Redemption Price. In the event that
fewer than all the outstanding Convertible Preferred Securities are to be so
redeemed, the Convertible Preferred Securities to be redeemed will be selected
as described under "--Form, Denomination and Registration--Global Certificate;
Book-Entry Form" below.
In the event of any redemption in part, an Issuer shall not be
required to (i) issue, register the transfer of or exchange any of the
Convertible Preferred Securities during a period beginning at the opening of
business 15 days before any selection for redemption of Convertible Preferred
Securities and ending at the close of business on the earliest date in which
the relevant notice of redemption is deemed to have been given to all holders
of Convertible Preferred Securities to be so redeemed and (ii) register the
transfer of or exchange any Convertible Preferred Securities so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Convertible Preferred Securities being redeemed in part. See "--Redemption
Procedures."
CONDITIONAL RIGHT TO SHORTEN MATURITY; TAX EVENT REDEMPTION AND
INVESTMENT COMPANY EVENT DISTRIBUTION
If a Tax Event (as defined herein) shall occur and be continuing and
in the opinion of counsel to the Company experienced in such matters, there
would in all cases, after effecting the termination of the applicable Issuer
and the distribution of the Convertible Junior Subordinated Debentures to the
holders of the Convertible Preferred Securities in exchange therefor, be more
than an insubstantial risk that an
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Adverse Tax Consequence (as defined under "Tax Event" below) would continue to
exist, then the Company shall have the right:
(a) to shorten the Stated Maturity of the Junior Subordinated
Debentures to the minimum extent required, but in any event to a date
not earlier than fifteen years from the first date of original
issuance of such Junior Subordinated Debentures (the action referred
to in this clause (a) being referred to herein as a "Maturity
Advancement"), such that, in the opinion of counsel to the Company
experienced in such matters, after advancing the Stated Maturity,
interest paid on the Junior Subordinated Debentures will be deductible
for federal income tax purposes, provided, however, that there shall
be delivered to the Trustees an opinion of counsel (which counsel
shall be satisfactory to the Trustees) that such change in maturity
will not (i) cause the Trust to fail to be classified as a grantor
trust or (ii) result in a taxable event to the holder, or
(b) if in the opinion of counsel to the Company experienced
in such matters, there would in all cases, after effecting a Maturity
Advancement, be more than an insubstantial risk that an Adverse Tax
Consequence would continue to exist, to redeem the Junior
Subordinated Debentures, prior to a date set forth in the applicable
Prospectus Supplement, in whole but not in part for cash, upon not
less than 30 nor more than 60 days' notice and within 90 days
following the occurrence of the Tax Event, at 100% of the principal
amount thereof plus accrued and unpaid interest and, following such
redemption, all the Convertible Preferred Securities will be redeemed
by the Issuer at the liquidation preference date set forth in the
applicable Prospectus Supplement per each Convertible Preferred
Security plus accrued and unpaid distributions. See "--Mandatory
Redemption."
In lieu of the foregoing options, the Company will also have the
option of causing the Convertible Preferred Securities to remain outstanding
and pay Additional Interest (as defined herein) on the Convertible Junior
Subordinated Debentures. See "Description of the Convertible Junior
Subordinated Debentures--Additional Interest."
Holders of Convertible Preferred Securities should consult their own
tax advisors regarding the tax consequences to them of a Maturity Advancement.
"Tax Event" means that the Company shall have obtained an opinion of
nationally recognized independent tax counsel (reasonably acceptable to the
Company Trustees) experienced in such matters to the effect that, 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 such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after the date of the
applicable Prospectus Supplement), which amendment or change is effective, is
enacted or which interpretation or pronouncement is announced on or after the
date of the applicable Prospectus Supplement (collectively, a "Change In Tax
Law"), there is more than an insubstantial risk that (i) the Issuer is or will
be subject to United States federal income tax with respect to interest
received on the Convertible Junior Subordinated Debentures, (ii) interest
payable to the Issuer on the Convertible Junior Subordinated Debentures is not
or will not be deductible for United States federal income tax purposes or
(iii) the Issuer is or will be subject to more than a de minimis amount of
other taxes, duties, assessments or other governmental charges of whatever
nature imposed by the United States, or any other taxing authority (each of the
circumstances referred to in clauses (i), (ii) and (iii) being referred to
herein as an "Adverse Tax Consequence"). Notwithstanding anything in the
previous sentence to the contrary, a Tax Event shall not include any Change in
Tax Law that requires the Company for United States federal income tax purposes
to defer taking a deduction for any original issue discount ("OID") that
accrues with respect to the Convertible Junior Subordinated Debentures until
the interest payment related to such OID is paid by the Company in money
provided that such Change in Tax Law does not create more than an insubstantial
risk that the Company will be prevented from taking a deduction for OID
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accruing with respect to the Convertible Junior Subordinated Debentures at a
date that is no later than the date the interest payment related to such OID is
actually paid by the Company in money.
If an Investment Company Event (as defined herein) shall occur and be
continuing, the Company shall cause the Company Trustees to dissolve and
liquidate each Issuer involved and cause the Convertible Junior Subordinated
Debentures, subject to the rights of creditors under applicable law, to be
distributed to the holders of the Convertible Preferred Securities in
liquidation of such Issuer within 90 days following the occurrence of such
Investment Company Event.
The distribution by the Company of the Convertible Junior Subordinated
Debentures will effectively result in the cancellation of the Convertible
Preferred Securities.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that an Issuer is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change
in 1940 Act Law becomes effective on or after the date of the applicable
Prospectus Supplement.
A "Special Event" means either an Investment Company Event or a Tax
Event.
After the date fixed for any distribution of Convertible Junior
Subordinated Debentures (i) the Convertible Preferred Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or its
nominee, as the record holder of the Global Certificates, will receive a
registered global certificate or certificates representing the Convertible
Junior Subordinated Debentures to be delivered upon such distribution and (iii)
any certificates representing Convertible Preferred Securities not held by DTC
or its nominee will be deemed to represent Convertible Junior Subordinated
Debentures having a principal amount equal to the aggregate of the stated
liquidation preference of such Convertible Preferred Securities, with accrued
and unpaid interest equal to the amount of accrued and unpaid distributions on
such Convertible Preferred Securities, until such certificates are presented to
the Company or its agent for transfer or reissuance.
MANDATORY REDEMPTION
The Convertible Junior Subordinated Debentures will mature on or may
be redeemed, in whole or in part, on the dates set forth in each supplemental
Indenture or at any time in certain circumstances upon the occurrence of a Tax
Event. Upon the repayment or payment of the Convertible Junior Subordinated
Debentures, whether at maturity or upon redemption or otherwise, the proceeds
from such repayment or redemption shall simultaneously be applied to redeem
Trust Securities having an aggregate liquidation amount equal to the
Convertible Junior Subordinated Debentures so repaid or redeemed at the
applicable redemption price together with accrued and unpaid distributions
through the date of redemptions provided that holders of the Trust Securities
shall be given not less than 30 nor more than 60 days' notice of such
redemption. See "--Tax Event or Investment Company Event Redemption or
Distribution" and "Description of the Convertible Junior Subordinated
Debentures--General" and "--Optional Redemption." Upon the repayment of the
Convertible Junior Subordinated Debentures at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds from such repayment
will be applied to redeem the Convertible Preferred Securities and Common
Securities, in whole, upon not less than 30 nor more than 60 days' notice.
REDEMPTION PROCEDURES
The Convertible Preferred Securities will not be redeemed unless all
accrued and unpaid distributions have been paid on all Convertible Preferred
Securities for all quarterly distribution periods terminating on or prior to
the date of redemption.
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If an Issuer gives a notice of redemption in respect of Convertible
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, such Issuer will irrevocably deposit
with DTC funds sufficient to pay the amount payable on redemption and will give
DTC irrevocable instructions and authority to pay such amount in respect of
Convertible Preferred Securities represented by the Global Certificates and
will irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay such amount in respect of any Certificated
Securities and will give such paying agent irrevocable instructions and
authority to pay such amount to the holders of Certificated Securities upon
surrender of their certificates. Notwithstanding the foregoing, distributions
payable on or prior to the redemption date for any Convertible Preferred
Securities called for redemption shall be payable to the holders of such
Convertible Preferred Securities on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds are
deposited as required, then upon the date of such deposit, all rights of
holders of such Convertible Preferred Securities so called for redemption will
cease, except the right of the holders of such Convertible Preferred Securities
to receive the redemption price, but without interest on such redemption price.
In the event that any date fixed for redemption of Convertible Preferred
Securities is not a Business Day, then payment of the amount payable on such
date will be made on the next succeeding day which is a Business Day (without
any interest or other payment in respect of any such delay), except that, if
such Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day. In the event that payment of the
redemption price in respect of Convertible Preferred Securities is improperly
withheld or refused, and not paid either by such Issuer or by the Company
pursuant to the Guarantee described under "Description of the Guarantee,"
distributions on such Convertible Preferred Securities will continue to accrue
at the then applicable rate, from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the amount payable upon
redemption (other than for purposes of calculating any premium).
Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding
Convertible Preferred Securities by tender, in the open market or by private
agreement.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the amount payable upon redemption
of, the Trust Securities, as applicable, shall be made pro rata based on the
liquidation preference of the Trust Securities; provided, however, that, if on
any distribution date or redemption date a Declaration Event of Default (as
defined below under "--Declaration Events of Default") under the applicable
Declaration shall have occurred and be continuing, no payment of any
distribution on, or amount payable upon redemption of, any Common Security, and
no other payment on account of the redemption, liquidation or other acquisition
of Common Securities, shall be made unless payment in full in cash of
accumulated and unpaid distributions on all outstanding Convertible Preferred
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the amount payable upon redemption of the Convertible
Preferred Securities, the full amount of such amount in respect of all
outstanding Convertible Preferred Securities, shall have been made or provided
for, and all funds available to the Trustee shall first be applied to the
payment in full in cash of all distributions on, or the amount payable upon
redemption of, Convertible Preferred Securities then due and payable.
In the case of any Declaration Event of Default, the holder of Common
Securities will be deemed to have waived any such Declaration Event of Default
until all such Declaration Events of Default with respect to the Convertible
Preferred Securities have been cured, waived or otherwise eliminated. Until any
such Declaration Events of Default with respect to the Convertible Preferred
Securities have been so cured, waived or otherwise eliminated, the Trustee
shall act solely on behalf of the holders of the Convertible Preferred
Securities and not the holder of the Common Securities, and only the holders of
the Convertible Preferred Securities will have the right to direct the Trustee
to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
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The holder of all of the outstanding Common Securities of an Issuer
(i.e., the Company) has the right at any time to terminate such Issuer and,
after satisfaction of liabilities to creditors of the Issuer as provided by
applicable law, cause the applicable Convertible Junior Subordinated Debentures
to be distributed to the holders of the Convertible Preferred Securities and
Common Securities in liquidation of the Issuer. Such right is subject to the
Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Convertible Preferred
Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding up or termination of an Issuer, the holders of the Convertible
Preferred Securities at the time will be entitled to receive out of the assets
of the Issuer available for distribution to holders of Trust Securities after
satisfaction of liabilities of creditors of the applicable Issuer, before any
distribution of assets is made to the holders of the Common Securities, an
amount equal to the aggregate of the stated liquidation preference of each of
the Convertible Preferred Securities and accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such liquidation, dissolution, winding up or termination,
Convertible Junior Subordinated Debentures in an aggregate principal amount
equal to the Liquidation Distribution have been distributed on a pro rata basis
to the holders of the Trust Securities.
Pursuant to each Declaration, each Issuer shall be dissolved and its
affairs shall be wound up upon the earliest to occur of the following: (i) the
expiration of the term of an Issuer, (ii) the bankruptcy of the Company, (iii)
the filing of a certificate of dissolution or its equivalent with respect to
the Company or the approval of the filing of a certificate of cancellation with
respect to an Issuer, by the holders of at least a majority in liquidation
amount of the outstanding Convertible Preferred Securities as described under
"--Modification of the Declaration," or the revocation of the Company's charter
and the expiration of 90 days after the date of notice to the Company of such
revocation without a reinstatement of its charter, (iv) the distribution of all
the assets of an Issuer, (v) the entry of a decree of a judicial dissolution of
the Company, (vi) the redemption of all of an Issuer's Trust Securities or
(vii) the conversion of all outstanding Convertible Preferred Securities into
Common Stock.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE ISSUER
An Issuer may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity or person,
except as described below. An Issuer may, without the consent of the holders of
the Convertible Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by, a trust organized as such under the laws of any state
of the United States of America; provided that (i) if such Issuer is not the
survivor, such successor entity either (x) expressly assumes all of the
obligations of the Issuer under the Convertible Preferred Securities or (y)
substitutes for the Convertible Preferred Securities other securities having
substantially the same terms as the Convertible Preferred Securities (the
"Successor Securities") as long as the Successor Securities rank the same as
the Convertible Preferred Securities with respect to distributions, assets and
payments upon liquidation, redemption and otherwise, (ii) the Company expressly
acknowledges a trustee of the successor entity that possesses the same powers
and duties as the Trustee as the holder of the Convertible Junior Subordinated
Debentures, (iii) the Convertible Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Convertible Preferred Securities are then listed,
(iv) such merger, consolidation, amalgamation or replacement does not cause the
Convertible Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Convertible
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of the Issuer, (vii) the Company has provided a guarantee to the holders
of the Successor Securities with respect to such Successor entity having
substantially the same terms as the applicable Guarantee, and (viii) prior to
such merger, consolidation, amalgamation or replacement, the Company has
received an opinion of nationally recognized independent counsel (reasonably
acceptable to the Trustee) to the Issuer experienced in such matters to the
effect that (x) such successor entity
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will be treated as a grantor trust for United States federal income tax
purposes, (y) following such merger, consolidation, amalgamation or
replacement, neither the Company nor such successor entity will be required to
register as an investment company under the 1940 Act and (z) such merger,
consolidation, amalgamation or replacement will not adversely affect the
rights, preferences and privileges of the holders of the Convertible Preferred
Securities in any material respect. Notwithstanding the foregoing, an Issuer
shall not, except with the consent of holders of 100% in liquidation amount of
the Common Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger or replacement would cause such Issuer or the Successor
Entity to be classified as other than a grantor trust for United States
federal income tax purposes.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Event of Default") or a
default by the Company under a Guarantee will constitute an event of default
under the applicable Declaration with respect to the Trust Securities (a
"Declaration Event of Default"); provided that, pursuant to each Declaration,
the holder of the Common Securities will be deemed to have waived any
Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Convertible Preferred
Securities have been cured, waived or otherwise eliminated. Until such
Declaration Events of Default with respect to the Convertible Preferred
Securities have been so cured, waived or otherwise eliminated, the Trustee will
be deemed to be acting solely on behalf of the holders of the Convertible
Preferred Securities and only the holders of the Convertible Preferred
Securities will have the right to direct the Trustee with respect to certain
matters under the applicable Declaration and, therefore, the Indenture.
If a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest or
principal on the Convertible Junior Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a holder of Convertible Preferred Securities may
directly institute a proceeding (a "Direct Action") for enforcement of payment
to such holder of the principal of or interest on the Convertible Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible Preferred Securities of such holder on or
after the respective due date specified in the Convertible Junior Subordinated
Debentures. In addition, if the Trustee fails to enforce its rights under the
Convertible Junior Subordinated Debentures (other than rights arising from a
Declaration Event of Default described in the immediately preceding sentence)
after any holder of Preferred Securities shall have made a written request to
the Trustee to enforce such rights, such holder of Convertible Preferred
Securities may, to the fullest extent permitted by law, thereafter institute a
Direct Action to enforce the Trustee's rights as holder of the Convertible
Junior Subordinated Debentures, without first instituting any legal proceeding
against the Trustee or any other person. In connection with such Direct Action,
the Company will be subrogated to the rights of such holder of Convertible
Preferred Securities under the Declaration to the extent of any payment made by
the Company to such holder of Convertible Preferred Securities in such Direct
Action. The holders of Convertible Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Convertible
Junior Subordinated Debentures.
Upon the occurrence of a Declaration Event of Default, the Trustee as
the sole holder of the Convertible Junior Subordinated Debentures will have the
right under the Indenture to declare the principal of and interest on the
Convertible Junior Subordinated Debentures to be immediately due and payable.
The Company and the Trust are each required to file annually with the Property
Trustee an officer's certificate as to its compliance with all conditions and
covenants under each Declaration.
VOTING RIGHTS
Except as described herein, any Prospectus Supplement, under the Trust
Act, the Trust Indenture Act and under "Description of the
Guarantees--Amendments and Assignments," and as otherwise required by law
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and each Declaration, the holders of the Convertible Preferred Securities will
have no voting rights.
Subject to the requirement of the Trustee obtaining a tax opinion in
certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or direct
the exercise of any trust or power conferred upon the Trustee under each
Declaration, including the right to direct the Trustee, as holder of the
Convertible Junior Subordinated Debentures, to (i) exercise the remedies
available under the Indenture with respect to the Convertible Junior
Subordinated Debentures, (ii) waive any past Event of Default that is waiveable
under the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Convertible Junior Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification, or
termination of the Indenture or the Convertible Junior Subordinated Debentures
where such consent shall be required; provided, however, that, where a consent
or action under the Indenture would require the consent or act of the holders
of more than a majority of the aggregate principal amount of Convertible Junior
Subordinated Debentures affected thereby, only the holders of the percentage of
the aggregate stated liquidation preference of the Convertible Preferred
Securities which is at least equal to the percentage required under the
Indenture may direct the Trustee to give such consent or take such action. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Convertible Junior Subordinated Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption on the redemption
date), then a holder of Convertible Preferred Securities may institute a Direct
Action for enforcement of payment to such holder of the principal of or
interest on the Convertible Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Convertible Preferred
Securities of such holder on or after the respective due date specified in the
Convertible Junior Subordinated Debentures. In addition, if the Trustee fails
to enforce its rights under the Convertible Junior Subordinated Debentures
(other than rights arising from a Declaration Event of Default described in the
immediately preceding sentence) after any holder of Convertible Preferred
Securities shall have made a written request to the Trustee to enforce such
rights, such holder of Convertible Preferred Securities may, to the fullest
extent permitted by law, thereafter institute a Direct Action to enforce the
Trustee's rights as holder of the Convertible Junior Subordinated Debentures,
without first instituting any legal proceeding against the Trustee or any other
person. The Trustee shall notify all holders of the Convertible Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Convertible Junior Subordinated Debentures. Such notice shall
state that such Event of Default also constitutes a Declaration Event of
Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Trustee shall not take any of the
actions described in clause (i), (ii) or (iii) above unless the Trustee has
obtained an opinion of tax counsel to the effect that, as a result of such
action, the applicable Issuer will not fail to be classified as a grantor trust
for United States federal income tax purposes.
In the event the consent of the Trustee, as the holder of the
Convertible Junior Subordinated Debentures, is required under the Indenture
with respect to any amendment, modification or termination of the Indenture,
the Trustee shall request the direction of the holders of the affected Trust
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a majority in liquidation amount of the Trust Securities voting
together as a single class; provided, however, that, where a consent under the
Indenture would require the consent of the holders of more than a majority of
the aggregate principal amount of the Convertible Junior Subordinated
Debentures, the Trustee may only give such consent at the direction of the
holders of at least the same proportion in aggregate stated liquidation
preference of the Trust Securities. The Trustee shall not take any such action
in accordance with the directions of the holders of the Trust Securities unless
the Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the applicable Issuer will not be
classified as other than a grantor trust.
A waiver of an Event of Default under the Indenture will constitute a
waiver of the corresponding Declaration Event of Default.
Any required approval or direction of holders of Convertible Preferred
Securities may be given at a
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separate meeting of holders of Convertible Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities of such
Issuer or pursuant to written consent. The Company Trustees will cause a
notice of any meeting at which holders of Convertible 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
Convertible Preferred Securities. Each such notice will include a statement
setting forth the following information: (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 Convertible Preferred Securities will be required for an Issuer
to redeem and cancel Convertible Preferred Securities or distribute
Convertible Junior Subordinated Debentures in accordance with its Declaration.
Notwithstanding that holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned at such time by the
Company or any entity directly or indirectly controlling or controlled by, or
under direct or indirect common control with, the Company, shall not be
entitled to vote or consent and shall, for purposes of such vote or consent, be
treated as if such Convertible Preferred Securities were not outstanding.
The procedures by which holders of Convertible Preferred Securities
may exercise their voting rights are described below. See "--Form, Denomination
and Registration--Global Certificate; Book-entry Form" below.
Holders of the Convertible Preferred Securities will have no rights to
appoint or remove the Issuer Trustees, who may be appointed, removed or
replaced solely by the Company as the indirect or direct holder of all of the
Common Securities.
MODIFICATION OF THE DECLARATION
Each Declaration may be modified and amended if approved by the
Company Trustees (and in certain circumstances the Trustee and the Delaware
Trustee), provided, that if any proposed amendment provides for, or the Company
Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Trust Securities issued
pursuant to such Declaration whether by way of amendment to the Declaration or
otherwise or (ii) the dissolution, winding-up or termination of the Issuer
other than pursuant to the terms of the Declaration, then the holders of the
Trust Securities voting together as a single class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a majority in liquidation amount
of the Trust Securities affected thereby; provided, that if any amendment or
proposal referred to in clause (i) above would adversely affect only the
Convertible 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 at
least a majority in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be
made to a Declaration if such amendment or modification would (i) cause such
Issuer to be classified for purposes of United States federal income taxation
as other than a grantor trust, (ii) reduce or otherwise adversely affect the
powers of the Trustee or (iii) cause such Issuer to be deemed an "investment
company" which is required to be registered under the 1940 Act.
FORM, DENOMINATION AND REGISTRATION
The Convertible Preferred Securities are issued in fully registered
form, without coupons.
Global Certificate; Book-entry Form. Except as provided below,
Convertible Preferred Securities are evidenced by one or more global
certificates representing Convertible Preferred Securities (collectively, the
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"Global Certificates" or each individually, a "Global Certificate"), which have
been deposited with the Property Trustee as custodian for DTC and registered in
the name of Cede & Co. ("Cede") as DTC's nominee. Except as set forth below,
record ownership of a Global Certificate may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.
Except as provided below, owners of beneficial interests in a Global
Certificate will not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form, and will not be considered holders thereof.
Conveyance of notices and other communications by DTC to organizations
who are participants in DTC ("Participants"), by Participants to certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant either directly or
indirectly ("Indirect Participants"), and by Participants and Indirect
Participants to owners of beneficial interests in the Global Certificate held
by DTC will be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time. Redemption
notices shall be sent to Cede. If less than all of the Convertible Preferred
Securities are being redeemed, DTC will reduce the amount of the interest of
each Participant in such Convertible Preferred Securities in accordance with
its procedures.
Although voting with respect to the Convertible Preferred Securities
is limited, in those cases where a vote is required, neither DTC nor Cede will
itself consent or vote with respect to Convertible Preferred Securities. Under
its usual procedures, DTC would mail an Omnibus Proxy to the applicable Issuer
as soon as possible after the record date. The Omnibus Proxy assigns Cede's
consenting or voting rights to those Participants to whose accounts the
Convertible Preferred Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy). The Company and the Issuers believe
that the arrangements among DTC, Participants and Indirect Participants, and
owners of beneficial interests in the Global Certificate held by DTC will
enable such beneficial owners to exercise rights equivalent in substance to the
rights that can be directly exercised by a holder of a beneficial interest in
the respective Issuers.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company and the Issuers believe
to be reliable, but neither the Company nor the Issuers take responsibility for
the accuracy thereof.
Distribution payments on the Global Certificates will be made to Cede,
the nominee for DTC, as the registered owner of the Global Certificates by wire
transfer of immediately available funds. Neither the Company, the Property
Trustee nor any paying agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Certificates or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
The Company has been informed by DTC that, with respect to any
distribution payments on the Global Certificates, DTC's practice is to credit
Participants' accounts on the payment date therefor with payments in amounts
proportionate to their respective beneficial interests in the Convertible
Preferred Securities represented by a Global Certificate, as shown on the
records of DTC, unless DTC has reason to believe that it will not receive
payment on such payment date. Payments by Participants to owners of beneficial
interests in Convertible Preferred Securities represented by a Global
Certificate held through such Participants will be the responsibility of such
Participants, as is not the case with securities held for the accounts of
customers registered in "street name."
Holders who desire to convert their Convertible Preferred Securities
into Common Stock pursuant to the terms of the Convertible Preferred Securities
should contact their brokers or other Participants or Indirect Participants to
obtain information on procedures, including proper forms and cut-off times, for
submitting such requests.
Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants
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and certain banks, the ability of a person having a beneficial interest in
Convertible Preferred Securities represented by a Global Certificate to pledge
such interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect to such interest, may be affected
by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Property Trustee (or any registrar, paying
agent or conversion agent under the applicable Declaration) will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing their operations. DTC has advised the Company that it will take any
action permitted to be taken by a holder of Convertible Preferred Securities
(including, without limitation, the presentation of Convertible Preferred
Securities for exchange as described below) only at the direction of one or
more Participants to whose account with DTC interests in the Global Certificate
are credited and only in respect of the number of Convertible Preferred
Securities represented by the Global Certificates as to which such Participant
or Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Participants in DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its Participants and by the NYSE, the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly. The rules
applicable to DTC and its Participants are on file with the SEC.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Certificates among Participants
of DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. If DTC is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
cause the Convertible Preferred Securities to be issued in definitive form in
exchange for the Global Certificates. None of the Company, the Property Trustee
nor any of their respective agents will have any responsibility for the
performance by DTC, their Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations, including maintaining, supervising or reviewing the records
relating to, or payments made on account of, beneficial ownership interests in
the Global Certificate.
Certificated Convertible Preferred Securities. Certificated securities
may be issued in exchange for Convertible Preferred Securities represented by
the Global Certificate if no successor depositary is appointed by the Company
as set forth above under "--Global Certificate; Book-Entry Form" or in certain
other circumstances set forth in each Declaration.
PAYMENT AND PAYING AGENCY
Payments in respect of the Convertible Preferred Securities shall be
made to DTC, which shall credit the relevant accounts at DTC on the applicable
distribution dates or, in the case of certificated securities, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. The Paying Agent shall initially be
The Bank of New York. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Issuer Trustees. In the event that
The Bank of New York shall no longer be the Paying Agent, the Trustee shall
appoint a successor to act as Paying
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Agent (which shall be a bank or trust company).
REGISTRAR, TRANSFER AGENT AND CONVERSION AGENT
Upon their issuance The Bank of New York will act as registrar,
transfer agent and conversion agent (the "Conversion Agent") for the
Convertible Preferred Securities. Registration of transfers of Convertible
Preferred Securities will be effected without charge by or on behalf of an
Issuer, but upon payment (with the giving of such indemnity as the Issuer or
the Company may require) in respect of any tax or other government charges
which may be imposed in relation to it. An Issuer will not be required to
register or cause to be registered the transfer of Convertible Preferred
Securities after such Convertible Preferred Securities have been called for
redemption.
INFORMATION CONCERNING THE TRUSTEE
The Company and certain of its subsidiaries maintain deposit accounts
and conduct other banking transactions with the Trustee in the ordinary course
of their businesses.
MISCELLANEOUS
Each Issuer's Issuer Trustees are authorized and directed to conduct
the affairs of and to operate the respective Issuer in such a way that such
Issuer will not be deemed to be an "investment company" required to be
registered under the 1940 Act or characterized as other than a grantor trust
for federal income tax purposes and so that the Convertible Junior Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Issuer Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust or the Declaration that such Issuer Trustees determine in
their discretion to be necessary or desirable for such purposes as long as such
action does not adversely affect the interests of the holders of the
Convertible Preferred Securities.
Holders of the Convertible Preferred Securities have no preemptive
rights.
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DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees
that will be executed and delivered by the Company for the benefit of the
holders from time to time of Convertible Preferred Securities. Each Guarantee
will be separately qualified under the Trust Indenture Act and will be held by
The Bank of New York, acting in its capacity as indenture trustee with respect
thereto, for the benefit of holders of the Convertible Preferred Securities of
the applicable Issuer. The terms of each Guarantee will be those set forth in
such Guarantee and those made part of such Guarantee by the Trust Indenture
Act. This description summarizes the material terms of the Guarantees and is
qualified in its entirety by reference to the form of Guarantee, which is filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, any prospectus supplement and the Trust Indenture Act.
GENERAL
The particular terms of each Guarantee, as well as any modifications
of or additions to the general terms of the Guarantees as described herein that
may be applicable to a particular Issuer's Trust Securities, will be described
in the Prospectus Supplement relating to such Trust Securities. Accordingly,
for a description of the terms of the Guarantee relating to a particular
Issuer's Trust Securities reference must be made to both the Prospectus
Supplement relating thereto and the description of the Guarantees set forth in
this Prospectus.
Pursuant to each Guarantee, the Company irrevocably and
unconditionally agrees, to the extent set forth herein or in any Prospectus
Supplement, to pay in full, to the holders of the Convertible Preferred
Securities, the Guarantee Payments (as defined below), as and when due,
regardless of any defense, right of set off or counterclaim which the Issuer
may have or assert. The following payments with respect to the Convertible
Preferred Securities, to the extent not paid by an Issuer (the "Guarantee
Payments"), are subject to each Guarantee (without duplication): (i) any
accrued and unpaid distributions which are required to be paid on the
Convertible Preferred Securities to the extent of funds of the applicable
Issuer available therefor, (ii) the amount payable upon redemption of the
Convertible Preferred Securities, payable out of funds of the applicable Issuer
available therefor with respect to any Convertible 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 Convertible Junior Subordinated Debentures, the lesser
of (a) the aggregate of the liquidation preference and all accrued and unpaid
dividends on the Convertible Preferred Securities to the date of payment and
(b) the amount of assets of the Issuer remaining available for distribution to
holders of Convertible Preferred Securities upon the liquidation of the Issuer.
The Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Convertible
Preferred Securities or by causing the Issuer to pay such amounts to such
holders.
If the Company fails to make interest payments on the Convertible
Junior Subordinated Debentures or pay amounts payable upon the redemption,
acceleration or maturity of the Convertible Junior Subordinated Debentures, the
applicable Issuer will have insufficient funds to pay distributions on or to
pay amounts payable upon the redemption or repayment of the Convertible
Preferred Securities. The Guarantee does not cover payment of distributions or
the amount payable upon redemption or repayment in respect of the Convertible
Preferred Securities when an Issuer does not have sufficient funds to pay such
distributions or such amount.
In taking any action to enforce a Guarantee, holders of the
Convertible Preferred Securities may proceed directly against the Company as
guarantor, rather than having to proceed against the Issuer before attempting
to collect from the Company, and the Company waives any right or remedy to
require that any action be brought against the Issuer or any other person or
entity before proceeding against the Company. Such obligations will not be
discharged except by payment of the Guarantee Payments in full.
Each Guarantee, when taken together with the Company's obligations
under the Convertible Junior Subordinated Debentures, and the Indenture and the
applicable Declaration, including its obligations to pay costs, expenses, debts
and liabilities of the Issuer (other than with respect to the Trust Securities)
will provide
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a full and unconditional guarantee on a subordinated basis by the Company of
payments due on the Convertible Preferred Securities to be issued by each
Issuer.
The Company has also agreed separately to irrevocably and
unconditionally guarantee the obligations of each Trust with respect to the
Common Securities (the "Common Securities Guarantee") to the same extent as the
Guarantee, except that upon the occurrence and during the continuation of a
Declaration Event of Default, holders of Convertible Preferred Securities shall
have priority over holders of Common Securities with respect to distributions
and payments on liquidation, redemption, or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any
Convertible Preferred Securities remain outstanding, if at such time (a) the
Company has exercised its option to defer interest payments on the Convertible
Junior Subordinated Debentures and such deferral is continuing, (b) the Company
shall be in default with respect to its payment or other obligations under a
Guarantee or (c) there shall have occurred and be continuing any event that,
with the giving of notice or the lapse of time or both, would constitute an
Event of Default under the Indenture, then the Company (i) shall not declare or
pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (A) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans, (B) as a result of a reclassification of capital stock
of the Company or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of capital stock of the
Company, (C) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock of the Company or the security being converted or exchanged or (D) stock
dividends paid by the Company which consist of the stock of the same class as
that on which the dividend is being paid), (ii) shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company after the date of original issuance of
the Convertible Junior Subordinated Debentures that rank pari passu with or
junior to the Convertible Junior Subordinated Debentures, and (iii) shall not
make any guarantee payments with respect to the foregoing (other than pursuant
to the Guarantee).
As part of each Guarantee, the Company will agree that it will honor
all obligations described therein relating to the conversion of the Convertible
Preferred Securities into Common Stock as described in "Description of the
Convertible Preferred Securities--Conversion Rights."
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of Convertible Preferred Securities (in which case
no consent of holders will be required), each Guarantee may be changed only
with the prior approval of the holders of not less than a majority in aggregate
stated liquidation preference of the outstanding Convertible Preferred
Securities issued by the applicable Issuer. The manner of obtaining any such
approval of holders of the Convertible Preferred Securities will be as set
forth under "Description of the Convertible Preferred Securities--Voting
Rights." All guarantees and agreements contained in the Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Convertible Preferred
Securities then outstanding. Except in connection with any permitted merger or
consolidation of the Company with or into another entity or any permitted sale,
transfer or lease of the Company's assets to another entity as described below
under "Description of the Convertible Junior Subordinated
Debentures--Restrictions," the Company may not assign its rights or delegate
its obligations under any Guarantee without the prior approval of the holders
of at least a majority of the aggregate stated liquidation preference of the
Convertible Preferred Securities issued by the applicable Issuer.
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TERMINATION OF THE GUARANTEE
Each Guarantee will terminate as to each holder of Convertible
Preferred Securities and be of no further force and effect upon (a) full
payment of the applicable redemption price of such holder's Convertible
Preferred Securities, (b) the distribution of Common Stock to such holder in
respect of the conversion of such holder's Convertible Preferred Securities
into Common Stock or (c) the distribution of the Convertible Junior
Subordinated Debentures to the holders of all the Convertible Preferred
Securities and will terminate completely upon full payment of the amounts
payable upon liquidation of the Issuer. Notwithstanding the foregoing, each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Convertible Preferred Securities must restore
payment of any sums paid under such Convertible Preferred Securities or the
Guarantee.
STATUS OF THE GUARANTEE; SUBORDINATION
Each Guarantee will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, except any liabilities that may be made pari passu
expressly by their terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock or preferred securities of any affiliate of the Company and
(iii) senior to Common Stock. Each Declaration will provide that each holder of
Convertible Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the applicable Guarantee. Upon the
bankruptcy, liquidation or winding up of the Company, its obligations under the
applicable Guarantee will rank junior to all its other liabilities (except as
aforesaid) and, therefore, funds may not be available for payment under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default,
undertakes to perform only such duties as are specifically set forth in the
applicable Guarantee and, after default with respect to the Guarantee, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by
the Guarantee at the request of any holder of Convertible Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
GOVERNING LAW
Each Guarantee will be governed by, and construed in accordance with,
the laws of the State of New York.
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DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
Convertible Junior Subordinated Debentures, in which the Issuer will
invest with the proceeds of the issuance and sale of (i) the Convertible
Preferred Securities and (ii) the Common Securities, may be issued from time to
time in one or more series under an Indenture (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Indenture Trustee"). The
form of Convertible Junior Subordinated Debentures Indenture has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The following description summarizes the material terms of the Indenture, and
is qualified in its entirety by reference to the Indenture, any Prospectus
Supplement and the Trust Indenture Act. Whenever particular provisions or
defined terms in the Indenture are referred to herein, such provisions or
defined terms are incorporated by reference herein.
The particular terms of each series of Junior Subordinated Debentures,
as well as any modifications of or additions to the general terms of the Junior
Subordinated Debentures, will be described in the Prospectus Supplement
relating to such series of Trust Securities. Accordingly, for a description of
the terms of a particular series of Junior Subordinated Debentures, reference
must be made to both the Prospectus Supplement relating to the Trust Securities
and the description of the Junior Subordinated Debentures set forth in this
Prospectus.
Under certain circumstances involving the dissolution of an Issuer
following the occurrence of a Tax Event or Investment Company Event,
Convertible Junior Subordinated Debentures may be distributed to the holders of
the Convertible Preferred Securities in liquidation of an Issuer. See
"Description of the Convertible Preferred Securities--Tax Event or Investment
Company Event Redemption or Distribution."
GENERAL
The Indenture will not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that Convertible
Junior Subordinated Debentures may be issued thereunder from time to time in
one or more series. The Convertible Junior Subordinated Debentures are issuable
in one or more series pursuant to an indenture supplemental to the Indenture.
The Convertible Junior Subordinated Debentures applicable to each Issuer will
be limited in aggregate principal amount the sum of the aggregate stated
liquidation preference of the Convertible Preferred Securities and the Common
Securities for such Issuer.
The entire principal amount of the Convertible Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including Additional Interest, if any, at the applicable
Stated Maturity for each Issuer, subject to the Company's right to shorten the
maturity thereof as described under "Description of the Convertible Preferred
Securities--Conditional Right to Shorten Maturity; Tax Event Redemption and
Investment Company Event Distribution."
In the event Convertible Junior Subordinated Debentures are issued to
an Issuer or a Trustee of such Issuer in connection with the issuance of Trust
Securities by such Issuer, such Convertible Junior Subordinated Debentures
subsequently may be distributed pro rata to the holders of such Trust
Securities in connection with the dissolution of such Issuer upon the
occurrence of certain events described in the Prospectus Supplement relating to
such Trust Securities. Only one series of Convertible Junior Subordinated
Debentures will be issued to an Issuer or a Trustee of such Issuer in
connection with the issuance of Trust Securities by such Issuer.
Reference is made to the Prospectus Supplement which will accompany
this Prospectus for the following terms of the series of Convertible Junior
Subordinated Debentures being offered thereby (to the extent such terms are
applicable to the Convertible Junior Subordinated Debentures): (i) the specific
designation of such Convertible Junior Subordinated Debentures, aggregate
principal amount, purchase price and premium, if any; (ii) any limit on the
aggregate principal amount of such Convertible Junior Subordinated Debentures;
(iii)
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the date or dates on which the principal of such Convertible Junior
Subordinated Debentures is payable and the right, to extend or defer such date
or dates; (iv) the rate or rates at which such Convertible Junior Subordinated
Debentures will bear interest or the method of calculating such rate or rates,
if any; (v) 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 dates for the
determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, to extend the interest payment periods
and the duration of such extension; (vii) the period or periods within which,
the price or prices at which, and the terms and conditions upon which, such
Convertible Junior Subordinated Debentures may be redeemed, in whole or in
part, at the option of the Company; (viii) the obligation, if any, of the
Company to redeem or purchase such Convertible Junior Subordinated Debentures
pursuant to any sinking fund or analogous provisions or at the option of the
holder thereof and the period or periods for which, the price or prices at
which, and the terms and conditions upon which, such Convertible Junior
Subordinated Debentures shall be redeemed or purchased, in whole or part,
pursuant to such obligation; (ix) any exchangeability, conversion or prepayment
provisions of the Convertible Junior Subordinated Debentures; (x) any
applicable United States federal income tax consequences, including whether and
under what circumstances the Company will pay additional amounts on the
Convertible Junior Subordinated Debentures held by a person who is not a U.S.
person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to redeem such
Convertible Junior Subordinated Debentures rather than pay such additional
amounts; (xi) the form of such Convertible Junior Subordinated Debentures;
(xii) if other than denominations of $50 or any integral multiple thereof, the
denominations in which such Convertible Junior Subordinated Debentures shall be
issuable; (xiii) any and all other terms with respect to such series, including
any modification of or additions to the events of default or covenants provided
for with respect to such series, including any modification of or additions to
the events of default or covenants provided for with respect to the Convertible
Junior Subordinated Debentures, and any terms which may be required by or
advisable under applicable laws or regulations not inconsistent with the
Indenture; and (xiv) whether such Convertible Junior Subordinated Debentures
are issuable as a global security, and in such case, the identity of the
depositary.
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Convertible Junior Subordinated Debentures will, if distributed to
holders of Convertible Preferred Securities in a dissolution of an Issuer, will
initially be issued as a global security to the extent of any Global
Certificates at the time representing any Convertible Preferred Securities and
otherwise in fully registered, certificated form. In the event that Convertible
Junior Subordinated Debentures are issued in certificated form, such
Convertible Junior Subordinated Debentures will be denominations of $50 and
integral multiples thereof and may be transferred or exchanged at the offices
described below.
Payments on Convertible Junior Subordinated Debentures issued as a
global security will be made in immediately available funds to DTC, as the
depository for the Convertible Junior Subordinated Debentures. In the event
Convertible Junior Subordinated Debentures are issued in certificated form,
principal and interest will be payable, the transfer of the Convertible Junior
Subordinated Debentures will be registrable and Convertible Junior Subordinated
Debentures will be exchangeable for Convertible Junior Subordinated Debentures
of other denominations of a like aggregate principal amount at the corporate
trust office of the Indenture Trustee in The City of New York; provided that,
unless the Convertible Junior Subordinated Debentures are held by the Issuer or
any successor permissible under "Description of the Convertible Preferred
Securities -- Merger, Consolidation or Amalgamation of the Issuer," payment of
interest may be made at the option of the Company by check mailed to the
address of the persons entitled thereto.
The Indenture does not contain any provisions that afford holders of
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged transaction involving the Company. The Convertible Junior
Subordinated Debentures are not entitled to the benefit of any sinking fund.
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INTEREST
Convertible Junior Subordinated Debentures will bear interest from
their date of issuance, payable quarterly in arrears on March 1, June 1,
September 1 and December 1 (unless otherwise set forth in a Prospectus
Supplement (each, an "Interest Payment Date"), commencing on the date set forth
in the applicable Prospectus Supplement, to the person in whose name such
Convertible Junior Subordinated Debenture is registered at the close of
business on the fifteenth day immediately preceding such Interest Payment Date.
Interest will compound quarterly and will accrue at the annual rate set forth
in the applicable Prospectus Supplement on any interest installment not paid
when due. 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 Convertible Junior Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (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.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company shall have the right, with respect to each Issuer, at any
time during the term of such Issuer's Convertible Junior Subordinated
Debentures to defer interest payments from time to time for successive periods
not exceeding 20 consecutive quarters for each such period. At the end of each
Deferral Period (subject to extensions as provided below), the Company shall
pay all interest then accrued and unpaid (together with interest thereon at the
rate specified for the Convertible Junior Subordinated Debentures to the extent
permitted by applicable law). In no event shall any Deferral Period extend
beyond the maturity of the Convertible Junior Subordinated Debentures or any
earlier Redemption Date. During any Deferral Period, the Company (i) shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than (A) purchases or acquisitions of shares of Common
Stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plans, (B) as a result of a reclassification of
capital stock of the Company or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of capital
stock of the Company, (C) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock of the Company or the security being converted or exchanged
or (D) stock dividends paid by the Company which consist of the stock of the
same class as that on which the dividend is being paid), (ii) shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by the Company that rank pari passu with
or junior to the Convertible Junior Subordinated Debentures, and (iii) shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the expiration of any such Deferral
Period, the Company may further extend such Deferral Period; provided that such
Deferral Period together with all previous and further extensions thereof may
not exceed 20 consecutive quarters. Upon the expiration of any Deferral Period
and the payment of all amounts then due, the Company may select a new Deferral
Period, subject to the above requirements. No interest during a Deferral
Period, except at the end thereof, shall be due and payable. If the Issuer
shall be the sole holder of the Convertible Junior Subordinated Debentures, the
Company shall give the Issuer notice of its selection of such Deferral Period
at least one Business Day prior to the earlier of (i) the date the
distributions on the Convertible Preferred Securities are payable or (ii) the
date the Issuer is required to give notice to any applicable self-regulatory
organization or to holders of the Convertible Preferred Securities of the
record date or the date such distribution is payable, but in any event not less
than ten Business Days prior to such record date. The Company shall cause the
Issuer to give notice of the Company's selection of such Deferral Period to the
holders of the Convertible Preferred Securities. If the Issuer shall not be the
sole holder of the Convertible Junior Subordinated Debentures, the Company
shall give the holders of the Convertible Junior Subordinated Debentures notice
of its selection of such Deferral Period at least ten Business Days prior to
the earlier of (i) the Interest Payment Date or (ii) the date the Company is
required to give notice to any applicable self-regulatory organization or to
holders of the Convertible Junior Subordinated Debentures of the record or
payment date of such related interest payment, but
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in any event not less than two Business Days prior to such record date.
ADDITIONAL INTEREST
If an Issuer would be required to pay any taxes, duties, assessments
or governmental charges of whatever nature (other than withholding, transfer or
stamp taxes) imposed by the United States, or any other taxing authority, then,
in any such case, the Company will pay as additional interest ("Additional
Interest") such amounts as shall be required so that the net amounts received
and retained by the Issuer after paying any such taxes, duties, assessments or
governmental charges will be not less than the amounts the Issuer would have
received had no such taxes, duties, assessments or governmental charges been
imposed.
CONVERSION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
The Convertible Junior Subordinated Debentures of an Issuer to be
issued pursuant to the Indenture are convertible into Common Stock at the
option of the holders of the Convertible Junior Subordinated Debentures at any
time beginning 60 days following the first date of original issuance of the
Issuer's Convertible Junior Subordinated Debentures prior to maturity (except
in the case of Convertible Preferred Securities called for redemption which
shall be convertible at any time prior to the close of business on the Business
Day prior to the redemption date) at the initial conversion price set forth in
the applicable Prospectus Supplement subject to the conversion price
adjustments described under "Description of the Convertible Preferred
Securities--Conversion Rights." The Issuer will covenant not to convert
Convertible Junior Subordinated Debentures held by it except pursuant to a
notice of conversion delivered to the Conversion Agent by a holder of
Convertible Preferred Securities. Upon surrender of each $50 of liquidation
preference of Convertible Preferred Securities to the Conversion Agent for
conversion, the Issuer will distribute $50 principal amount of the Convertible
Junior Subordinated Debentures (or such other amounts if set forth in an
applicable Prospectus Supplement) to the Conversion Agent on behalf of the
holder of the Convertible Preferred Securities so converted, whereupon the
Conversion Agent will convert such Convertible Junior Subordinated Debentures
to Common Stock on behalf of such holder. The Company's delivery to the holders
of the Convertible Junior Subordinated Debentures (through the Conversion
Agent) of the fixed number of shares of Common Stock into which the Convertible
Junior Subordinated Debentures are convertible (together with the cash payment,
if any, in lieu of fractional shares) will be deemed to satisfy the Company's
obligation to pay the principal amount of the Convertible Junior Subordinated
Debentures so converted, and the accrued and unpaid interest thereon
attributable to the period from the last date to which interest has been paid
or duly provided for; provided, however, that if any Convertible Junior
Subordinated Debenture is converted after a record date for payment of
interest, the interest payable on the related interest payment date with
respect to such Convertible Junior Subordinated Debenture shall be paid to the
Issuer (which will distribute such interest to the converting holder) or other
holder of Convertible Junior Subordinated Debentures, as the case may be,
despite such conversion.
OPTIONAL REDEMPTION
Pursuant to the Indenture, the Company shall have the right to redeem
the Convertible Junior Subordinated Debentures, in whole or in part, on terms
described in each supplemental Indenture.
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Convertible
Junior Subordinated Debenture during a period beginning at the opening of
business 15 days before any selection for redemption of Convertible Junior
Subordinated Debentures and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all holders of Convertible Junior Subordinated Debentures to be so redeemed and
(ii) register the transfer of or exchange any Convertible Junior Subordinated
Debentures so selected for redemption, in whole or in part, except the
unredeemed portion of any Convertible Junior Subordinated Debenture being
redeemed in part.
SUBORDINATION
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The Indenture provides that the Convertible Junior Subordinated
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness of the Company as provided in the Indenture. No payment of
principal of (including redemption payments), or interest on, the Convertible
Junior Subordinated Debentures may be made (i) if any Senior Indebtedness is
not paid when due, any applicable grace period with respect to such default has
ended and such default has not been cured or waived, or (ii) if the maturity of
any Senior Indebtedness has been accelerated because of a default. Upon any
distribution of assets of the Company to creditors upon any dissolution,
winding up, liquidation or reorganization, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all principal of,
and premium, if any, and interest due or to become due on, all Senior
Indebtedness must be paid in full before the holders of the Convertible Junior
Subordinated Debentures are entitled to receive or retain any payment. In the
event that, notwithstanding the foregoing, any payment or distribution of cash,
property or securities shall be received or collected by a holder of the
Convertible Junior Subordinated Debentures in contravention of the foregoing
provisions, such payment or distribution shall be held for the benefit of and
shall be paid over to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instrument evidencing Senior Indebtedness may have
been issued, as their respective interests may appear, to the extent necessary
to pay in full all Senior Indebtedness then due, after giving effect to any
concurrent payment to the holders of Senior Indebtedness. Subject to the
payment in full of all Senior Indebtedness, the rights of the holders of the
Convertible Junior Subordinated Debentures will be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions
applicable to Senior Indebtedness until all amounts owing on the Convertible
Junior Subordinated Debentures are paid in full.
The term "Senior Indebtedness" shall mean in respect of the Company
(i) the principal, premium, if any, and interest in respect of (A) indebtedness
of such obligor for money borrowed and (B) indebtedness evidenced by
securities, convertible preferred securities, bonds or other similar
instruments issued by such obligor, (ii) all capital lease obligations of such
obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement of 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) above of other persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise, and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of such obligor (whether
or not such obligation is assumed by such obligor), except for (1) any such
indebtedness issued after the date of original issuance of the Convertible
Junior Subordinated Debentures that is by its terms subordinated to or pari
passu with the Convertible Junior Subordinated Debentures and (2) any
indebtedness (including all other debt securities and guarantees in respect of
those debt securities) initially issued to any other trust, or a trustee of
such trust, partnership or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle of the Company (a "Financing
Entity") in connection with the issuance by such Financing Entity of preferred
securities or other similar securities. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior
Indebtedness the Company may issue.
CERTAIN COVENANTS
If Convertible Junior Subordinated Debentures are issued to an Issuer
in connection with the issuance of Trust Securities by such Trust, the Company
will covenant in the Indenture that if (a) there shall have occurred any event
that would constitute an Event of Default, (b) the Company shall be in default
with respect to its payment of any obligations under the applicable Guarantee,
or (c) the Company shall have given notice of its election to defer payments of
interest on the Convertible Junior Subordinated Debentures by extending the
interest payment period as provided in the Indenture and such period, or any
extension thereof, shall be continuing, then the Company (i) shall not declare
or pay dividends on, make distributions with respect to, or
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redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock (other than (A) purchases or acquisitions of shares
of Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (B) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of capital stock of the Company, (C) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock of the Company or the security
being converted or exchanged or (D) stock dividends paid by the Company which
consist of stock of the same class as that on which the dividend is being
paid), (ii) shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the
Company after the date of original issuance of the Convertible Junior
Subordinated Debentures for each Issuer that rank pari passu with or junior to
the Convertible Junior Subordinated Debentures, and (iii) shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee).
The Company will also covenant (a) to directly or indirectly maintain
100% ownership of the Common Securities of each Issuer; provided, however, that
any permitted successor of the Company under the Indenture may succeed to the
Company's ownership of such Common Securities and (b) to use its reasonable
efforts to cause each Issuer (x) to remain a statutory business trust, except
in connection with the distribution of Convertible Junior Subordinated
Debentures to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (y)
to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes.
RESTRICTIONS
The Indenture provides that the Company shall not consolidate with or
merge with or into any other corporation, or, directly or indirectly, convey,
sell, transfer or lease all or substantially all of the properties and assets
of the Company on a consolidated basis to any person, unless either the Company
is the continuing corporation or such corporation or person assumes by
supplemental indenture all the obligations of the Company under the Indenture
and the Convertible Junior Subordinated Debentures, no default or Event of
Default shall exist immediately after the transaction, and the surviving
corporation or such person is a corporation, partnership or trust organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia.
EVENTS OF DEFAULT
The Indenture also provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an "Event
of Default" with respect to the applicable Convertible Junior Subordinated
Debentures: (i) failure for 30 days to pay interest on the Convertible Junior
Subordinated Debentures, including any Additional Interest in respect thereof,
when due; or (ii) failure to pay principal of or premium, if any, on the
Convertible Junior Subordinated Debentures when due whether at maturity, upon
redemption, by declaration or otherwise; or (iii) failure by the Company to
deliver shares of Common Stock upon an election by a holder of Convertible
Preferred Securities to convert such Convertible Preferred Securities; or (iv)
failure to observe or perform any other covenant contained in the Indenture for
90 days after notice; or (v) the dissolution, winding up or termination of the
Issuer, except in connection with the distribution of Convertible Junior
Subordinated Debentures to the holders of Convertible Preferred Securities in
liquidation of the Issuer and in connection with certain mergers,
consolidations or amalgamations permitted by the Declaration; or (vi) certain
events in bankruptcy, insolvency or reorganization of the Company.
The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of a series of the Convertible Junior Subordinated
Debentures may declare the principal of and interest (including any Additional
Interest) on such Convertible Junior Subordinated Debentures due and payable
immediately on the occurrence of an Event of Default; provided, however, that,
after such acceleration, but before a judgment or decree based on acceleration,
the holders of a majority in aggregate principal amount of outstanding
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Convertible Junior Subordinated Debentures may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
nonpayment of accelerated principal, have been cured or waived as provided in
the Indenture. For information as to waiver of defaults, see "--Modification of
the Indenture."
Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Company to
pay interest or principal on the affected Convertible Junior Subordinated
Debentures on the date such interest or principal is otherwise payable (or in
the case of any redemption, the redemption date), a holder of Convertible
Preferred Securities may institute a Direct Action for payment on or after the
respective due date (or redemption date) specified in the Convertible Junior
Subordinated Debentures. The Company may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
all the holders of Convertible Preferred Securities. Notwithstanding any
payment made to such holder of Convertible Preferred Securities by the Company
in connection with a Direct Action, the Company shall remain obligated to pay
the principal of or interest on the Convertible Junior Subordinated Debentures
held by the Issuer or the Trustee of the Issuer and the Company shall be
subrogated to the rights of the holder of such Convertible Preferred Securities
with respect to payments on the Convertible Preferred Securities to the extent
of any payments made by the Company to such holder in any Direct Action. The
holders of Convertible Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the affected Convertible
Junior Subordinated Debentures.
The Trustee will be the initial holder of the Convertible Junior
Subordinated Debentures. However, whenever Convertible Preferred Securities are
outstanding, the Trustee has agreed not to waive an Event of Default with
respect to the Convertible Junior Subordinated Debentures without the consent
of holders of a majority in aggregate liquidation preference of the affected
Convertible Preferred Securities then outstanding.
A default under any other indebtedness of the Company or any of its
subsidiaries or joint ventures or an Issuer would not constitute an Event of
Default under the Convertible Junior Subordinated Debentures.
Subject to the provisions of the Indenture relating to the duties of
the Indenture Trustee in case an Event of Default shall occur and be
continuing, the Indenture Trustee will be under no obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
holders of affected Convertible Junior Subordinated Debentures, unless such
holders shall have offered to the Indenture Trustee reasonable indemnity.
Subject to such provisions for the indemnification of the Indenture Trustee,
the holders of a majority in aggregate principal amount of the Convertible
Junior Subordinated Debentures then outstanding will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee.
No holder of any Convertible Junior Subordinated Debenture will have
any right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given to the
Indenture Trustee written notice of a continuing Event of Default and, if the
Issuer is not the sole holder of Convertible Junior Subordinated Debentures,
unless the holders of at least 25% in aggregate principal amount of the
affected Convertible Junior Subordinated Debentures then outstanding shall also
have made written request, and offered reasonable indemnity, to the Indenture
Trustee to institute such proceeding as Indenture Trustee, and the Indenture
Trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Convertible Junior Subordinated Debentures
a direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. However, such limitations do not apply to a
suit instituted by a holder of a Convertible Junior Subordinated Debenture for
enforcement of payment of the principal of or interest on such Convertible
Junior Subordinated Debenture on or after the respective due dates expressed in
such Convertible Junior Subordinated Debenture.
The holders of a majority in aggregate outstanding principal amount of
all series of the Convertible Junior Subordinated Debentures affected thereby
may, on behalf of the holders of all the Convertible Junior Subordinated
Debentures of such series, waive any past default, except a default in the
payment of principal, premium, if any, or interest. The Company is required to
file annually with the Indenture Trustee and the
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Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants under the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of the affected Convertible Junior Subordinated Debentures,
to modify the Indenture or any supplemental indenture, provided that no such
modification may, without the consent of the holder of each outstanding
Convertible Junior Subordinated Debenture affected thereby, (i) extend the
fixed maturity of any Convertible Junior 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, or adversely affect the right to convert Convertible Junior
Subordinated Debentures, without the consent of the holder of each Convertible
Junior Subordinated Debenture so affected, or (ii) reduce the percentage of
Convertible Junior Subordinated Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of each Convertible Junior Subordinated Debenture then outstanding and
affected thereby.
In addition, the Company and the Indenture Trustee may execute,
without the consent of any holder of Convertible Junior Subordinated
Debentures, any supplemental indenture to cure any ambiguities, comply with the
Trust Indenture Act and for certain other customary purposes.
SETOFF
Notwithstanding anything contained to the contrary in the Indenture,
the Company will have the right to set off any payment with respect to the
Convertible Junior Subordinated Debentures it is otherwise required to make
thereunder with and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under an applicable
Guarantee.
GOVERNING LAW
The Indenture and the Convertible Junior Subordinated Debentures will
be governed by, and construed in accordance with, the laws of the State of New
York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, has undertaken to perform
only such duties as are specifically set forth in the Indenture and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provision,
the Indenture Trustee is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Convertible
Junior Subordinated Debentures, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Indenture Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of its
duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
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EFFECT OF OBLIGATIONS UNDER THE CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES
As set forth in each Declaration, the sole purpose of each Issuer is
to issue the Trust Securities and use the proceeds thereof to purchase from the
Company the Convertible Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due
on the Convertible Junior Subordinated Debentures, such payments will be
sufficient to cover distributions and payments due on the Convertible Preferred
Securities primarily because (i) the aggregate principal amount of Convertible
Junior Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation preference of the Convertible Preferred Securities and the Common
Securities; (ii) the interest rate and interest and other payment dates on the
Convertible Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Convertible Preferred Securities;
(iii) the Indenture provides that the Company, as originator, shall pay for
all, and each Issuer shall not be obligated to pay, directly or indirectly, for
any costs and expenses of such Issuer; and (iv) each Declaration provides that
the holders of Common Securities and the Issuer Trustees shall not cause or
permit each Issuer to, among other things, engage, in any activity that is not
consistent with the purposes of such Issuer.
If an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest or principal on
the Convertible Junior Subordinated Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Convertible Preferred Securities may institute a Direct
Action against the Company for payment on or after the respective due date for
payment (or redemption date). In addition, if the Trustee fails to enforce its
rights under the Convertible Junior Subordinated Debentures (other than rights
arising from a Declaration Event of Default described in the immediately
preceding sentence) after any holder of Preferred Securities shall have made a
written request to the Trustee to enforce such rights, such holder of
Convertible Preferred Securities may, to the fullest extent permitted by law,
thereafter institute a Direct Action to enforce the Trustee's rights as holder
of the Convertible Junior Subordinated Debentures, without first instituting
any legal proceeding against the Trustee or any other person.
Payments of distributions and other payments due on the Convertible
Preferred Securities out of moneys held by each Issuer are guaranteed by the
Company to the extent set forth under "Description of the Guarantees." If the
Company fails to make payments under a Guarantee, a holder of any of the
applicable Convertible Preferred Securities may institute a Direct Action
against the Company to enforce its rights under the Guarantee.
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PLAN OF DISTRIBUTION
The Company may sell the Convertible Junior Subordinated Debentures
and the Issuers may sell the Convertible Preferred Securities in any of the
following ways (or in any combination thereof): (i) through underwriters or
dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement with respect to
any Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters, dealers or agents
and the respective amounts of such Offered Securities underwritten or purchased
by each of them, the initial public offering price of such Offered Securities
and the proceeds to the Company from such sale, any discounts, commissions or
other items constituting compensation from the Company and any discounts,
commissions or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Offered Securities may be listed.
If underwriters are used in the sale of any Offered Securities, such
Offered Securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. Such Offered Securities may be either offered
to the public through underwriting syndicates represented by managing
underwriters, or directly by underwriters.
Offered Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
purchasers to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement.
Agents, dealers and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof.
LEGAL MATTERS
Unless otherwise indicated in an applicable Prospectus Supplement, the
validity of the Convertible Junior Subordinated Debentures, the Guarantees and
any Common Stock issuable upon conversion of such Convertible Junior
Subordinated Debentures will be passed upon for the Company and the respective
Issuers by Steven A. McArthur, Senior Vice President and General Counsel of the
Company, and by Willkie Farr & Gallagher. Certain matters of Delaware law
relating to the validity of the Convertible Preferred Securities will be passed
upon for the Issuers by Morris, Nichols, Arsht & Tunnell. As of August 31,
1997, Mr. McArthur beneficially owned 123,542 shares of Common Stock.
EXPERTS
The consolidated financial statements and financial statement
schedules of the Company and its subsidiaries incorporated by reference in this
Registration Statement by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
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With respect to the Company's unaudited interim financial information
for the periods ended March 31, 1997 and 1996 and June 30, 1997 and 1996,
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, and incorporated by reference herein, they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
LLP are not subject to the liability provisions of Section 11 of the Securities
Act for their reports on the unaudited interim financial information because
those reports are not "reports" or a "part" of the Registration Statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Securities Act.
The consolidated financial statements of Northern Electric plc as of
March 31, 1996 and 1995, and for each of the three years in the period ended
March 31, 1996, appearing in the Company's Report on Form 8-K/A dated February
18, 1997, have been audited by Ernst & Young, chartered accountants, as stated
in their report which is included therein and incorporated herein by reference.
Such financial statements have been incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
With respect to Northern's unaudited condensed consolidated financial
statements at September 30, 1996, and for the six months ended September 30,
1996 and 1995, incorporated by reference in this Prospectus, Ernst & Young
chartered accountants have reported that they have applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate report, included in the Company's Current Report on
Form 8-K/A dated February 18, 1997, and incorporated herein by reference,
states that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted considering the limited nature
of the review procedures applied. Ernst & Young are not subject to the
liability provisions of Section 11 of the Securities Act for their report on
the unaudited interim financial information because that report is not a
"report" or a "part" of the Registration Statement prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Securities Act.
The consolidated statements of operations, changes in stockholders'
equity, and cash flows of Magma Power Company, and subsidiaries for the year
ended December 31, 1994, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
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==============================================================================
NO DEALER, SALESPERSON OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY ISSUER OR ANY OF THEIR
AGENTS. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN CONVERTIBLE
OFFER TO SELL OR A SOLICITATION OF AN PREFERRED SECURITIES
OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH CALENERGY CAPITAL TRUST IV
JURISDICTION. NEITHER THE DELIVERY OF CALENERGY CAPITAL TRUST V
THIS PROSPECTUS NOR ANY PROSPECTUS CALENERGY CAPITAL TRUST VI
SUPPLEMENT NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR
THEREUNDER IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THEREOF
OR THAT THERE HAS BEEN NO CHANGE IN THE GUARANTEED TO THE EXTENT
AFFAIRS OF THE COMPANY OR ANY ISSUER SET FORTH HEREIN BY
SINCE SUCH DATE. AND CONVERTIBLE INTO
COMMON STOCK OF
--------------------
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION...............................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.....4 [LOGO]
RISK FACTORS........................................5
THE ISSUERS........................................15
THE COMPANY........................................16
RATIO OF EARNINGS TO FIXED CHARGES.................17
ACCOUNTING TREATMENT...............................17
USE OF PROCEEDS....................................17 CALENERGY COMPANY, INC.
DESCRIPTION OF THE CONVERTIBLE PREFERRED
SECURITIES........................................18
DESCRIPTION OF THE GUARANTEES......................32
DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES........................................35
EFFECT OF OBLIGATIONS UNDER THE CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES AND THE
GUARANTEES........................................43
PLAN OF DISTRIBUTION...............................44
LEGAL MATTERS......................................44 PROSPECTUS
EXPERTS............................................44
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the estimated expenses in connection with the
distribution of the securities being registered hereunder, other than
underwriting discounts and commissions.
AMOUNT
SEC registration fee.......................................... $454,545
Printing, shipping and engraving expenses..................... 350,000
Legal fees and expenses....................................... 500,000
Accounting fees and expenses.................................. 100,000
Transfer Agent, Registrar and trustee fees and expenses....... 50,000
Miscellaneous expenses........................................ 245,455
----------
Total.................................................... $1,700,000
==========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
THE COMPANY
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") grants each corporation organized thereunder, such as the Company,
the power to indemnify its directors and officers against liabilities for
certain of their acts. Article EIGHTH of the Company's Restated Certificate of
Incorporation and Article V of the Company's By-Laws provides for
indemnification of directors and officers of the Company to the extent
permitted by the DGCL. Article V of the Company's By-Laws further provides that
the Registrant may enter into contracts providing indemnification to the full
extent authorized or permitted by the DGCL and that the Company may create a
trust fund, grant a security interest and/or use other means to ensure the
payment of such amounts as may become necessary to effect indemnification
pursuant to such contracts or otherwise.
Section 102(b)(7) of the DGCL permits a provision in the certificate
of incorporation of each corporation organized thereunder, such as the Company,
eliminating or limiting, with certain exceptions, the personal liability of a
director to the corporation or its stockholders for monetary damages for
certain breaches of fiduciary duty as a director. Article EIGHTH of the
Company's Restated Certificate of Incorporation eliminates the personal
liability of directors to the full extent permitted by the DGCL.
The foregoing statements are subject to the detailed provisions of
Sections 145 and 102(b)(7) of the DGCL, Article EIGHTH of the Company's
Restated Certificate of Incorporation and Article V of the Company's By-Laws.
Section 145 of the DGCL empowers a Delaware corporation to indemnify
any persons who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person is or was an officer
or director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
II-1
<PAGE>
provided that such officer or director acted in good faith and in a manner
reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe
his conduct was illegal. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation
in the performance of his duty. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
THE TRUSTS
The Declaration of Trust for each of the Issuers (the "Declaration")
provides that no Trustee, affiliate of any Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agent of the
relevant Issuer, or any employee or agent of the Issuer or its affiliates (each
an "Indemnified Person") shall be liable, responsible or accountable in damages
or otherwise to an Issuer or any employee or agent of the trust or its
affiliates for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by the such Indemnified Person in good faith on
behalf of an Issuer and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person by
the 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 Trustee, negligence) or
willful misconduct with respect to such act or omissions. The Declaration also
provides that to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified 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 on
behalf of an Issuer and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by the
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
Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration further provides that, 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 Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
or 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 for the underlying cause of action as authorized by the
Declaration. The directors and officers of the Company and the Trustees are
covered by insurance policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended, which might be incurred by them in such capacities and against which
they cannot be indemnified by the Company or an Issuer.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. Exhibits
The following exhibits are filed as part of this Registration
Statement:
Exhibit No. Description
- ----------- -----------
1.1 Form of Underwriting Agreement (Common Stock, Preferred
Stock and Debt Securities)
1.2 Form of Underwriting Agreement (Preferred Securities)
4.1 Form of Senior Debt Securities Indenture
4.2 Form of Subordinated Debt Securities Indenture*
4.3 Form of Convertible Junior Subordinated Debentures
Indenture
4.4 Declaration of Trust of CalEnergy Capital Trust VI
4.5 Certificate of Trust of CalEnergy Capital Trust VI
4.6 Declaration of Trust of CalEnergy Capital Trust IV
II-2
<PAGE>
4.7 Certificate of Trust of CalEnergy Capital Trust IV***
4.8 Declaration of Trust of CalEnergy Capital Trust V
4.9 Certificate of Trust of CalEnergy Capital Trust V***
4.10 Form of Amended and Restated Declaration of Trust for each
of CalEnergy Capital Trust IV, CalEnergy Capital Trust V
and CalEnergy Capital Trust VI
4.11 Form of Convertible Preferred Securities***
4.12 Form of Common Securities Certificate
4.13 Form of Junior Subordinated Debentures
4.14 Form of Convertible Preferred Securities Guarantee
Agreement with respect to Convertible Preferred Securities
4.15 Form of Common Securities Guarantee
4.16 Form of CalEnergy Company, Inc. Common Stock Certificate**
5.1 Opinion of Willkie Farr & Gallagher
5.2 Opinion of Steven A. McArthur, General Counsel of
CalEnergy Company, Inc.
5.3 Opinion of Morris, Nichols, Arsht & Tunnell
12.1 Statement re: Computation of ratio of earnings to fixed
charges
15.1 Letter of Deloitte & Touche LLP, regarding unaudited
financial information.
15.2 Letter of Ernst & Young, chartered accountants, regarding
unaudited financial information
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young
23.3 Consent of Coopers & Lybrand LLP
23.4 Consent of Willkie Farr & Gallagher (included as part of
Exhibits 5.1 and 8.1)
23.5 Consent of Steven A. McArthur, General Counsel of
CalEnergy Company, Inc. (included as part of Exhibit 5.2)
23.6 Consent of Morris, Nichols, Arsht & Tunnell (included as
part of Exhibit 5.3)
24.1 Powers of Attorney for the Company (included on the
signature page of this Registration Statement)***
25.1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of IBJ Schroder Bank & Trust Company, as
Trustee under the Senior Debt Securities Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Subordinated Debt Securities Indenture***
25.3 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Junior Subordinated Debentures
Indenture***
25.4 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
with respect to the Amended and Restated Declarations of
Trust of CalEnergy Capital Trust IV, CalEnergy Capital
Trust V and CalEnergy Capital Trust VI
25.5 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Preferred Securities Guarantee of
the Company with respect to the Convertible Preferred
Securities of CalEnergy Capital Trust VI
25.6 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
with respect to the Convertible Preferred Securities
Guarantee of the Company with respect to the Preferred
Securities of CalEnergy Capital Trust IV***
<PAGE>
25.7 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Preferred Securities Guarantee of the
Company with respect to the Convertible Preferred
Securities of CalEnergy Capital Trust V***
- --------------------------
* To be filed by amendment.
** Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993.
*** Previously filed.
II-3
<PAGE>
B. Financial Statements and Schedules
All schedules for which provision is made in Regulation S-X of the
Securities and Exchange Commission either are not required under the related
instructions or the information required to be included therein has been
included in the financial statements and schedules of CalEnergy Company, Inc.
included in its Annual Report on Form 10-K for the year ended December 31,
1996.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act").
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission ("SEC") by such registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the provisions described in Item 15 or otherwise,
the Registrant has been advised that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer, or controlling person in connection with
the securities being
II-4
<PAGE>
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(d) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) The undersigned Registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the SEC under Section
305(b)(2) of the Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CalEnergy
Company, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Omaha, State of Nebraska, on September 18,
1997.
CALENERGY COMPANY, INC.
By: /s/ David L. Sokol
---------------------------------
David L. Sokol
Chairman of the Board and
Chief Executive Officer
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ David L. Sokol Chairman of the Board and September 18, 1997
- ------------------------------------- Chief Executive Officer
David L. Sokol (principal executive officer)
/s/ Craig M. Hammett Vice President and September 18, 1997
- ------------------------------------- Chief Financial Officer
Craig M. Hammett (principal financial officer)
/s/ Gregory E. Abel Chief Accounting Officer September 18, 1997
- -------------------------------------
Gregory E. Abel
* Director September 18, 1997
- -------------------------------------
Edgar D. Aronson
* Director September 18, 1997
- -------------------------------------
Judith E. Ayres
* Director September 18, 1997
- -------------------------------------
Richard K. Davidson
Director September 18, 1997
- ------------------------------------
David H. Dewhurst
* Director September 18, 1997
- -------------------------------------
Richard R. Jaros
Director September 18, 1997
- -------------------------------------
David R. Morris
* Director September 18, 1997
- -------------------------------------
Bernard W. Reznick
* Director September 18, 1997
- -------------------------------------
Walter Scott, Jr.
* Director September 18, 1997
- -------------------------------------
John R. Shiner
Director September 18, 1997
- -------------------------------------
Neville G. Trotter
* Director September 18, 1997
- -------------------------------------
David E. Wit
II-6
<PAGE>
By: */s/ Steven A. McArthur
- -------------------------------------
Steven A. McArthur
Attorney-in-fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended. CalEnergy Capital Trust IV certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Omaha, State of
Nebraska, on September 18, 1997.
CALENERGY CAPITAL TRUST IV
By: /s/ Steven A. McArthur
----------------------------------
Steven A. McArthur
Trustee
By: /s/ Craig M. Hammett
----------------------------------
Craig M. Hammett
Trustee
By: /s/ Gregory E. Abel
----------------------------------
Gregory E. Abel
Trustee
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, CalEnergy Capital Trust V certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Omaha, State of
Nebraska, on September 18, 1997.
CALENERGY CAPITAL TRUST V
By: /s/ Steven A. McArthur
-------------------------------
Steven A. McArthur
Trustee
By: /s/ Craig M. Hammett
-------------------------------
Craig M. Hammett
Trustee
By: /s/ Gregory E. Abel
-------------------------------
Gregory E. Abel
Trustee
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, CalEnergy Capital Trust VI certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Omaha, State of
Nebraska, on September 18, 1997.
CALENERGY CAPITAL TRUST VI
By: /s/ Steven A. McArthur
-------------------------------
Steven A. McArthur
Trustee
By: /s/ Craig M. Hammett
-------------------------------
Craig M. Hammett
Trustee
By: /s/ Douglas L. Anderson
-------------------------------
Douglas L. Anderson
Trustee
II-10
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1.1 Form of Underwriting Agreement (Common Stock, Preferred
Stock and Debt Securities)
1.2 Form of Underwriting Agreement (Preferred Securities)
4.1 Form of Senior Debt Securities Indenture
4.2 Form of Subordinated Debt Securities Indenture*
4.3 Form of Convertible Junior Subordinated Debentures
Indenture
4.4 Declaration of Trust of CalEnergy Capital Trust VI
4.5 Certificate of Trust of CalEnergy Capital Trust VI
4.6 Declaration of Trust of CalEnergy Capital Trust IV
4.7 Certificate of Trust of CalEnergy Capital Trust IV***
4.8 Declaration of Trust of CalEnergy Capital Trust V
4.9 Certificate of Trust of CalEnergy Capital Trust V***
4.10 Form of Amended and Restated Declaration of Trust for each
of CalEnergy Capital Trust IV, CalEnergy Capital Trust V
and CalEnergy Capital Trust VI
4.11 Form of Convertible Preferred Securities***
4.12 Form of Common Securities Certificate
4.13 Form of Junior Subordinated Debentures
4.14 Form of Convertible Preferred Securities Guarantee
Agreement with respect to Convertible Preferred Securities
4.15 Form of Common Securities Guarantee
<PAGE>
4.16 Form of CalEnergy Company, Inc. Common Stock Certificate**
5.1 Opinion of Willkie Farr & Gallagher
5.2 Opinion of Steven A. McArthur, General Counsel of
CalEnergy Company, Inc.
5.3 Opinion of Morris, Nichols, Arsht & Tunnell
12.1 Statement re: Computation of ratio of earnings to fixed
charges
15.1 Letter of Deloitte & Touche LLP, regarding unaudited
financial information.
15.2 Letter of Ernst & Young, chartered accountants, regarding
unaudited financial information
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young
23.3 Consent of Coopers & Lybrand LLP
23.4 Consent of Willkie Farr & Gallagher (included as part of
Exhibits 5.1 and 8.1)
23.5 Consent of Steven A. McArthur, General Counsel of
CalEnergy Company, Inc. (included as part of Exhibit 5.2)
23.6 Consent of Morris, Nichols, Arsht & Tunnell (included as
part of Exhibit 5.3)
24.1 Powers of Attorney for the Company (included on the
signature page of this Registration Statement)***
25.1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of IBJ Schroder Bank & Trust Company, as
Trustee under the Senior Debt Securities Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Subordinated Debt Securities Indenture***
25.3 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Junior Subordinated Debentures
Indenture***
25.4 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
with respect to the Amended and Restated Declarations of
Trust of CalEnergy Capital Trust IV, CalEnergy Capital
Trust V and CalEnergy Capital Trust VI
25.5 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Preferred Securities Guarantee of
the Company with respect to the Convertible Preferred
Securities of CalEnergy Capital Trust VI
25.6 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
with respect to the Convertible Preferred Securities
Guarantee of the Company with respect to the Preferred
Securities of CalEnergy Capital Trust IV***
25.7 Statement of Eligibility under The Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee,
under the Convertible Preferred Securities Guarantee of the
Company with respect to the Convertible Preferred
Securities of CalEnergy Capital Trust V***
- --------------------------
* To be filed by amendment.
** Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993.
*** Previously filed.
<PAGE>
CALENERGY COMPANY, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
UNDERWRITING AGREEMENT
1. Introductory. CalEnergy Company, Inc., a Delaware corporation
("Company"), proposes to issue and sell from time to certain of its unsecured
debt securities, preferred stock, no par value, and common stock, par value
$.0675 per share ("Common Stock"), registered under the registration statement
referred to in Section 2(a) ("Registered Securities"). The Registered
Securities constituting debt securities will be issued under one or more
indentures or supplemental indentures (each, an "Indenture"), between the
Company and a trustee selected by the Company, in one or more series, which
series may vary as to interest rates, maturities, redemption provisions,
selling prices and other terms. The Registered Securities constituting
preferred stock may be issued in one or more series, which series may vary as
to dividend rates, redemption provisions, selling prices and other terms.
Particular series or offerings of Registered Securities will be sold pursuant
to a Terms Agreement referred to in Section 3, for resale in accordance with
terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Firm Securities" and, together with any
Optional Securities (as defined in Section 3 below), the "Offered Securities".
The firm or firms which agree to purchase the Offered Securities are
hereinafter referred to as the "Underwriters" of such securities, and the
representative or representatives of the Underwriters, if any, specified in a
Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(e) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company, as of
the date of each Terms Agreement referred to in Section 3, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-32821), including a
prospectus, relating to the Registered Securities has been filed with
the Securities and Exchange Commission ("Commission") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to
as the "Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Offered Securities (if they are debt
securities or preferred stock) and the terms of the offering of the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Securities
Act of 1933, as amended ("Act"), including all material incorporated
by reference therein, is hereinafter referred to as the "Prospectus".
No document has been or will be prepared or distributed in reliance on
Rule 434 under the Act.
<PAGE>
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in
all material respects to the requirements of the Act, the Trust
Indenture Act of 1939 ("Trust Indenture Act") and the rules and
regulations of the Commission ("Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all material respects to the requirements
of the Act, the Trust Indenture Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that the foregoing does not apply to statements in or omissions
from any of such documents based upon written information furnished to
the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(c) The Company, each Subsidiary (as defined below) and each
Joint Venture (as defined below) have been duly organized and are
validly existing and, if applicable, in good standing under the laws
of their respective jurisdictions of organization as a corporation,
limited liability company or partnership, as the case may be, and have
the power and authority to own, lease and operate their property and
conduct their businesses as described in the Prospectus; the Company,
the Subsidiaries and the Joint Ventures are duly qualified to do
business and are in good standing as foreign corporations or foreign
partnerships, as the case may be, in each jurisdiction, domestic or
foreign, in which such registration or qualification or good standing
is required (whether by reason of the ownership or leasing of
property, the conduct of business or otherwise), except where the
failure to so register or qualify or be in good standing is not
reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole. For purposes of this
Agreement, (A) the term "Subsidiary" shall mean the entities listed in
Schedule B hereto, as such schedule may be amended in the Terms
Agreement ("Schedule B") and (B) the term "Joint Venture" shall mean
the entities listed in Schedule C hereto, as such schedule may be
amended in the Terms Agreement ("Schedule C"), it being understood
that such term means the general or limited partnership or other joint
venture entity and not the individual general or limited partners or
other joint venturers thereof. The Subsidiaries listed in Schedule B
are all the material direct and indirect "subsidiaries" of the
Company, as such term is defined in Rule 405 of the Rules and
Regulations, and are all of the "Significant Subsidiaries" of the
Company, as such term is defined in Rule 1-02 of Regulation S-X.
(d) All the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully-paid
and nonassessable; all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully-paid and nonassessable; and except as otherwise set forth in
Schedule B or disclosed in or contemplated by the Prospectus, all
outstanding shares of capital stock of each Subsidiary are owned
beneficially by the Company free and clear of any material claims,
liens, encumbrances and security interests. All of the partnership
interests in Joint Ventures beneficially owned by the Company (as
reflected in Schedule C) have been duly and validly authorized and
issued and, except as otherwise set forth in Schedule C or disclosed
in or contemplated by the Prospectus, are owned beneficially by the
Company free and clear of any material claims, liens, encumbrances and
security interests.
2
<PAGE>
(e) If the Offered Securities are debt securities: The Indenture
has been duly authorized and has been duly qualified under the Trust
Indenture Act; the Firm Securities and any Optional Securities have
been duly authorized; and when the Offered Securities are delivered
and paid for pursuant to the Terms Agreement on each Closing Date (as
defined below) or pursuant to Delayed Delivery Contracts (as
hereinafter defined) and authenticated by the Trustee pursuant to the
terms of the Indenture, the Indenture will have been duly executed and
delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture and
such Offered Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(f) If the Offered Securities are preferred stock: The Firm
Securities and any Optional Securities have been duly authorized and,
when the Offered Securities have been delivered and paid for in
accordance with the Terms Agreement on each Closing Date, such Offered
Securities will have been validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Offered Securities which have not been
waived.
(g) If the Offered Securities are Common Stock: The Firm
Securities and any Optional Securities and all other outstanding
shares of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities have been delivered and paid for in accordance with
the Terms Agreement on each Closing Date, such Offered Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the Offered Securities which have not been waived.
(h) If the Offered Securities are convertible: When the Offered
Securities are delivered and paid for pursuant to the Terms Agreement
on each Closing Date, such Offered Securities will be convertible into
Common Stock of the Company in accordance with their terms (if the
Offered Securities are preferred stock) or the Indenture (if the
Offered Securities are debt securities); the shares of Common Stock
initially issuable upon conversion of such Offered Securities have
been duly authorized and reserved for issuance upon such conversion
and, when issued upon such conversion, will be validly issued, fully
paid and nonassessable; the outstanding shares of Common Stock have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Common Stock which have not been waived.
(i) The use of the proceeds of the offering of the Offered
Securities as described in the Prospectus has been duly authorized by
all necessary action on the part of the Company.
(j) If the Offered Securities are Common Stock or are convertible
into Common Stock: Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company
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or any Underwriter for a brokerage commission, finder's fee or other
like payment in connection with the offering of the Offered
Securities.
(k) If the Offered Securities are Common Stock or are convertible
into Common Stock: Unless otherwise specified in the Terms Agreement,
there are no contracts, agreements or understandings which have not
been satisfied or waived between the Company and any person requiring
the Company to include securities of the Company owned or to be owned
by such person in the securities registered pursuant to the
Registration Statement.
(l) If the Offered Securities constitute Common Stock or are
convertible into Common Stock: The outstanding shares of Common Stock
are listed on The New York Stock Exchange (the "Stock Exchange") and
the Offered Securities (if they are Common Stock) or the Common Stock
into which the Offered Securities are convertible (if they are
convertible) has been approved for listing on the Stock Exchange,
subject to notice of issuance. If the Offered Securities are debt
securities or preferred stock, they have been approved for listing on
the stock exchange indicated in the Terms Agreement, subject to notice
of issuance.
(m) The execution, delivery and performance of the Indenture (if
the Offered Securities are debt securities), the Terms Agreement
(including the provisions of this Agreement) and any Delayed Delivery
Contracts, the issuance and sale of the Offered Securities and the use
of the proceeds of the offering of the Offered Securities as described
in the Prospectus and, if the Offered Securities are debt securities
or preferred stock, compliance with the terms and provisions thereof
will not (A) conflict with the corporate charter or by-laws or
partnership agreement of the Company, any Subsidiary or any Joint
Venture, (B) conflict with, result in the creation or imposition of
any lien, charge or other encumbrance (other than as contemplated by
the Indenture) upon any asset of the Company, any Subsidiary or any
Joint Venture pursuant to the terms of, or constitute a breach of, or
default under, any agreement, indenture or other instrument to which
the Company, any Subsidiary or any Joint Venture is a party or by
which the Company, any Subsidiary or any Joint Venture is bound or to
which any of the properties of the Company, any Subsidiary or any
Joint Venture is subject, or (C) result in a violation of any statute,
any rule, regulation, order, judgment or decree of any court or
governmental agency, body or authority having jurisdiction over the
Company, any Subsidiary or any Joint Venture or any of their
properties where any such conflicts, encumbrances, breaches, defaults
or violations under clauses (B) or (C), individually or in the
aggregate, is reasonably likely to (i) have a material adverse effect
on the financial condition, business or results of operations of the
Company, the Subsidiaries and Joint Ventures taken as a whole or (ii)
impair the validity or enforceability of the Indenture (if the Offered
Securities are debt securities), the Terms Agreement (including the
provisions of this Agreement), any Delayed Delivery Contracts or the
Offered Securities.
(n) Except (A) as to state or foreign securities laws or by the
regulations of the National Association of Securities Dealers, Inc.
(the "NASD") and (B) consents of third parties which have been
obtained, no consent, approval, authorization or order of, or filing
or registration by the Company, any Subsidiary or, to the best of the
Company's knowledge, any Joint Venture with, any court, governmental
agency or third party is required for the consummation of the
transactions contemplated by the Terms Agreement (including the
provisions of this Agreement) in connection with the issuance and sale
of the Offered Securities by the Company and the use of the proceeds
of the offering of the Offered Securities as described in the
Prospectus.
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(o) The Company has full power and authority to authorize, issue
and sell the Offered Securities as contemplated by the Terms Agreement
(including the provisions of this Agreement) and to execute, deliver
and perform the Terms Agreement (including the provisions of this
Agreement) and, if the Offered Securities are debt securities or
preferred stock, any Delayed Delivery Contracts.
(p) The Terms Agreement (including the provisions of this
Agreement) and, if the Offered Securities are debt securities or
preferred stock, any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(q) Except as disclosed in or contemplated by the Prospectus, the
Company, each Subsidiary and each Joint Venture holds, as applicable,
good and valid title to, or valid and enforceable leasehold or
contractual interests in, all real properties and all other properties
and assets owned or leased by or held under contract by each of them
that are material to the business of the Company and the Subsidiaries
and Joint Ventures taken as a whole, and free from liens, encumbrances
and defects that would materially interfere with the use made or to be
made thereof by them.
(r) Except as disclosed in or contemplated by the Prospectus, the
Company, the Subsidiaries and the Joint Ventures carry, or are covered
by, insurance in such amounts and covering such risks as is customary
for similarly situated companies in the Company's, such Subsidiaries'
and such Joint Ventures' industries, respectively. Each of the
foregoing insurance policies is valid and in full force and effect,
and no event has occurred and is continuing that permits, or after
notice or lapse of time or both would permit, modifications or
terminations of the foregoing that, individually or in the aggregate,
is reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the Company,
the Subsidiaries and Joint Ventures taken as a whole.
(s) Except as disclosed in or contemplated by the Prospectus, the
Company, each Subsidiary and each Joint Venture (i) has obtained each
license, permit, certificate, franchise or other governmental
authorization which is material to the ownership of their properties
or to the conduct of their businesses as described in or contemplated
by the Prospectus and (ii) is in compliance with all terms and
conditions of such license, permit, certificate, franchise or other
governmental authorization, except (A) in either case where the
failure to do so is not reasonably likely to have, individually or in
the aggregate, a material adverse effect on the financial condition,
business or results of operations of the Company, the Subsidiaries and
Joint Ventures taken as a whole, (B) permits, consents and approvals
that may be required for future drilling or operating activities which
are ordinarily deemed to be ministerial in nature and which are
anticipated to be obtained in the ordinary course and (C) permits,
consents and approvals for developmental or construction activities
which have not yet been obtained but which have been or will be
applied for in the course of development or construction and which are
anticipated to be obtained in the ordinary course.
(t) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings before any court,
governmental agency, body or authority, domestic or foreign, now
pending or, to the knowledge of the Company, threatened against, or,
to the knowledge of the Company, involving, the Company, any
Subsidiary or any Joint Venture that, if determined adversely to the
Company, any Subsidiary or any Joint Venture, would be
5
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reasonably likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, business or
results of operations of the Company, the Subsidiaries and Joint
Ventures taken as a whole, or on the ability of the Company to perform
its obligations under the Indenture (if the Offered Securities are
debt securities), the Terms Agreement (including the provisions of
this Agreement) or any Delayed Delivery Contracts, or which are
otherwise material in the context of the sale of the Offered
Securities.
(u) The Company, the Subsidiaries and the Joint Ventures are
currently conducting their respective businesses as described in the
Prospectus.
(v) There are no contracts or documents of a character required
to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required under the Act.
(w) There is no relationship, direct or indirect, that exists
between or among the Company on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company on the
other hand, of a character required to be described in the
Registration Statement or Prospectus which is not described as
required under the Act.
(x) There is no labor problem or disturbance with the persons
employed by the Company, any Subsidiary or any Joint Venture that
exists or, to the knowledge of the Company, that is threatened and
that might reasonably be expected to have a material adverse effect on
the financial condition, business or results of operations of the
Company, the Subsidiaries and Joint Ventures taken as a whole.
(y) Neither the Company nor any person who is a member of a group
which is under common control with the Company and the Subsidiaries
and Joint Ventures, who together with the Company, the Subsidiaries
and the Joint Ventures is treated as a single employer ("ERISA
Affiliate") within the meaning of Section 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended from time to time (the
"Code"), or Section 4001(b) of the Employee Retirement Income Security
Act of 1974, as amended from time to time ("ERISA"), has established,
sponsored, maintained or had any obligation to contribute to any
employee benefit plans within the meaning of Section 3(3) of ERISA
which are subject to Title IV of ERISA or Section 412 of the Code.
Except where it could not reasonably be expected to result in a
material adverse effect on the financial condition, business or
results of operations of the Company, the Subsidiaries and Joint
Ventures taken as a whole, (i) all employee benefit plans within the
meaning of Section 3(3) of ERISA established, sponsored or maintained
for or on behalf of the employees, officers or directors of the
Company, the Subsidiaries, Joint Ventures or any ERISA Affiliate
("Employee Benefit Plans") are in compliance with all applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder and each such Employee Benefit Plan that is
intended to be qualified under Code Section 401(a) has been determined
by the Internal Revenue Service to be so qualified and (ii) no
material liability or obligation has been incurred or is reasonably
expected to be incurred by the Company, the Subsidiaries or Joint
Ventures or any ERISA Affiliate with respect to any Employee Benefit
Plan.
(z) None of the Company, any Subsidiary or any Joint Venture (i)
is in violation of its respective declaration of trust, charter,
by-laws, partnership or operating agreements, (ii) is in default, and
no event exists and is continuing that, with notice or lapse of time
or both, would
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constitute such a default, in the due performance and observance of
any material term contained in any lease, license, indenture,
mortgage, deed of trust, note, bank loan or other evidence of
indebtedness or any other agreement, understanding or instrument to
which the Company, any Subsidiary or any Joint Venture is a party or
by which the Company, any Subsidiary or any Joint Venture or any
property of the Company, any Subsidiary or any Joint Venture may be
bound or affected, which default, individually or in the aggregate, is
reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or (iii) is in
violation of any law, ordinance, governmental rule or regulation or
court decree to which it may be subject, which violation, individually
or in the aggregate, is reasonably likely to have a material adverse
effect on the financial condition, business or results of operations
of the Company, the Subsidiaries and Joint Ventures taken as a whole
or would materially interfere with the execution, delivery and
performance of the Indenture (if the Offered Securities are debt
securities), the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts, the issuance and sale
of the Offered Securities and the use of the proceeds of the offering
of the Offered Securities as described in the Prospectus and, if the
Offered Securities are debt securities or preferred stock, compliance
with the terms and provisions thereof.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, hazardous wastes or hazardous substances, pollutants or
contaminants by the Company, any Subsidiary or any Joint Venture (or,
to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned
or leased by the Company, any Subsidiary or any Joint Venture in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action
under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except for any violation or remedial
action which does not have, or would not be reasonably likely to have,
individually or in the aggregate with all such violations and remedial
actions, a material adverse effect on the financial condition,
business or results of operations of the Company, the Subsidiaries and
Joint Ventures taken as a whole; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or into the environment surrounding such
property of any toxic wastes, solid wastes, hazardous wastes or
hazardous substances, pollutants or contaminants due to or caused by
the Company, any Subsidiary or any Joint Venture or with respect to
which the Company, any Subsidiary or any Joint Venture has knowledge,
except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which does not have, or would not be
reasonably likely to have, individually or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole; and the terms
"hazardous wastes", "toxic wastes" and "hazardous substances" shall
have the meanings specified in any applicable local, state, federal
and foreign laws or regulations with respect to environmental
protection.
(ab) None of the Company or any Subsidiary or any Joint Venture
is an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be
registered under Section 8 of the United States Investment Company Act
of 1940, as amended (the "1940 Act"), nor is it a closed-end
investment company required to be registered, but not registered,
thereunder; and each of the Company, each Subsidiary and each Joint
Venture is not and, after giving effect to the offering and sale of
the Offered Securities and the application
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<PAGE>
of the proceeds thereof as described in the Prospectus, will not be an
"investment company", or, to the best knowledge of the Company after
due inquiry, a company controlled by an "investment company" within
the meaning of the 1940 Act.
(ac) The Company, each Subsidiary and each Joint Venture has
filed all federal, state and local income and franchise tax returns
required to be filed through the date hereof, or has filed extensions
in accordance with applicable law, and has paid all taxes required to
be paid through the date hereof thereon, except for such failures to
file or pay that would not, individually or in the aggregate, be
reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, and no tax
deficiency has been determined adversely to the Company, any
Subsidiary or any Joint Venture that has had (nor does the Company
have any knowledge of any tax deficiency which, if determined
adversely to the Company, any Subsidiary or any Joint Venture would be
reasonably likely to have) a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole.
(ad) The financial statements and the related notes and schedules
included or incorporated by reference in the Registration Statement
and Prospectus fairly present the financial position, the results of
operations and the cash flows of the Company and its consolidated
subsidiaries at the respective dates and for the respective periods to
which they apply; and such financial statements and the related notes
and schedules have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified. The historical information
under the caption "Capitalization" in the Prospectus is accurately
described as of the date presented therein.
(ae) Since the date of the latest financial statements included
or incorporated by reference in the Prospectus (i) there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the financial condition,
business or results of operations of the Company, the Subsidiaries and
Joint Ventures taken as a whole, and (ii) except as disclosed in or
contemplated by the Prospectus, there have not been any transactions
entered into by the Company, the Subsidiaries or any Joint Venture,
other than those in the ordinary course of business, which are
material to the Company, the Subsidiaries and Joint Ventures taken as
a whole; and, except as disclosed in the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(af) If pro forma financial information is included in the
Registration Statement and the Prospectus: The pro forma financial
information included in the Registration Statement and the Prospectus
presents fairly the information shown therein, has been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial information, has been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(ag) The Company has complied with all applicable provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
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(ah) The accountants who have certified certain financial
statements of the Company or of businesses acquired by the Company, as
applicable, and whose reports appear in the Registration Statement and
the Prospectus or are incorporated by reference therein, are and were
independent public accountants as required by the Act and the Rules
and Regulations during the periods covered by the financial statements
on which they reported which are contained or incorporated by
reference in the Registration Statement or the Prospectus.
(ai) (i) Each of the operational electric generation facilities
("Plants") owned in whole or in part, directly or indirectly by (A)
the Company, (B) the Subsidiaries or (C) the Joint Ventures which is
located in the United States is a "qualifying cogeneration facility"
or a "qualifying small power production facility" (either or both of
which are hereinafter referred to as a "QF"), as such terms are
defined under the Federal Power Act, as amended ("FPA"), and the
regulations thereunder, and has continuously been in compliance with
the requirements for being a QF since it commenced sales of
electricity; (ii) with respect to each Plant under development and
located in the United States, either (x) to the extent that the
Company, the Subsidiaries or the Joint Ventures plan to act as the
owner and/or operator of any one of the Plants under development by
the Company, the Subsidiaries or the Joint Ventures and located in the
United States (as currently configured or as currently anticipated to
be configured), that owner and/or operator satisfies or is currently
expected to satisfy current regulatory requirements for being an
"exempt wholesale generator" ("EWG"), as such term is defined under
the FPA, the Public Utility Holding Company Act of 1935, as amended
("PUHCA") and the regulations thereunder or (y) each of the Plants
under development by the Company, the Subsidiaries or the Joint
Ventures and located in the United States (as currently configured or
as currently anticipated to be configured) will be a QF and will be in
continuous compliance with the requirements for being a QF; (iii) the
owner or operator of each of the Plants under development by the
Company, the Subsidiaries or Joint Ventures and located outside the
United States (as currently configured or as currently anticipated to
be configured) satisfies or is currently expected to satisfy current
regulatory requirements for being either (A) an EWG or (B) a "foreign
utility company," as such term is defined under PUHCA and the
regulations thereunder; (iv) none of the entities identified in clause
(A) or (B) of subparagraph (i) above owns or operates or will own or
operate any electric distribution facilities or any electric
transmission facilities in or outside of the United States other than
electric transmission facilities that have been or will be approved by
the Federal Energy Regulatory Commission as being part of a QF, or the
owner and/or operator of which will have qualified as EWG's or as
"foreign utility companies" as such terms are defined under the FPA,
PUHCA and the regulations thereunder; and (v) none of the entities
identified in clause (A), (B) or (C) of subparagraph (i) above is, or
is subject to regulation as, a "public utility holding company" or a
"subsidiary company" of a "public utility holding company," as those
terms are defined under PUHCA, or is subject to regulation under the
FPA, other than as contemplated by 18 C.F.R Section 292.601(c), or,
except as described in or contemplated by the Prospectus, subject to
regulation by any state law or foreign governmental law with respect
to rates or the financial or organizational regulation of electric
utilities.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Firm Securities will be evidenced by an agreement
or exchange of other written communications ("Terms Agreement") at the time the
Company determines to sell the Firm Securities. The Terms Agreement will
incorporate by reference the provisions of this Agreement, except as otherwise
provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the aggregate principal amount
or number of Firm Securities to be purchased by each Underwriter, the
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purchase price to be paid by the Underwriters and (if the Firm Securities are
debt securities or preferred stock) the terms of the Firm Securities not
already specified (in the Indenture, in the case of Firm Securities that are
debt securities), including, but not limited to, interest rate (if debt
securities), dividend rate (if preferred stock), maturity (if debt securities),
any redemption provisions and any sinking fund requirements and whether any of
the Firm Securities may be sold to institutional investors pursuant to Delayed
Delivery Contracts (as defined below). The Terms Agreement will also specify
the time and date of delivery and payment (such time and date, or such other
time not later than seven full business days thereafter as the Representatives)
and the Company agree as the time for payment and delivery, being herein and in
the Terms Agreement referred to as the "First Closing Date"), the place of
delivery and payment and any details of the terms of offering that should be
reflected in the prospectus supplement relating to the offering of the Offered
Securities. For purposes of Rule 15c6-1 under the Securities Exchange Act of
1934, the First Closing Date (if later than the otherwise applicable settlement
date) shall be the date for payment of funds and delivery of securities for all
the Offered Securities sold pursuant to the offering, other than Contract
Securities for which payment of funds and delivery of securities shall be as
hereinafter provided. The obligations of the Underwriters to purchase the Firm
Securities will be several and not joint. It is understood that the
Underwriters propose to offer the Offered Securities for sale as set forth in
the Prospectus.
If the Firm Securities are debt securities and the Terms Agreement
specifies "Book-Entry Only" settlement or otherwise states that the provisions
of this paragraph shall apply, the Company will deliver against payment of the
purchase price the Firm Securities being purchased on such Closing Date in the
form of one or more permanent global securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Firm Securities shall be made by the Underwriters
in Federal (same day) funds by official check or checks or wire transfer to an
account previously designated to the Representatives by the Company at a bank
acceptable to the Representatives, in each case drawn to the order of the
Company at the place of payment specified in the Terms Agreement on such
Closing Date, against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Firm Securities.
The Company may specify in the Terms Agreement applicable to any
Offered Securities that the Company thereby grants to the Underwriters the
right to purchase, at their election, up to the aggregate principal amount of
debt securities, number of shares of preferred stock or common stock ("Optional
Securities") set forth in such Terms Agreement, on the terms set forth in the
first paragraph of this Section 3. Any such election may be exercised only by
written notice from the Representatives to the Company, given within the period
specified in the Terms Agreement, setting forth the aggregate principal amount
or number of Optional Securities purchased and the date on which such Optional
Securities are to be delivered as determined by the Representatives.
The Company agrees to sell to the Underwriters the aggregate principal
amount or number of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of each
Underwriter in the same proportion as the aggregate principal amount or number
of Firm Securities set forth opposite such Underwriter's name in such Terms
Agreement bears to the aggregate principal amount or number of Firm Securities
(subject to adjustment by the Representatives to eliminate fractions) and may
be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No
Optional Securities shall be sold or delivered unless
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the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by the
Representatives to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Representatives but shall not be later than five full business days after
written notice of election to purchase Optional Securities is given. The
Company will deliver the Optional Securities being purchased on each Optional
Closing Date to the Representatives for the accounts of the several
Underwriters against payment of the purchase price therefor in the same manner
as the Firm Securities.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Offered Securities pursuant to delayed delivery
contracts substantially in the form of Annex I attached hereto ("Delayed
Delivery Contracts") with such changes therein as the Company may authorize or
approve. Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. On the
Closing Date the Company will pay, as compensation, to the Representatives for
the accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the principal amount or number of shares of Offered Securities to be
sold pursuant to Delayed Delivery Contracts ("Contract Securities"). The
Underwriters will not have any responsibility in respect of the validity or the
performance of Delayed Delivery Contracts. If the Company executes and delivers
Delayed Delivery Contracts, the Contract Securities will be deducted from the
Offered Securities to be purchased by the several Underwriters and the
aggregate principal amount or number of shares of Offered Securities to be
purchased by each Underwriter will be reduced pro rata in proportion to the
principal amount or number of shares of Offered Securities set forth opposite
each Underwriter's name in such Terms Agreement, except to the extent that the
Representatives determine that such reduction shall be otherwise than pro rata
and so advise the Company. The Company will advise the Representatives not
later than the business day prior to the Closing Date of the principal amount
or number of shares of Contract Securities.
4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters, one
signed copy of the Registration Statement relating to the Registered
Securities, including all exhibits, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Offered
Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Representatives, subparagraph (5)) not
later than the second business day following the execution and
delivery of the Terms Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable
opportunity to comment on any such proposed amendment or supplement;
and the Company will also advise the Representatives promptly of the
filing of any such amendment or supplement and of the institution by
the Commission of any stop order proceedings in respect of
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<PAGE>
the Registration Statement or of any part thereof and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify the Representatives of such event and
will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. Neither
the Representatives' consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 5.
(d) As soon as practicable, but not later than 16 months, after
the date of each Terms Agreement, the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the Registration Statement relating to the
Registered Securities, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the
Representatives reasonably request. The Company will pay the expenses
of printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Company
will not be required to qualify as a foreign corporation, to file a
general consent to service of process in any such jurisdiction or to
take any other action that would subject the Company to service of
process in any suits other than those arising out of the offering of
the Offered Securities or to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject.
(g) During the period of three years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as the Representatives may reasonably request.
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<PAGE>
(h) The Company will pay all expenses incident to the performance
of its obligations under the Terms Agreement (including the provisions
of this Agreement), for any filing fees or other expenses (including
reasonable fees and disbursements of counsel) in connection with
qualification of the Registered Securities for sale and any
determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Offered Securities
(if they are debt securities or preferred stock), for any applicable
filing fee incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, the review by the
National Association of Securities Dealers, Inc. of the Registered
Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of
Registered Securities and for expenses incurred in distributing the
Prospectus, any preliminary prospectuses, any preliminary prospectus
supplements or any other amendments or supplements to the Prospectus
to the Underwriters.
(i) During the period of two years after the date of any Terms
Agreement, the Company will not be or become an open-end investment
company, unit investment trust or face-amount certificate company that
is or is required to be registered under Section 8 of the 1940 Act and
is not, and will not be or become, a closed-end investment company
required to be registered, but not registered, under the 1940 Act.
(j) If the Offered Securities are debt securities or preferred
stock, the Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to United
States dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date of
issue (if the Offered Securities are debt securities) or any series of
preferred stock issued or guaranteed by the Company (if the Offered
Securities are preferred stock), or publicly disclose the intention to
make any such offer, sale, pledge, disposition or filing, without the
prior written consent of the Representatives for a period beginning at
the time of execution of the Terms Agreement and ending the number of
days after the Closing Date specified under "Blackout" in the Terms
Agreement.
(k) If the Offered Securities are Common Stock or are convertible
into Common Stock, the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into
or exchangeable or exercisable for any shares of its Common Stock, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Representatives for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement, except issuances of
Common Stock pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in
each case outstanding on the date of the Terms Agreement, grants of
employee stock options pursuant to the terms of a plan in effect on
the date of the Terms Agreement or issuances of Common Stock pursuant
to the exercise of such options.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be
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<PAGE>
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) All corporate proceedings and other legal matters incident to
the authorization, form and validity of the Indenture (if the Offered
Securities are debt securities), the Terms Agreement (including the
provisions of this Agreement), any Delayed Delivery Contracts, the
Registration Statement, the Prospectus and the Offered Securities, and
all other legal matters relating to such agreements and the
transactions contemplated thereby shall be satisfactory in all
material respects to counsel for the Underwriters, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Deloitte & Touche LLP or any successor firm (and
any other firm of independent accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and/or financial data are included or incorporated by
reference in the Registration Statement or Prospectus) in agreed upon
form.
(c) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(d) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus (i) except as
disclosed in the Prospectus, there shall have been no material adverse
change, or a development which is reasonably likely to lead to a
material adverse change, in the financial condition, business or
results of operations of the Company, the Subsidiaries and Joint
Ventures taken as a whole and (ii) except as disclosed in the
Prospectus, there shall not have been any transactions entered into by
the Company, any Subsidiary or any Joint Venture, other than those in
the ordinary course of business, which are material and adverse to the
Company, the Subsidiaries and Joint Ventures taken as a whole, and
which, in the judgment of a majority in interest of the Underwriters
including any Representatives, make it impracticable or inadvisable to
proceed with the offering or the delivery of the Offered Securities on
the terms and in the manner contemplated in the Prospectus.
(e) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in or affecting particularly the
business or properties of the Company, the Subsidiaries and Joint
Ventures taken as a whole, which is material and adverse, and which,
in the judgment of a majority in interest of the Underwriters
including any Representatives, makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) subject to the execution of
the Terms Agreement, except as set forth in the Terms Agreement, any
downgrading in the rating of any debt securities or preferred stock of
the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act),
or any public announcement that any such organization has under
surveillance
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<PAGE>
or review its rating of any debt securities or preferred stock of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including any Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(f) The Representatives shall have received customary opinions,
dated such Closing Date, of Willkie Farr & Gallagher, counsel for the
Company, and Steven A. McArthur, Esq., Senior Vice President and
General Counsel for the Company, in agreed upon form.
(g) The Representatives shall have received from Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel for the Underwriters, such
opinion or opinions, dated such Closing Date, with respect to the
incorporation of the Company, the validity of the Offered Securities
delivered on such Closing Date, the Registration Statement, the
Prospectus and other related matters as the Representatives may
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(h) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that (i) the representations and warranties
of the Company in this Agreement are true and correct in all material
respects, (ii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date, (iii) no stop order
suspending the effectiveness of the Registration Statement or of any
part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and (iv)
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the financial condition, business or results of operations of the
Company, the Subsidiaries and Joint Ventures taken as a whole except
as set forth in or contemplated by the Prospectus or as described in
such certificate.
(i) The Representatives shall have received a letter, dated such
Closing Date, of Deloitte & Touche LLP and such other independent
accountants for subsidiaries and acquired businesses which meet the
requirements of subsection (b) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to such Closing Date for the purposes of this
subsection.
(j) The Company shall have furnished the Representatives with
such conformed copies of such opinions, certificates, letters and
documents as the Representatives reasonably requested.
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<PAGE>
(k) The Company and Kiewit Energy Company, Inc. ("Kiewit") shall
have entered into an agreement, in form and substance satisfactory to
the Representatives, whereby Kiewit shall have waived any and all
preemptive rights to which it would otherwise be entitled as a result
of the execution, delivery and performance of the Indenture (if the
Offered Securities are debt securities), the Terms Agreement
(including the provisions of this Agreement) and any Delayed Delivery
Contracts, the consummation of the transactions herein and therein
contemplated and the use of the proceeds of the offering of the
Offered Securities as described in the Prospectus, the issuance and
sale of the Offered Securities and, if the Offered Securities are debt
securities or preferred stock, compliance with the terms and
provisions thereof.
The Representatives may in their sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus, in light of the
circumstances under which they were made) not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in the Terms Agreement; and provided,
further, that, with respect to any untrue statement contained in or omission
from any preliminary prospectus, this indemnity agreement shall not inure to
the benefit of any Underwriter on account of any loss, claim, damage, liability
or action arising from the sale of any Offered Securities to any person in the
initial resale by that Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or supplemented, to that
person within the time required by the Act, and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary prospectus was corrected in the Prospectus
and the Prospectus was made available to that Underwriter prior to the sale of
the Offered Securities. For purposes of the last proviso to the immediately
preceding sentence, the term "Prospectus" shall not be deemed to include the
documents incorporated by reference therein, and no Underwriter shall be
obligated to send or give any supplement or amendment to any document
incorporated by reference in any preliminary prospectus or Prospectus to any
person other than a person to whom such Underwriter had delivered such
incorporated document or documents in response to a written request therefor.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue
16
<PAGE>
statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or
any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (with
respect to the Prospectus, in light of the circumstances under which
they were made) not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information
described as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above, except to the extent it has been
materially prejudiced by such failure; and provided, further, that
such omission will not relieve it from any liability which it may
otherwise have to an indemnified party. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, that the indemnified party shall have the right to employ
counsel to represent the indemnified party and its controlling persons
who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 6 if the employment of such
counsel shall have been authorized in writing by the indemnifying
party in connection with the defense of such action or, if in the
written opinion of counsel to either the indemnifying party or the
indemnified party, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, and in that event the fees and expenses of one firm of
separate counsel (in addition to the fees and expenses of local
counsel) shall be paid by the indemnifying party. No indemnifying
party shall, without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such
action. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying
17
<PAGE>
party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from
the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Offered Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions,
to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities on either the First Closing
Date or any Optional Closing Date under the Terms Agreement and the aggregate
principal amount (if debt securities) or number of shares (if preferred stock
or Common Stock) of Offered Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount (if debt securities) or number of shares (if preferred stock
or Common Stock) of Offered Securities, the Representatives may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
18
<PAGE>
under the Terms Agreement (including the provisions of this Agreement), to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate principal amount (if debt securities) or number of
shares (if preferred stock or Common Stock) of Offered Securities with respect
to which such default or defaults occur exceeds 10% of the total principal
amount (if debt securities) or number of shares (if preferred stock or Common
Stock) of Offered Securities that the Underwriters are obligated to purchase on
such Closing Date and arrangements satisfactory to the Representatives and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, the Terms Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 8 (provided that if such default occurs with
respect to Optional Securities after the First Closing Date, such Terms
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default. If the Offered Securities are debt securities or
preferred stock, the respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the principal amounts (if debt
securities) or numbers of shares (if preferred stock) of the Offered Securities
set forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the Company or its officers and of the several Underwriters set forth in or
made pursuant to the Terms Agreement (including the provisions of this
Agreement) will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the Terms Agreement is terminated
pursuant to Section 7 or if for any reason the purchase of the Offered
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
4 and the respective obligations of the Company and the Underwriters pursuant
to Section 6 shall remain in effect, and if any Offered Securities have been
purchased hereunder, the representations in Section 2 and all obligations under
Section 4 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of the Terms Agreement pursuant to Section 7
or the occurrence of any event specified in clause (iii), (iv) or (v) of
Section 5(e), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities; provided that
the Company shall not be obligated under this section 8 to reimburse the
Representatives for any expenses (including any reasonably fees and
disbursements of counsel ) in excess of the amount set forth in the Terms
Agreement.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their address furnished to the Company in writing for the
purpose of communications hereunder or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 302 South 36th Street, Suite
400, Omaha, Nebraska 68131, Attention: General Counsel (Fax: 402-231-1658).
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and
such Underwriters as are identified in the Terms
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<PAGE>
Agreement and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for
the several Underwriters in connection with the financing described in the
Terms Agreement, and any action under such Terms Agreement (including the
provisions of this Agreement) taken by the Representatives will be binding upon
all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
thereby.
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ANNEX I
(Three copies of this Delayed Delivery Contract should be signed
and returned to the address shown below so as to arrive not
later than 9:00 A.M.,
New York time, on ........................ ............, 19...1)
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
CALENERGY COMPANY, INC.
c/o [INSERT NAME AND ADDRESS OF REPRESENTATIVES]
Gentlemen:
The undersigned hereby agrees to purchase from CalEnergy Company,
Inc., a Delaware corporation ("Company"), and the Company agrees to sell to the
undersigned, [If one delayed closing, insert--as of the date hereof, for
delivery on , 19 ("Delivery Date"),]
[$]..............[shares]
- --principal amount--of the Company's [Insert title of securities]
("Securities"), offered by the Company's Prospectus dated , 19 and a
Prospectus Supplement dated , 19 relating thereto, receipt of copies
of which is hereby acknowledged, at-- % of the principal amount thereof plus
accrued interest, if any,--$ per share plus accrued dividends, if any,--and
on the further terms and conditions set forth in this Delayed Delivery
Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in
the--principal--amounts set forth below:
- --------------
(1) Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
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PRINCIPAL AMOUNT
----------------
NUMBER
DELIVERY DATE OF SHARES
------------- ---------
............................... ..............
............................... ..............
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of at .M. on--the--such--Delivery Date upon delivery to the
undersigned of the Securities to be purchased by the undersigned--for delivery
on such Delivery Date--in definitive [If debt issue, insert--fully registered]
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total--principal
amount--number of shares--of the Securities less the--principal amount--number
of shares--thereof covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by copies of the opinions of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
22
<PAGE>
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
...................................
(Name of Purchaser)
By ...............................
...............................
(Title of Signatory)
...............................
...............................
(Address of Purchaser)
Accepted, as of the above date.
CALENERGY COMPANY, INC.
By
...............................
[Insert Title]
23
<PAGE>
SCHEDULE B
----------
Subsidiaries
------------
Coso Funding Corp.+
Incorporated in Delaware
Coso Hotsprings Intermountain Power, Inc. (CHIP)+
Incorporated in Delaware
China Lake Operating Co. (CLOC)+
Incorporated in Delaware
Coso Technology Corporation (CTC)+
Incorporated in Delaware
China Lake Geothermal Management Company (CLGMC)+
Incorporated in Delaware
China Lake Plant Services, Inc. +
Incorporated in California
Coso Hotsprings Overland Power, Inc.+
Incorporated in Delaware
CE Geothermal, Inc.
Incorporated in Delaware
Western States Geothermal Company
Incorporated in Delaware
Intermountain Geothermal Company
Incorporated in Delaware
CalEnergy Development Corporation
Incorporated in Delaware
California Energy Yuma Corporation
Incorporated in Utah
California Energy General Corporation
Incorporated in Delaware
24
<PAGE>
Rose Valley Properties, Inc.
Incorporated in Delaware
CE Holt Company, Inc.
Incorporated in Delaware
CBE Engineering Co.
Incorporated in California
CE Exploration Company
Incorporated in Delaware
CE Newberry, Inc.
Incorporated in Delaware
CE International Investments Inc.
Incorporated in Delaware
CE Philippines Ltd.
Incorporated in Bermuda
CE Mahanagdong Ltd.
Incorporated in Bermuda
Ormoc Cebu Ltd.
Incorporated in Bermuda
CE Cebu Geothermal Power Company, Inc.+
Incorporated in the Philippines
CE Indonesia Ltd.+
Incorporated in Bermuda
CE Casecnan Ltd.
Incorporated in Bermuda
CE Singapore Ltd.
Incorporated in Bermuda
CalEnergy International Ltd.
Incorporated in Bermuda
CE Bali, Ltd.
Incorporated in Bermuda
CE Casecnan Water and Energy Company, Inc.+
Incorporated in the Philippines
Capital Stock: Owned 35% by CE Casecnan Ltd.,
25
<PAGE>
35% by Kiewit Energy International (Bermuda) Ltd.,
15% by La Prairie Group Contractors (International) Ltd and
15% by San Lorenzo Ruiz Builders & Developers Group, Inc.
Magma Power Company+
Incorporated in Nevada
CalEnergy Operating Company+
Incorporated in Delaware
Salton Sea Power Company+
Incorporated in Nevada
Vulcan Power Company+
Incorporated in Nevada
Imperial Magma+
Incorporated in Nevada
Magma Land Company I+
Incorporated in Nevada
Desert Valley Company+
Incorporated in California
Fish Lake Power Company+
Incorporated in Delaware
Magma Netherlands B.V.+
Formed in the Netherlands
Tongonan Power Investment, Inc.+
Incorporated in the Philippines
Salton Sea Funding Corporation (SSFC)+
Incorporated in Delaware
Salton Sea Royalty Company+
Incorporated in Delaware
CE Asia Ltd.+
Incorporated In Bermuda
American Pacific Finance Company
Incorporated in Delaware
The Ben Holt International Co., Inc.
Incorporated in Delaware
26
<PAGE>
CalEnergy International Services, Inc.
Incorporated in Delaware
CalEnergy Imperial Valley Company, Inc.
Incorporated in Delaware
California Energy Retail Company, Inc.
Incorporated in Delaware
CE Humboldt, Inc.
Incorporated in Delaware
CE Ijen Ltd.
Incorporated in Bermuda
Magma Generating Company I
Incorporated in Nevada
Magma Generating Company II
Incorporated in Nevada
Peak Power Corporation
Incorporated in California
CE Luzon Geothermal Power Company, Inc.+
Incorporated in the Philippines
Capital Stock: Owned 50% by CE Mahanagdong Ltd.;
50% by Kiewit Energy International (Bermuda) Ltd.;
an industrial company has the right to acquire 10%
of the equity - 5% from CE Mahanagdong Ltd. and 5%
from Kiewit Energy International (Bermuda) Ltd.
Himpurna California Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 47% by CE Indonesia Ltd.;
47% by Kiewit Energy International (Bermuda) Ltd.,
and 6% by P.T. Himpurna Enersindo Abadi; ("Himpurna").
Himpurna has assigned the right to certain preferred
dividends representing a 4% interest in Himpurna
California Energy Ltd., under the Joint Operating Contract,
Pertamina has certain rights to acquire up to a 25% interest
in the Joint Operating Contract, but not under the Energy
Sales Contract
27
<PAGE>
Patuha Power, Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 50% by CE Singapore Ltd.,
and 50% by Kiewit Energy International (Bermuda)
Ltd.; under the Joint Operating Contract,
Pertamina has certain rights to acquire up
to a 25% interest in the Joint Operating Contract,
but not under the Energy Sales Agreement
Bali Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 50% by CE Bali Ltd. and
50% by Kiewit Energy International (Bermuda) Ltd.
P.T. Pandanwangi Sekartji has the right to acquire
up to 40% of the equity in Bali Energy Ltd.
Norming Investments BV+
Incorporated in the Netherlands
Capital Stock: Owned 50% by CE Asia Ltd. and
50% by Kiewit Energy International (Bermuda) Ltd.
BN Geothermal Inc.+
Incorporated in Delaware
Canejo Energy Company+
Incorporated in California
Niguel Energy Company+
Incorporated in California
San Felipe Energy Company+
Incorporated in California
CE/FS Holding Company, Inc.
Incorporated in Delaware
Falcon Seaboard Power Corporation
Incorporated in Texas
Falcon Seaboard Resources, Inc.
Incorporated in Texas
Falcon Seaboard Energy Corporation
Incorporated in Texas
Falcon Seaboard Gas Company
Incorporated in Texas
28
<PAGE>
Falcon Seaboard Oil Company
Incorporated in Texas
Falcon Seaboard Pipeline Corporation
Incorporated in Texas
Big Spring Pipeline Company
Incorporated in Texas
Falcon Power Operating Company
Incorporated in Texas
Power Resources, Inc.+
Incorporated in Texas
North Country Gas Pipeline Corporation+
Incorporated in New York Owned
by Saranac Power Partners, L.P.
Saranac Energy Company, Inc. (SECI)+
Incorporated in Delaware
SECI Holdings, Inc.+
Incorporated in Delaware
Northern Consolidated Power, Inc. (NCPI)+
Incorporated in Delaware
NorCon Holdings, Inc.
Incorporated in Delaware
CE Electric, Inc.
Incorporated in Delaware
CE Power, Inc.
Incorporated in Delaware
CE Electric UK plc
Incorporated in England
Capital Stock: Owned 70% indirectly by CalEnergy Company, Inc. and
30% indirectly by Peter Kiewit Sons', Inc.
American Pacific Finance Company II
Incorporated in Delaware
Capital Stock: Owned 50% by CalEnergy Company, Inc. and
50% by Kiewit Energy Company
PT Kiewit Holt Indonesia
29
<PAGE>
Incorporated in Indonesia
Owned by Kiewit/Holt Indonesia
Slupo I B.V.+
Incorporated in Netherlands
Owned 50% by CE Asia Ltd. and 50% by Kiewit
Energy International (Bermuda) Limited
Gilbert/CBE Indonesia L.L.C.
Organized in Nebraska
Owned 60% Gilbert Industrial Corporation and 40% CBE Engineering Co.
Northern Electric plc+
Incorporated in England and Wales
Northern Electric Generation (NPL) Ltd.
Incorporated in England and Wales
Northern Electric Supply Ltd.+
Incorporated in England and Wales
Northern Electric Share Scheme Trustee Ltd.+
Incorporated in England and Wales
Northern Transport Finance Ltd.+
Incorporated in England and Wales
Northern Electric Retail Ltd.+
Incorporated in England and Wales
Northern Electric Properties Ltd.+
Incorporated in England and Wales
Northern Electric Distribution Ltd..
Incorporated in England and Wales
Gas UK Ltd.+
Incorporated in England and Wales
Combined Power Systems (Northern) Ltd.+
Incorporated in England and Wales
Northern Electric (Overseas Holdings) Ltd.+
Incorporated in England and Wales
Northern Electric Generation (CPS) Ltd.+
Incorporated in England and Wales
30
<PAGE>
Kings Road Developments Ltd.+
Incorporated in England and Wales
Ryhope Road Developments Ltd.+
Incorporated in England and Wales
Stamfordham Road Developments Ltd.+
Incorporated in England and Wales
Northern Electric Generation (TPL) Ltd.+
Incorporated in England and Wales
Northern Electric Generation Ltd.+
Incorporated in England and Wales
Northern Electric Insurance Services Ltd.+
Incorporated in England and Wales
Northern Metering Services Ltd.+
Incorporated in Isle of Man
Sovereign Exploration Ltd.+
Incorporated in England and Wales
Northern Electric Generation (Peaking) Ltd.+
Incorporated in England and Wales
Northern Electric Training Ltd.+
Incorporated in England and Wales
Northern Electric Transport Ltd.+
Incorporated in England and Wales
Northern information Systems Ltd.+
Incorporated in England and Wales
Northern Utility Services Ltd.+
Incorporated in England and Wales
Viking Power Ltd.+
Incorporated in England and Wales
Northern electric Finance plc.+
Incorporated in England and Wales
Northgas Ltd.+
Incorporated in England and Wales
31
<PAGE>
Northern Tracing & Collection Services Ltd.+
Incorporated in England and Wales
Northern Electric Telecom Ltd.+
Incorporated in England and Wales
CE Electric UK Holdings
Incorporated in England
Capital Stock: Owned 70% indirectly by CalEnergy Company, Inc. and
30% indirectly by Peter Kiewit Sons', Inc.
32
<PAGE>
SCHEDULE C
----------
Joint Ventures
--------------
Coso Energy Developers (CED)+
Formed in California
General Partnership: 48% CHIP; 52% Caithness Coso
Holdings, L.P.
Coso Finance Partners+
Formed in California
General Partnership: 46.3% owned by CLOC; 53.7%
owned by ESCA I, L.P.
Coso Power Developers (CPD)+
Formed in California
General Partnership: 50% owned by CTC; 50% by
Caithness Navy II
Coso Transmission Line Partners+
Formed in California
General Partnership: Owned 50% by CED; 50% by CPD
Vulcan/BN Geothermal Power Company+
Formed in Nevada
Partnership Interests: Vulcan Power Company 50%
General Partner; BN Geothermal, Inc. 50% General
Partner
Del Ranch, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
Conejo Energy Company 10% Limited Partner and 40% General Partner
Elmore, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
Niguel Energy Company 10% Limited Partner
and 40% General Partner
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement, or otherwise
encumbered and subject to foreclosure or other exercise of remedies.
i
<PAGE>
Leathers, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner; San
Felipe Energy Company 10% Limited Partner and 40% General Partner
Salton Sea Brine Processing L.P.+
Limited Partnership Formed in California
Salton Sea Power Generation L.P.+
Limited Partnership Formed in California
Visayas Geothermal Power Company+
Partnership Formed in the Philippines
Yuma Cogeneration Associates (YCA)+
Formed in Utah
Alto Peak Power Company
Formed in the Philippines
China Lake Joint Venture
Formed in California
Owed 50% by CalEnergy Company and
50% by Caithness Geothermal 1980 Ltd.
Coso Finance Partners II
Formed in California
Owned 50% by China Lake Geothermal Management Co., an affiliate of
Calenergy Company, Inc. and 50% by ESCA II, L.P.
Coso Land Company
Formed in California
Owned 50% by CalEnergy Company and 50% by Caithness Geothermal 1980
Ltd.
Gilbert/CBE L.P.
Limited partnership formed in Nebraska
Partnership Interests: 20% CBE Engineering Co. and 80% Gilbert
Industrial Corporation
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement, or otherwise
encumbered and subject to foreclosure or other exercise of remedies.
ii
<PAGE>
Kiewit/Holt Philippines, L.P.
Limited partnership formed in Nebraska
Partnership Interests: 20% CE Holt Company and 80% Kiewit
Industrial Co.
Saranac Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Saranac Energy Company, Inc. and 20%
affiliates of Tomen Power Corporation
NorCon Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Northern Consolidated Power, Inc. and 20%
affiliates of Tomen Power Corporation
iii
<PAGE>
[ ]
CALENERGY CAPITAL TRUST [ ]
[ ]% CONVERTIBLE PREFERRED SECURITIES
(LIQUIDATION AMOUNT $[ ] PER CONVERTIBLE PREFERRED SECURITY)
GUARANTEED TO A LIMITED EXTENT BY, AND
CONVERTIBLE INTO COMMON STOCK OF,
CALENERGY COMPANY, INC.
UNDERWRITING AGREEMENT
[ ], 199_
[UNDERWRITERS ADDRESS]
[UNDERWRITERS ADDRESS}
Dear Sirs:
1. Introductory. CalEnergy Capital Trust [ ], a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), proposes to
issue and sell to the Underwriters named in Schedule A hereto ("Underwriters")
an aggregate of [ ] (the "Firm Securities") of its [ ]% Convertible Preferred
Securities (liquidation preference $50 per convertible preferred security)
("Preferred Securities"), registered under the registration statement referred
to in Section 2(a) ("Registered Securities"). In addition, the Trust proposes
to grant to the Underwriters an option to purchase up to an additional [ ]
Preferred Securities on the terms and for the purposes set forth in Section 3
(the "Optional Securities"). The Firm Securities and the Optional Securities
which the several Underwriters named in Schedule A hereto ("Underwriters") may
elect to purchase pursuant to Section 3 hereof are herein collectively called
the "Offered Securities."
The Preferred Securities represent undivided beneficial ownership
interests in the assets of the Trust, guaranteed by CalEnergy Company, Inc.
(the "Guarantor") as to the payment of distributions, and as to payments on
liquidation or redemption, to the extent set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and Bank of New York, as trustee (the
"Guarantee Trustee"). The proceeds of the sale by the Trust of the Offered
Securities and its Common Securities (liquidation
<PAGE>
preference $50 per Common Security) (the "Common Securities") are to be
invested in [ ]% Convertible Junior Subordinated Debentures Due [ ] (the
"Junior Subordinated Debentures") of the Guarantor, to be issued pursuant to an
Indenture (the "Indenture") between the Guarantor and The Bank of New York, as
trustee (the "Debenture Trustee"). The Preferred Securities are convertible
into shares of Common Stock, par value $0.0675 per share (the "Common Stock"),
of the Guarantor pursuant to the Indenture.
The Trust and the Guarantor each hereby agrees with the Underwriters as
follows:
2. Representations and Warranties of the Trust and the Guarantor. Each
of the Trust and the Guarantor jointly and severally represents and warrants
to, and agrees with, the Underwriters that:
(a) A registration statement (No. 333-32821), including a prospectus,
relating to the Registered Securities has been filed with the Securities and
Exchange Commission ("Commission") and has become effective. Such registration
statement, as amended at the time of this Agreement, is hereinafter referred to
as the "Registration Statement," and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to reflect
the terms of the Offered Securities and the terms of the offering of the
Offered Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933
("Act"), including all material incorporated by reference therein, is
hereinafter referred to as the "Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the requirements
of the Act, the Trust Indenture Act of 1939, as amended ("Trust Indenture Act")
and the rules and regulations of the Commission thereunder ("Rules and
Regulations") and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made) and on the date of this
Agreement, the Registration Statement and the Prospectus conform in all
material respects to the requirements of the Act, the Trust Indenture Act and
the Rules and Regulations, and neither of such documents include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading (with
respect to the Prospectus, in light of the circumstances under which they were
made) except that the foregoing does not apply to statements in or omissions
from any of such documents based upon written information furnished to the
Trust or Guarantor by any Underwriter, if any, specifically for use therein.
(c) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of the
State of Delaware (the "Delaware Business Trust Act") with the power and
authority to own its property and conduct its business as described in the
Prospectus, and has conducted and will conduct no business other than the
transactions contemplated by this Agreement and the Prospectus; the Trust is a
"grantor trust" for federal income tax purposes under existing law; the Trust
is not a party to or bound by any agreement or instrument other than this
Agreement, the Amended and Restated Declaration of Trust (the "Trust
Agreement") between the Guarantor and the trustees named therein (the
"Trustees") and the agreements and instruments contemplated by the Trust
Agreement and the Prospectus; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this Agreement and
the Trust Agreement and described in the Prospectus; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature.
2
<PAGE>
(d) The Guarantor, each Subsidiary (as defined below) and each Joint
Venture (as defined below) have been duly organized and are validly existing
and, if applicable, in good standing under the laws of their respective
jurisdictions of organization as a corporation, limited liability company or
partnership, as the case may be, and have the power and authority to own, lease
and operate their property and conduct their businesses as described in the
Prospectus; the Guarantor, the Subsidiaries and the Joint Ventures are duly
qualified to do business and are in good standing as foreign corporations or
foreign partnerships, as the case may be, in each jurisdiction, domestic or
foreign, in which such registration or qualification or good standing is
required (whether by reason of the ownership or leasing of property, the
conduct of business or otherwise), except where the failure to so register or
qualify or be in good standing is not reasonably likely to have a material
adverse effect on the financial condition, business or results of operations of
the Guarantor, the Subsidiaries and Joint Ventures taken as a whole. For
purposes of this Agreement, (A) the term "Subsidiary" shall mean the entities
listed in Schedule B hereto and (B) the term "Joint Venture" shall mean the
entities listed in Schedule C hereto, it being understood that such term means
the general or limited partnership or other joint venture entity and not the
individual general or limited partners or other joint venturers thereof. The
Subsidiaries listed in Schedule B are all the material direct and indirect
"subsidiaries" of the Guarantor, as such term is defined in Rule 405 of the
Rules and Regulations, and are all of the "Significant Subsidiaries" of the
Guarantor, as such term is defined in Rule 1-02 of Regulation S-X.
(e) All the outstanding shares of capital stock of the Guarantor have
been duly and validly authorized and issued and are fully-paid and
nonassessable; all the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully-paid and
nonassessable; and except as otherwise set forth in Schedule B hereto or
disclosed in or contemplated by the Prospectus, all outstanding shares of
capital stock of each Subsidiary are owned beneficially by the Guarantor free
and clear of any material claims, liens, encumbrances and security interests.
All of the partnership interests in Joint Ventures beneficially owned by the
Guarantor (as reflected in Schedule C) have been duly and validly authorized
and issued and, except as otherwise set forth in Schedule C hereto or disclosed
in or contemplated by the Prospectus, are owned beneficially by the Guarantor
free and clear of any material claims, liens, encumbrances and security
interests.
(f) The Offered Securities have been duly and validly authorized by
the Trust, and, when issued and delivered against payment thereof as provided
herein, will be duly and validly issued and fully-paid and nonassessable
undivided beneficial interests in the assets of the Trust and will conform in
all material respects to the description thereof contained in the Prospectus;
the issuance of the Offered Securities is not subject to preemptive or other
similar rights which have not been waived; the Offered Securities will have the
rights set forth in the Trust Agreement, and the Offered Securities, when
issued and delivered against payment therefor as provided herein, will be, and
the Trust Agreement, when duly executed and delivered by all parties thereto,
will be, valid and binding obligations of the Trust, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to creditors' rights and to general equity
principles; the Offered Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
(g) The Common Securities have been duly and validly authorized by the
Trust and, upon delivery by the Trust to the Guarantor against payment therefor
as contemplated by the Prospectus, will be duly and validly issued and
fully-paid and nonassessable undivided beneficial interests in the assets of
the Trust and will conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights; and all of the
3
<PAGE>
issued and outstanding Common Securities of the Trust are directly owned by the
Guarantor free and clear of any material claims, liens, encumbrances and
security interests.
(h) The Guarantee, the Junior Subordinated Debentures, the Trust
Agreement and the Indenture (the Guarantee, the Junior Subordinated Debentures,
the Trust Agreement and the Indenture being collectively referred to as the
"Guarantor Agreements") have each been duly authorized and when validly
executed and delivered by the Guarantor and, in the case of the Guarantee, by
the Guarantee Trustee, in the case of the Trust Agreement, by the Trustees and,
in the case of the Indenture, by the Debenture Trustee, and, in the case of the
Junior Subordinated Debentures, when validly issued by the Guarantor and
validly authenticated and delivered by the Debenture Trustee and paid for by
the Trust, will constitute valid and legally binding obligations of the
Guarantor, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles; the Junior Subordinated Debentures are
entitled to the benefits of the Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the Guarantor Agreements will conform in all material respects
to the descriptions thereof in the Prospectus.
(i) When the Offered Securities are delivered and paid for pursuant to
this Agreement on each Closing Date (as defined below), such Offered Securities
will be exchangeable for Junior Subordinated Debentures which will be
convertible into shares of Common Stock ("Underlying Shares") of the Guarantor
in accordance with the Trust Agreement and the Indenture; the Underlying Shares
initially issuable upon conversion of such Offered Securities have been duly
authorized and reserved for issuance upon such conversion and, when issued upon
such conversion, will be validly issued, fully-paid and nonassessable; the
outstanding shares of Common Stock of the Guarantor conform in all material
respects to the description thereof contained in the Prospectus or incorporated
therein by reference; and the stockholders of the Guarantor have no preemptive
rights with respect to the Offered Securities, the Junior Subordinated
Debentures or the Underlying Shares which have not been waived.
(j) The use of the proceeds of the offering of the Offered Securities
as described in the Prospectus has been duly authorized by all necessary
action, if any, on the part of each of the Trust and the Guarantor in
connection with the offering of the Offered Securities.
(k) Other than pursuant to this Agreement, there are no contracts,
agreements or understandings between either the Trust or the Guarantor and any
person that would give rise to a valid claim against the Trust, the Guarantor
or either Underwriter for a brokerage commission, finder's fee or other like
payment.
(l) There are no contracts, agreements or understandings which have
not been satisfied or waived between the Trust or the Guarantor and any person
granting such person requiring the Trust or the Guarantor to include securities
of the Trust or Guarantor owned or to be owned by such person in the securities
in the securities registered pursuant to the Registration Statement.
(m) The outstanding shares of Common Stock are listed on The New York
Stock Exchange (the "Stock Exchange") and the Common Stock into which the
Offered Securities are convertible has been approved for listing on the Stock
Exchange, subject to notice of issuance. The Offered Securities have been
approved for listing on the stock exchange indicated in this agreement,
subject to notice of issuance.
4
<PAGE>
(n) The issue and sale of Offered Securities, the exchange of the
Junior Subordinated Debentures for Preferred Securities, the execution,
delivery and performance of this Agreement, the compliance by the Trust and the
Guarantor with all of the provisions of this Agreement, the purchase of the
Junior Subordinated Debentures by the Trust and the consummation of the
transactions contemplated herein will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Trust is a party or by which the Trust is bound or to
which any of the property or assets of the Trust is subject, nor will such
action result in any violation of the provisions of its certificate of trust,
the Trust Agreement or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust or any
of its properties, except for such conflicts, breaches, defaults or violations
that would not have a material adverse effect on the financial condition,
business or results of operations of the Trust.
(o) The issuance by the Guarantor of the Guarantee, the compliance by
the Guarantor with all of the provisions of this Agreement, the issuance upon
exchange and conversion of the Underlying Shares, the execution, delivery and
performance by the Guarantor of the Guarantor Agreements and the consummation
of the transactions contemplated herein and the use of the proceeds of the
offering of the Offered Securities as described in the Prospectus will not (A)
conflict with the corporate charter or by-laws or partnership agreement of the
Guarantor, any Subsidiary or any Joint Venture, (B) conflict with, result in
the creation or imposition of any lien, charge or other encumbrance (other than
as contemplated by the Indenture) upon any asset of the Guarantor, any
Subsidiary or any Joint Venture pursuant to the terms of, or constitute a
breach of, or default under, any agreement, indenture or other instrument to
which the Guarantor, any Subsidiary or any Joint Venture is a party or by which
the Guarantor, any Subsidiary or any Joint Venture is bound or to which any of
the properties of the Guarantor, any Subsidiary or any Joint Venture is
subject, or (C) result in a violation of any statute, any rule, regulation,
order, judgment or decree of any court or governmental agency, body or
authority having jurisdiction over the Guarantor, any Subsidiary or any Joint
Venture or any of their properties where any such conflicts, encumbrances,
breaches, defaults or violations under clauses (B) or (C), individually or in
the aggregate, is reasonably likely to (i) have a material adverse effect on
the financial condition, business or results of operations of the Guarantor,
the Subsidiaries and Joint Ventures taken as a whole or (ii) impair the
validity or enforceability of this Agreement, the Guarantor Agreements or the
Securities.
(p) Except (A) as to state or foreign securities laws or by the
regulations of the National Association of Securities Dealers, Inc. (the
"NASD") and (B consents of third parties which have been obtained, no consent,
approval, authorization or order of, or filing or registration by the Trust,
the Guarantor, any Subsidiary or, to the best of the Trust's and Guarantor's
knowledge, any Joint Venture with, any court, governmental agency or third
party is required in connection with the issuance by the Guarantor of the
Guarantee, the compliance by the Guarantor with all of the provisions of this
Agreement, the issuance and sale of the Offered Securities by the Trust, the
exchange of the Junior Subordinated Debentures for the Preferred Securities or
the purchase of the Junior Subordinated Debentures by the Trust, the issuance
upon exchange and conversion of the Underlying Shares, the execution, delivery
and performance by the Guarantor of the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated and the use of
the proceeds of the offering of the Offered Securities as described in the
Prospectus.
(q) The Trust has full power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement and to execute,
deliver and perform this Agreement.
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(r) This Agreement has been duly authorized, executed and delivered by
the Trust and the Guarantor.
(s) Except as disclosed in the Prospectus, the Trustee (as defined in
the Prospectus) will on the Closing Date have good and valid title to all the
Junior Subordinated Debentures, free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with the use
made or to be made thereof by the Trust.
(t) Except as disclosed in or contemplated by the Prospectus, the
Guarantor, each Subsidiary and each Joint Venture holds, as applicable, good
and valid title to, or valid and enforceable leasehold or contractual interests
in, all real properties and all other properties and assets owned or leased by
or held under contract by each of them that are material to the business of the
Guarantor and the Subsidiaries and Joint Ventures taken as a whole, and free
from liens, encumbrances and defects that would materially interfere with the
use made or to be made thereof by them.
(u) Except as disclosed in or contemplated by the Prospectus, the
Guarantor, the Subsidiaries and the Joint Ventures carry, or are covered by,
insurance in such amounts and covering such risks as is customary for similarly
situated companies in the Guarantor's, such Subsidiaries' and such Joint
Ventures' industries, respectively. Each of the foregoing insurance policies is
valid and in full force and effect, and no event has occurred and is continuing
that permits, or after notice or lapse of time or both would permit,
modifications or terminations of the foregoing that, individually or in the
aggregate, is reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the Guarantor, the
Subsidiaries and Joint Ventures taken as a whole.
(v) Except as disclosed in or contemplated by the Prospectus, the
Guarantor, each Subsidiary and each Joint Venture (i) has obtained each
license, permit, certificate, franchise or other governmental authorization
which is material to the ownership of their properties or to the conduct of
their businesses as described in or contemplated by the Prospectus and (ii) is
in compliance with all terms and conditions of such license, permit,
certificate, franchise or other governmental authorization, except (A) in
either case where the failure to do so is not reasonably likely to have,
individually or in the aggregate, a material adverse effect on the financial
condition, business or results of operations of the Guarantor, the Subsidiaries
and Joint Ventures taken as a whole, (B) permits, consents and approvals that
may be required for future drilling or operating activities which are
ordinarily deemed to be ministerial in nature and which are anticipated to be
obtained in the ordinary course and (C) permits, consents and approvals for
developmental or construction activities which have not yet been obtained but
which have been or will be applied for in the course of development or
construction and which are anticipated to be obtained in the ordinary course.
(w) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings before any court, governmental
agency, body or authority, domestic or foreign, now pending or, to the
knowledge of the Guarantor, threatened against, or, to the knowledge of the
Guarantor, involving, the Guarantor, any Subsidiary or any Joint Venture that,
if determined adversely to the Guarantor, any Subsidiary or any Joint Venture,
would be reasonably likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, business or results of
operations of the Guarantor, the Subsidiaries and Joint Ventures taken as a
whole, or on the ability of the Guarantor to perform its obligations under the
Indenture, the Guarantee Agreements or which are otherwise material in the
context of the sale of the Offered Securities.
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(x) The Guarantor, the Subsidiaries and the Joint Ventures are
currently conducting their respective businesses as described in the
Prospectus.
(y) There are no contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed as
required under the Securities Act.
(z) There is no relationship, direct or indirect, that exists between
or among the Guarantor on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Guarantor on the other hand, of a
character required to be described in the Registration Statement or Prospectus
which has not been described as required under the Securities Act.
(aa) There is no labor problem or disturbance with the persons
employed by the Guarantor, any Subsidiary or any Joint Venture that exists or,
to the knowledge of the Guarantor, that is threatened and that might reasonably
be expected to have a material adverse effect on the financial condition,
business or results of operations of the Guarantor, the Subsidiaries and Joint
Ventures taken as a whole.
(ab) Neither the Guarantor nor any person who is a member of a group
which is under common control with the Guarantor and the Subsidiaries and Joint
Ventures, who together with the Guarantor, the Subsidiaries and the Joint
Ventures is treated as a single employer ("ERISA Affiliate") within the meaning
of Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"), or Section 4001(b) of the Employee
Retirement Income Security Act of 1974, as amended from time to time ("ERISA"),
has established, sponsored, maintained or had any obligation to contribute to
any employee benefit plans within the meaning of Section 3(3) of ERISA which
are subject to Title IV of ERISA or Section 412 of the Code. Except where it
could not reasonably be expected to result in a material adverse effect on the
financial condition, business or results of operations of the Guarantor, the
Subsidiaries and Joint Ventures taken as a whole, (i) all employee benefit
plans within the meaning of Section 3(3) of ERISA established, sponsored or
maintained for or on behalf of the employees, officers or directors of the
Guarantor, the Subsidiaries, Joint Ventures or any ERISA Affiliate ("Employee
Benefit Plans") are in compliance with all applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder and each
such Employee Benefit Plan that is intended to be qualified under Code Section
401(a) has been determined by the Internal Revenue Service to be so qualified
and (ii) no material liability or obligation has been incurred or is reasonably
expected to be incurred by the Guarantor, the Subsidiaries or Joint Ventures or
any ERISA Affiliate with respect to any Employee Benefit Plan.
(ac) None of the Trust, the Guarantor, any Subsidiary or any Joint
Venture (i) is in violation of its respective declaration of trust, charter,
by-laws, partnership or operating agreements, (ii) is in default, and no event
exists and is continuing that, with notice or lapse of time or both, would
constitute such a default, in the due performance and observance of any
material term contained in any lease, license, indenture, mortgage, deed of
trust, note, bank loan or other evidence of indebtedness or any other
agreement, understanding or instrument to which the Trust, the Guarantor, any
Subsidiary or any Joint Venture is a party or by which the Trust, the
Guarantor, any Subsidiary or any Joint Venture or any property of the Trust,
the Guarantor, any Subsidiary or any Joint Venture may be bound or affected,
which default, individually or in the aggregate, is reasonably likely to have a
material adverse effect on the financial condition, business or results of
operations of the Trust or the Guarantor, the Subsidiaries and Joint Ventures
taken as a whole, or (iii) is in violation of any law, ordinance, governmental
rule or regulation or court decree to which it may be subject, which violation,
individually or in the aggregate,
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is reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Trust or the Guarantor, the
Subsidiaries and Joint Ventures taken as a whole or would materially interfere
with the execution, delivery and performance of this Agreement and the
Guarantor Agreements, the consummation of the transactions contemplated herein
and therein, the issuance and sale of the Securities and the use of the
proceeds of the offering of the Offered Securities as described in the
Prospectus.
(ad) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances, pollutants or contaminants by the Guarantor,
any Subsidiary or any Joint Venture (or, to the knowledge of the Guarantor, any
of their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Guarantor, any Subsidiary or any Joint
Venture in violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit,
except for any violation or remedial action which does not have, or would not
be reasonably likely to have, individually or in the aggregate with all such
violations and remedial actions, a material adverse effect on the financial
condition, business or results of operations of the Guarantor, the Subsidiaries
and Joint Ventures taken as a whole; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
toxic wastes, solid wastes, hazardous wastes or hazardous substances,
pollutants or contaminants due to or caused by the Guarantor, any Subsidiary or
any Joint Venture or with respect to which the Guarantor, any Subsidiary or any
Joint Venture has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which does not have, or would
not be reasonably likely to have, individually or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the financial condition, business or
results of operations of the Guarantor, the Subsidiaries and Joint Ventures
taken as a whole; and the terms "hazardous wastes", "toxic wastes" and
"hazardous substances" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
(ae) None of the Trust, the Guarantor or any Subsidiary or any Joint
Venture is an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the United States Investment Company Act of 1940, as amended (the "1940 Act"),
nor is it a closed-end investment company required to be registered, but not
registered, thereunder; and each of the Trust, the Guarantor, each Subsidiary
and each Joint Venture is not and, after giving effect to the offering and sale
of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company", or, to the
best knowledge of the Guarantor after due inquiry, a company controlled by an
"investment company" within the meaning of the 1940 Act.
(af) The Guarantor, each Subsidiary and each Joint Venture has filed
all federal, state and local income and franchise tax returns required to be
filed through the date hereof, or has filed extensions in accordance with
applicable law, and has paid all taxes required to be paid through the date
hereof thereon, except for such failures to file or pay that would not,
individually or in the aggregate, be reasonably likely to have a material
adverse effect on the financial condition, business or results of operations of
the Guarantor, the Subsidiaries and Joint Ventures taken as a whole, and no tax
deficiency has been determined adversely to the Guarantor, any Subsidiary or
any Joint Venture that has had (nor does the Guarantor have any knowledge of
any tax deficiency which, if determined adversely to the Guarantor, any
Subsidiary or any Joint Venture would be reasonably likely to have) a material
adverse effect on the
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financial condition, business or results of operations of the Guarantor, the
Subsidiaries and Joint Ventures taken as a whole.
(ag) The financial statements and the related notes and schedules
included or incorporated by reference in the Registration Statement and
Prospectus fairly present the financial position, the results of operations and
the cash flows of the Guarantor and its consolidated subsidiaries at the
respective dates and for the respective periods to which they apply; and such
financial statements and the related notes and schedules have been prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis throughout the periods therein specified. The historical
information under the caption "Capitalization" in the Prospectus is accurately
described as of the date presented therein.
(ah) Since the date of the latest financial statements included or
incorporated by reference in the Prospectus (i) there has been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the financial condition, business or results of operations
of the Guarantor, the Subsidiaries and Joint Ventures taken as a whole, and
(ii) except as disclosed in or contemplated by the Prospectus, there have not
been any transactions entered into by the Guarantor, the Subsidiaries or any
Joint Venture, other than those in the ordinary course of business, which are
material to the Guarantor, the Subsidiaries and Joint Ventures taken as a
whole; and, except as disclosed in the Prospectus, there has been no dividend
or distribution of any kind declared, paid or made by the Guarantor on any
class of its capital stock.
(ai) If pro forma information is included in the Registration
Statement and the Prospectus: The pro forma financial information included in
the Registration Statement and Prospectus presents fairly the information shown
therein, has been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial information, has been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Guarantor, the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(aj) The Guarantor has complied with all applicable provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(ak) The accountants who have certified certain financial statements
of the Guarantor or of businesses acquired by the Guarantor, as applicable, and
whose respective reports appear in the Registration Statement and Prospectus or
are incorporated by reference therein, are and were independent public
accountants as required by the Act and the Rules and Regulations during the
periods covered by the financial statements on which they reported which are
contained or incorporated by reference in the Registration Statement and
Prospectus.
(al) (i) Each of the operational electric generation facilities
("Plants") owned in whole or in part, directly or indirectly by (A) the
Guarantor, (B) the Subsidiaries or (C) the Joint Ventures which is located in
the United States is a "qualifying cogeneration facility" or a "qualifying
small power production facility" (either or both of which are hereinafter
referred to as a "QF"), as such terms are defined under the Federal Power Act,
as amended ("FPA"), and the regulations thereunder, and has continuously been
in compliance with the requirements for being a QF since it commenced sales of
electricity; (ii) with respect to each Plant under development and located in
the United States, either (x) to the extent that the Guarantor, the
Subsidiaries or the Joint Ventures plan to act as the owner and/or operator of
any one of
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the Plants under development by the Guarantor, the Subsidiaries or the Joint
Ventures and located in the United States (as currently configured or as
currently anticipated to be configured), that owner and/or operator satisfies
or is currently expected to satisfy current regulatory requirements for being
an "exempt wholesale generator" ("EWG"), as such term is defined under the FPA,
the Public Utility Holding Company Act of 1935, as amended ("PUHCA") and the
regulations thereunder or (y) each of the Plants under development by the
Guarantor, the Subsidiaries or the Joint Ventures and located in the United
States (as currently configured or as currently anticipated to be configured)
will be a QF and will be in continuous compliance with the requirements for
being a QF; (iii) the owner or operator of each of the Plants under development
by the Guarantor, the Subsidiaries or Joint Ventures and located outside the
United States (as currently configured or as currently anticipated to be
configured) satisfies or is currently expected to satisfy current regulatory
requirements for being either (A) an EWG or (B) a "foreign utility company," as
such term is defined under PUHCA and the regulations thereunder; (iv) none of
the entities identified in clause (A) or (B) of subparagraph (i) above owns or
operates or will own or operate any electric distribution facilities or any
electric transmission facilities in or outside of the United States other than
electric transmission facilities that have been or will be approved by the
Federal Energy Regulatory Commission as being part of a QF, or the owner and/or
operator of which will have qualified as EWG's or as "foreign utility
companies" as such terms are defined under the FPA, PUHCA and the regulations
thereunder; and (v) none of the entities identified in clause (A), (B) or (C)
of subparagraph (i) above is, or is subject to regulation as, a "public utility
holding company" or a "subsidiary company" of a "public utility holding
company," as those terms are defined under PUHCA, or is subject to regulation
under the FPA, other than as contemplated by 18 C.F.R Section 292.601(c), or,
except as described in or contemplated by the Prospectus, subject to regulation
by any state law or foreign governmental law with respect to rates or the
financial or organizational regulation of electric utilities.
3. Purchase of the Offered Securities. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Trust agrees to sell to the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase the
number of Firm Securities set opposite that Underwriter's name in Schedule A
hereto.
In addition, the Trust grants to the Underwriters an option to
purchase up to an additional [ ] Preferred Securities. Such option is granted
solely for the purpose of covering over-allotments in the sale of Firm
Securities and is exercisable as provided in Section 4 hereof. Optional
Securities shall be purchased severally for the account of the Underwriters in
proportion to the number of Firm Securities set opposite the name of such
Underwriter in Schedule A hereto. The respective purchase obligations of each
Underwriter with respect to the Optional Securities shall be adjusted so that
no Underwriter shall be obligated to purchase Optional Securities other than in
lots of 100 Optional Securities. The price of the Offered Securities shall be
$50 per Preferred Security, plus accrued and unpaid distributions from the
First Closing Date (as defined below).
The Trust shall not be obligated to deliver any of the Offered
Securities to be delivered on the First Closing Date or the Optional Closing
Date (as defined below), as the case may be, except upon payment for all the
Offered Securities to be purchased on such Closing Date as provided herein.
4. Delivery of and Payment for the Offered Securities. Delivery of and
payment for the Firm Securities shall be made at the office of Skadden, Arps,
Slate, Meagher & Flom LLP, 919 Third Avenue, New York, NY, at 10:00 a.m., New
York City time, on [ ], ______ or at such other date (not later than seven full
business days thereafter), time or place as shall be determined by agreement
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between the Underwriters and the Trust. This date and time are hereinafter
referred to as the "First Closing Date."
On the First Closing Date, the Trust shall deliver or cause to be
delivered certificates representing the Firm Securities to the Underwriters for
the account of each Underwriter against payment to or upon the order of the
Trust of the purchase price by certified or official bank check or checks
payable in immediately available funds or wire transfer to an account in New
York previously designated to the Underwriters by the Trust. The Firm
Securities to be offered and sold by the Underwriters shall be (i) in the form
of one or more permanent global securities in definitive form (the "Firm Global
Securities"), (ii) registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC") and (iii) delivered to The Bank of New York as
custodian for DTC. Interests in any Firm Global Securities will be held only in
book-entry form through DTC, except in the limited circumstances described in
the Prospectus. For the purpose of expediting the checking and packaging of the
certificates for the Firm Securities, the Trust shall make the certificates
representing the Firm Securities available for inspection by the Underwriters
in New York, New York, not later than 2:00 p.m., New York City time, on the
business day prior to the First Closing Date. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 3 may be exercised by written notice
being given to the Trust by the Underwriters. Such notice shall set forth the
aggregate number of Optional Securities as to which the option is being
exercised and the date and time, as determined by the Underwriters, when the
Optional Securities are to be delivered; provided, however, that this date and
time shall not be earlier than the First Closing Date nor earlier than the
third business day after the date on which the option shall have been exercised
nor later than the seventh business day after the date on which the option
shall have been exercised. The date and time the Optional Securities are
delivered are hereinafter referred to as the "Optional Closing Date" and the
First Closing Date and the Optional Closing Date are each hereinafter referred
to as a "Closing Date".
Delivery of and payment for the Optional Securities shall be made at
the place specified in the first sentence of the first paragraph of this
Section 4 (or at such other place as shall be determined by agreement between
the Underwriters and the Trust) at 10:00 a.m., New York City time, on the
Optional Closing Date. On the Optional Closing Date, the Trust shall deliver or
cause to be delivered certificates representing the Optional Securities to the
Underwriters for the account of each Underwriter against payment to or upon the
order of the Trust of the purchase price by certified or official bank check or
checks payable in immediately available funds or wire transfer to an account in
New York previously designated to the Underwriters by the Trust. The Optional
Securities to be offered and sold by the Underwriters shall be (i) in the form
of one or more permanent global securities in definitive form (the "Optional
Global Securities"), (ii) registered in the name of Cede & Co., as nominee for
DTC and (iii) delivered to The Bank of New York as custodian for DTC. Interests
in any Optional Global Securities will be held only in book-entry form through
DTC, except in the limited circumstances described in the Prospectus. For the
purpose of expediting the checking and packaging of the certificates for the
Optional Securities, the Trust shall make the certificates representing the
Optional Securities available for inspection by the Underwriters in New York,
New York, not later than 2:00 p.m., New York City time, on the business day
prior to the Optional Closing Date. Time shall be of the essence, and delivery
at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder.
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As compensation for the Underwriters' commitments, the Guarantor will
pay to the Underwriters for their proportionate accounts on each Closing Date
$[ ] per each Preferred Security purchased by such Underwriter on the
respective Closing Date.
5. Further Agreements of the Trust and the Guarantor. It is understood
that the several Underwriters propose to offer the Offered Securities for sale
to the public as set forth in the Prospectus.
6. Further Agreements of the Trust and the Guarantor. Each of the
Trust and the Guarantor agrees with the several Underwriters that it will
furnish to counsel for the Underwriters, one signed copy of the registration
statement relating to the Registered Securities, including all exhibits, in the
form it became effective and of all amendments thereto and that, in connection
with each offering of Offered Securities:
(a) The Guarantor will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Underwriters, subparagraph (5)) not later than the second
business day following the execution and delivery of the this agreement.
(b) The Trust and the Guarantor will advise the Underwriters promptly
of any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Underwriters a reasonable opportunity to comment
on any such proposed amendment or supplement; and the Trust and Guarantor will
also advise the Underwriters promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part thereof and
will use their best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales
by any Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Guarantor promptly will notify the Underwriters of
such event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the
Underwriters' consent to, nor the delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than 16 months, after the
date of this agreement, the Guarantor will make generally available to its
security holders an earnings statement covering a period of at least 12 months
beginning after the later of (i) the effective date of the registration
statement relating to the Registered Securities, (ii) the effective date of the
most recent post-effective amendment to the Registration Statement to become
effective prior to the date of this Agreement and (iii) the date of the
Guarantor's most recent Annual Report on Form 10-K filed with the Commission
prior to the date of this agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Trust and the Guarantor will furnish to the Underwriters
copies of the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each case
as soon
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as available and in such quantities as the Underwriters reasonably requests.
The Guarantor will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Trust and the Guarantor will arrange, in cooperation with the
Underwriters and their counsel, for the qualification of the Offered Securities
for sale and the determination of their eligibility for investment under the
laws of such jurisdictions as the Underwriters designate and will continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Underwriters; provided, however, that the Trust and the
Guarantor will not be required to qualify as a foreign corporation, to file a
general consent to service of process in any such jurisdiction or to take any
other action that would subject the Trust or the Guarantor to service of
process in any suits other than those arising out of the offering of the
Securities or to taxation in respect of doing business in any jurisdiction in
which it is not otherwise subject.
(g) During the period of three years hereafter, the Guarantor will
furnish to the Underwriters as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year, and the
Guarantor will furnish to the Underwriters as soon as available, a copy of each
report and any definitive proxy statement of the Guarantor filed with the
Commission under the Securities Exchange Act of 1934 (the "Exchange Act") or
mailed to stockholders.
(h) The Guarantor will pay all expenses incident to the performance of
its obligations under this agreement, for any filing fees or other expenses
(including reasonable fees and disbursements of counsel) in connection with
qualification of the Registered Securities for sale and any determination of
their eligibility for investment under the laws of such jurisdictions as the
Underwriters may designate and the printing of memoranda relating thereto, for
any fees charged by investment rating agencies for the rating of the Offered
Securities, for any applicable filing fee incident to, and the reasonable fees
and disbursements of counsel for the Underwriters in connection with, the
review by the National Association of Securities Dealers, Inc. of the
Registered Securities, for any travel expenses of the Guarantor's officers and
employees and any other expenses of the Guarantor in connection with attending
or hosting meetings with prospective purchasers of Registered Securities and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses, any preliminary prospectus supplements or any other amendments or
supplements to the Prospectus to the Underwriters.
(i) During the period of two years after the later of the First
Closing Date and the last Optional Closing Date, the Guarantor and the Trust
will not be or become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the 1940 Act and is not, and will not be or become, a closed-end
investment company required to be registered, but not registered, under the
1940 Act.
(j) For a period of [ ] days after the date hereof, the Trust and the
Guarantor will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to (a) any trust certificates or other
securities of the Trust (other than the Trust Securities (as defined in the
Prospectus)), (b) any preferred stock or any other securities of the Guarantor
which are substantially similar to the Preferred Securities, (c) any shares of
Common Stock of the Guarantor or any other capital stock of the Guarantor, or
(d) any other securities which are convertible into, or exercisable or
exchangeable for, trust certificates or other securities of the Trust, or
preferred stock or such substantially similar securities of the Guarantor, or
Common Stock of the Guarantor or other capital stock of the Guarantor, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the Underwriters,
except
13
<PAGE>
the offer, sale, contract to sell, or other disposition of (i) the Offered
Securities, (ii) Common Stock of the Guarantor issued or delivered upon
conversion of the Offered Securities or the Junior Subordinated Debentures,
(iii) securities issued or delivered upon conversion, exchange or exercise of
any other securities of the Guarantor or any other statutory trust affiliated
or associated with the Guarantor outstanding on the date of the Prospectus, or
(iv) capital stock of the Guarantor issued pursuant to benefit or incentive
plans maintained for its officers, directors or employees (including its
employee stock purchase or stock option plans), or (v) securities issued in
connection with mergers, acquisitions or similar transactions.
(k) The Trust and the Guarantor will apply the proceeds of the
offering and sale of the Offered Securities in the manner contemplated in the
Prospectus under the caption "Use of Proceeds."
7. Conditions of the Obligations of the Underwriters. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Closing Date, of the representations and warranties of the
Trust and the Guarantor contained herein, to the performance by the Trust and
the Guarantor of their respective obligations hereunder, and to the following
additional terms and conditions:
(a) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Offered Securities, the
Registration Statement and Prospectus and the Guarantor Documents, and all
other legal matters relating to such agreements and the transactions
contemplated thereby shall be satisfactory in all material respects to counsel
for the Underwriters, and the Trust and the Guarantor shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(b) The Underwriters shall have received a letter, dated the date of
this Agreement, of Deloitte & Touche LLP or any successor firm (or any other
firm of independent accountants of the Guarantor or any subsidiary of the
Guarantor or of any business acquired by the Guarantor for which financial
statements and/or financial data are included or incorporated by reference in
the Registration Statement and Prospectus) in agreed form.
(c) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this Agreement.
No stop order suspending the effectiveness of the Registration Statement or of
any part thereof shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Guarantor or any
Underwriter, shall be contemplated by the Commission.
(d) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus (i) except as disclosed in the
Prospectus, there shall have been no material adverse change, or a development
which is reasonably likely to lead to a material adverse change, in the
financial condition, business or results of operations of the Guarantor, the
Subsidiaries and Joint Ventures taken as a whole and (ii) except as disclosed
in the Prospectus, there shall not have been any transactions entered into by
the Guarantor, any Subsidiary or any Joint Venture, other than those in the
ordinary course of business, which are material and adverse to the Guarantor,
the Subsidiaries and Joint Ventures taken as a whole, and which, in the
judgment of the Underwriters, make it impracticable or inadvisable to proceed
with the offering or the delivery of the Offered Securities on the terms and in
the manner contemplated in the Prospectus.
14
<PAGE>
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in or affecting particularly the business or properties of
the Trust or the Guarantor, the Subsidiaries and Joint Ventures taken as a
whole, which is material and adverse, and which, in the judgment of the
Underwriters, makes it impractical or inadvisable to proceed with completion of
the public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities or preferred stock of the
Guarantor by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any public announcement
that any such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Guarantor (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Guarantor on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in which
the United States is involved, any declaration of war by the United States
Congress or any other substantial national or international calamity or
emergency if, in the judgment of the Underwriters, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it impractical
or inadvisable to proceed with completion of the offering or sale of and
payment for the Offered Securities.
(f) The Underwriters shall have received opinions, dated such Closing
Date, of:
(i) Steven A. McArthur, General Counsel to the Guarantor;
(ii) Willkie Farr & Gallagher, special counsel to the Trust and the
Guarantor;
(iii) [ ], special Delaware counsel to
the Trust and the Guarantor;
(iv) [ ], special counsel to The Bank
of New York; and
(v) [ ], special counsel to The Bank
of New York (Delaware)
in agreed upon form.
(g) The Underwriters shall have received from Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Guarantor and
the formation of the Trust, the validity of the Offered Securities, the
Prospectus, the exemption from registration for the offer and sale of the
Offered Securities by the Guarantor to the Underwriters and the resales by the
Underwriters as contemplated hereby and other related matters as the
Underwriters may require, and the Trust and the Guarantor shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(h) The Underwriters shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Guarantor in which such officers, to the best of
their knowledge after reasonable investigation, shall state that (i) the
representations and warranties of the Trust and the Guarantor in this Agreement
are true and correct in all material respects, (ii) the Trust and the Guarantor
have complied with all agreements and satisfied all conditions
15
<PAGE>
on their part to be performed or satisfied hereunder at or prior to such
Closing Date, (iii) no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no proceeding
for that purpose have been instituted or are contemplated by the Commission and
(iv) subsequent to the dates of the most recent financial statements in the
Prospectus there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the financial
condition, business or results of operations of the Guarantor, the Subsidiaries
and Joint Ventures taken as a whole except as set forth in or contemplated by
the Prospectus or as described in such certificate.
(i) The Underwriters shall have received a letter, dated such Closing
Date, of Deloitte & Touche LLP and such other independent accountants for
subsidiaries and acquired businesses which meet the requirements of subsection
(b) of this Section 7, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing Date
for the purposes of this subsection.
(j) The Trust and the Guarantor shall have furnished the Underwriters
with such conformed copies of such opinions, certificates, letters and
documents as the Underwriters reasonably requested.
(k) The Guarantor and Kiewit Energy Company, Inc. ("Kiewit") shall
have entered into an agreement, in form and substance satisfactory to the
Underwriters, whereby Kiewit shall have waived any and all preemptive rights to
which it would otherwise be entitled as a result of the execution, delivery and
performance by the Trust and/or the Guarantor of this Agreement and the
Guarantor Agreements, the consummation of the transactions herein and therein
contemplated and the use of the proceeds of the offering as described in the
Prospectus, the issuance and sale of the Offered Securities or the Common
Securities by the Trust, the exchange of the Junior Subordinated Debentures for
the Offered Securities, the purchase of the Junior Subordinated Debentures by
the Trust or the issuance by the Guarantor of the Guarantee, the purchase by
the Guarantor of the Common Securities or the issuance of the Underlying Shares
upon conversion of the Offered Securities and the Junior Subordinated
Debentures.
The Underwriters may in their sole discretion waive compliance with any
conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise. Documents described as being "in the
agreed form" are documents which are in the forms which have been approved by
Skadden, Arps, Slate, Meagher & Flom LLP, as counsel to the Underwriters, and
copies of which are held by the Guarantor and the Underwriters, with such
changes as the Underwriters may approve.
8. Indemnification and Contribution.
(a) The Trust and the Guarantor will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, to which that
Underwriter may become subject, under the Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (with respect
to the Prospectus, in light of the circumstances under which they were made)
not misleading and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by that Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Trust
16
<PAGE>
and the Guarantor will not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Trust or the Guarantor by either Underwriter
specifically for use therein, it being understood and agreed that the only such
information consists of the information described as such in subsection (b)
below; and provided, further, that, with respect to any untrue statement
contained in or omission from the any preliminary prospectus, this indemnity
agreement shall not inure to the benefit of any Underwriter on account of any
loss, claim, damage, liability or action arising from the sale of any Offered
Securities to any person in the initial resale by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the Act,
and the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such preliminary
prospectus was corrected in the Prospectus, as the same may be amended or
supplemented, and the Prospectus was made available to that Underwriter prior
to the sale of the Offered Securities. For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated by reference therein, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference in any preliminary prospectus or Prospectus to any
person other than a person to whom such Underwriter had delivered such
incorporated document or documents in response to a written request therefor.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Trust and the Guarantor against any losses, claims, damages or
liabilities to which the Trust or the Guarantor may become subject, under the
Act or the Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (with respect to the Prospectus, in
light of the circumstances under which they were made) not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Trust and the
Guarantor by such Underwriter specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by the Trust or the Guarantor
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by such Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: [ ].
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above, except to the extent it has been materially
prejudiced by such failure; and provided, further, that such omission will not
relieve it from any liability which it may otherwise have to an indemnified
party. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and after notice from the indemnifying party
17
<PAGE>
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the indemnified party shall
have the right to employ counsel to represent the indemnified party and its
respective controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the indemnified party
against the indemnifying party under this Section 8 if the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action or, if in the written opinion of
counsel to either the indemnifying party or the indemnified party,
representation of both parties by the same counsel would be inappropriate due
to actual or likely conflicts of interest between them, and in that event the
fees and expenses of one firm of separate counsel (in addition to the fees and
expenses of local counsel) shall be paid by the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld, effect any settlement
of any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion
as is appropriate to reflect the relative benefits received by the Trust and
the Guarantor on the one hand and the Underwriters on the other from the
offering of the Offered Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Trust and the Guarantor on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Trust and the Guarantor on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Trust bear to the
total discounts and commissions received by the Underwriters from the Guarantor
under this Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust, the Guarantor or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the Offered Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
18
<PAGE>
The Underwriters' obligations in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Trust and the Guarantor under this Section
shall be in addition to any liability which the Trust or the Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
director, officer, employee and agent of the Underwriters and to each person,
if any, who controls either Underwriter within the meaning of the Act; and the
obligations of each Underwriter under this Section shall be in addition to any
liability which such Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each director, to each officer who has signed the
Registration Statement and to each person, if any, who controls the Trust or
the Guarantor within the meaning of the Act.
9. Default of Underwriters. If any Underwriter or Underwriters default
in its obligations to purchase Offered Securities hereunder on either the First
Closing Date or any Optional Closing Date and arrangements satisfactory to the
Trust and the Guarantor for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Trust or the Guarantor, except as provided in Sections 6, 10 and 13
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement shall not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
10. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated pursuant to Section 9 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Trust and the
Guarantor shall remain responsible for the expenses to be paid or reimbursed by
them pursuant to Section 6. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 9 or the occurrence of any
event specified in clause (iii), (iv) or (v) of Section 7(e), the Trust and the
Guarantor will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities; provided that the Trust
and the Guarantor shall not be obligated under this Section 10 to reimburse the
Underwriters for any expenses (including any reasonable fees and disbursements
of counsel) in excess of $[ ].
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to (i) [ ]; and (ii) [ ];
(b) if to the Trust or the Guarantor, shall be delivered or sent by
mail, telex or facsimile transmission to the Guarantor at 302 South 36th
Street, Suite 400, Omaha, Nebraska 68131, Attention: General Counsel (Fax:
402-231-1658);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address shall be supplied to any other party hereto by the
Underwriters upon
19
<PAGE>
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Trust and the Guarantor shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriter by either Underwriter.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
13. Survival. The respective indemnities, representations, warranties
and agreements of the Trust, the Guarantor and the Underwriters contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Offered Securities
and shall remain in full force and effect, regardless of any investigation made
by or on behalf of any of them or any person controlling any of them. If this
Agreement is terminated pursuant to Section 9 or if for any reason the purchase
of the Offered Securities by the Underwriters is not consummated, the
respective obligations of the Trust, the Guarantor and the Underwriters
pursuant to Section 8 shall remain in effect.
14. Definition of the Term "Business Day". For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS. Each of the Trust and the Guarantor hereby
submits to the non-exclusive jurisdiction of the Federal and state courts in
the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
20
<PAGE>
If the foregoing correctly sets forth the agreement among the Trust,
the Guarantor and the Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
CALENERGY CAPITAL TRUST [ ]
By [ ], solely in his
capacity as trustee and not in his indi-
vidual capacity,
-----------------------------------
[ ]
By [ ], solely in his
capacity as trustee and not in his indi-
vidual capacity,
-----------------------------------
[ ]
CALENERGY COMPANY, INC.
By
---------------------------------
Name:
Title:
Accepted:.
[UNDERWRITER]
By
---------------------------
Name:
Title:
[UNDERWRITER]
By
---------------------------
Name:
Title:
<PAGE>
SCHEDULE A
----------
Number of
Underwriter Firm Securities
- ----------- ---------------
[ ].....................................[ ]
[ ].....................................[ ]
Total..........................................[ ]
==================
<PAGE>
SCHEDULE B
----------
Subsidiaries
------------
Coso Funding Corp.+
Incorporated in Delaware
Coso Hotsprings Intermountain Power, Inc. (CHIP)+
Incorporated in Delaware
China Lake Operating Co. (CLOC)+
Incorporated in Delaware
Coso Technology Corporation (CTC)+
Incorporated in Delaware
China Lake Geothermal Management Company (CLGMC)+
Incorporated in Delaware
China Lake Plant Services, Inc. +
Incorporated in California
Coso Hotsprings Overland Power, Inc.+
Incorporated in Delaware
CE Geothermal, Inc.
Incorporated in Delaware
Western States Geothermal Company
Incorporated in Delaware
Intermountain Geothermal Company
Incorporated in Delaware
CalEnergy Development Corporation
Incorporated in Delaware
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
California Energy Yuma Corporation
Incorporated in Utah
California Energy General Corporation
Incorporated in Delaware
Rose Valley Properties, Inc.
Incorporated in Delaware
CE Holt Company, Inc.
Incorporated in Delaware
CBE Engineering Co.
Incorporated in California
CE Exploration Company
Incorporated in Delaware
CE Newberry, Inc.
Incorporated in Delaware
CE International Investments Inc.
Incorporated in Delaware
CE Philippines Ltd.
Incorporated in Bermuda
CE Mahanagdong Ltd.
Incorporated in Bermuda
Ormoc Cebu Ltd.
Incorporated in Bermuda
CE Cebu Geothermal Power Company, Inc.+
Incorporated in the Philippines
CE Indonesia Ltd.+
Incorporated in Bermuda
CE Casecnan Ltd.
Incorporated in Bermuda
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
CE Singapore Ltd.
Incorporated in Bermuda
CalEnergy International Ltd.
Incorporated in Bermuda
CE Bali, Ltd.
Incorporated in Bermuda
CE Casecnan Water and Energy Company, Inc.+
Incorporated in the Philippines
Capital Stock: Owned 35% by CE Casecnan Ltd.,
35% by Kiewit Energy International (Bermuda) Ltd.,
15% by La Prairie Group Contractors (International) Ltd and
15% by San Lorenzo Ruiz Builders & Developers Group, Inc.
Magma Power Company+
Incorporated in Nevada
CalEnergy Operating Company+
Incorporated in Delaware
Salton Sea Power Company+
Incorporated in Nevada
Vulcan Power Company+
Incorporated in Nevada
Imperial Magma+
Incorporated in Nevada
Magma Land Company I+
Incorporated in Nevada
Desert Valley Company+
Incorporated in California
Fish Lake Power Company+
Incorporated in Delaware
Magma Netherlands B.V.+
Formed in the Netherlands
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
Tongonan Power Investment, Inc.+
Incorporated in the Philippines
Salton Sea Funding Corporation (SSFC)+
Incorporated in Delaware
Salton Sea Royalty Company+
Incorporated in Delaware
CE Asia Ltd.+
Incorporated In Bermuda
American Pacific Finance Company
Incorporated in Delaware
The Ben Holt International Co., Inc.
Incorporated in Delaware
CalEnergy International Services, Inc.
Incorporated in Delaware
CalEnergy Imperial Valley Company, Inc.
Incorporated in Delaware
California Energy Retail Company, Inc.
Incorporated in Delaware
CE Humboldt, Inc.
Incorporated in Delaware
CE Ijen Ltd.
Incorporated in Bermuda
Magma Generating Company I
Incorporated in Nevada
Magma Generating Company II
Incorporated in Nevada
Peak Power Corporation
Incorporated in California
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
CE Luzon Geothermal Power Company, Inc.+
Incorporated in the Philippines
Capital Stock: Owned 50% by CE Mahanagdong Ltd.;
50% by Kiewit Energy International (Bermuda) Ltd.;
an industrial company has the right to acquire 10%
of the equity - 5% from CE Mahanagdong Ltd. and 5%
from Kiewit Energy International (Bermuda) Ltd.
Himpurna California Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 47% by CE Indonesia Ltd.;
47% by Kiewit Energy International (Bermuda) Ltd.,
and 6% by P.T. Himpurna Enersindo Abadi; ("Himpurna").
Himpurna has assigned the right to certain preferred
dividends representing a 4% interest in Himpurna
California Energy Ltd., under the Joint Operating Contract,
Pertamina has certain rights to acquire up to a 25% interest
in the Joint Operating Contract, but not under the Energy
Sales Contract
Patuha Power, Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 50% by CE Singapore Ltd.,
and 50% by Kiewit Energy International (Bermuda)
Ltd.; under the Joint Operating Contract,
Pertamina has certain rights to acquire up
to a 25% interest in the Joint Operating Contract,
but not under the Energy Sales Agreement
Bali Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 50% by CE Bali Ltd. and
50% by Kiewit Energy International (Bermuda) Ltd.
P.T. Pandanwangi Sekartji has the right to acquire
up to 40% of the equity in Bali Energy Ltd.
Norming Investments BV+
Incorporated in the Netherlands
Capital Stock: Owned 50% by CE Asia Ltd. and
50% by Kiewit Energy International (Bermuda) Ltd.
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
BN Geothermal Inc.+
Incorporated in Delaware
Canejo Energy Company+
Incorporated in California
Niguel Energy Company+
Incorporated in California
San Felipe Energy Company+
Incorporated in California
CE/FS Holding Company, Inc.
Incorporated in Delaware
Falcon Seaboard Power Corporation
Incorporated in Texas
Falcon Seaboard Resources, Inc.
Incorporated in Texas
Falcon Seaboard Energy Corporation
Incorporated in Texas
Falcon Seaboard Gas Company
Incorporated in Texas
Falcon Seaboard Oil Company
Incorporated in Texas
Falcon Seaboard Pipeline Corporation
Incorporated in Texas
Big Spring Pipeline Company
Incorporated in Texas
Falcon Power Operating Company
Incorporated in Texas
Power Resources, Inc.+
Incorporated in Texas
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
North Country Gas Pipeline Corporation+
Incorporated in New York Owned
by Saranac Power Partners, L.P.
Saranac Energy Company, Inc. (SECI)+
Incorporated in Delaware
SECI Holdings, Inc.+
Incorporated in Delaware
Northern Consolidated Power, Inc. (NCPI)+
Incorporated in Delaware
NorCon Holdings, Inc.
Incorporated in Delaware
CE Electric, Inc.
Incorporated in Delaware
CE Power, Inc.
Incorporated in Delaware
CE Electric UK plc
Incorporated in England
Capital Stock: Owned 70% indirectly by CalEnergy Company, Inc. and
30% indirectly by Peter Kiewit Sons', Inc.
American Pacific Finance Company II
Incorporated in Delaware
Capital Stock: Owned 50% by CalEnergy Company, Inc. and
50% by Kiewit Energy Company
PT Kiewit Holt Indonesia
Incorporated in Indonesia
Owned by Kiewit/Holt Indonesia
Slupo I B.V.+
Incorporated in Netherlands
Owned 50% by CE Asia Ltd. and 50% by Kiewit
Energy International (Bermuda) Limited
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
Gilbert/CBE Indonesia L.L.C.
Organized in Nebraska
Owned 60% Gilbert Industrial Corporation and 40% CBE Engineering Co.
Northern Electric plc+
Incorporated in England and Wales
Northern Electric Generation (NPL) Ltd.
Incorporated in England and Wales
Northern Electric Supply Ltd.+
Incorporated in England and Wales
Northern Electric Share Scheme Trustee Ltd.+
Incorporated in England and Wales
Northern Transport Finance Ltd.+
Incorporated in England and Wales
Northern Electric Retail Ltd.+
Incorporated in England and Wales
Northern Electric Properties Ltd.+
Incorporated in England and Wales
Northern Electric Distribution Ltd.
Incorporated in England and Wales
Gas UK Ltd.+
Incorporated in England and Wales
Combined Power Systems (Northern) Ltd.+
Incorporated in England and Wales
Northern Electric (Overseas Holdings) Ltd.+
Incorporated in England and Wales
Northern Electric Generation (CPS) Ltd.+
Incorporated in England and Wales
Kings Road Developments Ltd.+
Incorporated in England and Wales
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
Ryhope Road Developments Ltd.+
Incorporated in England and Wales
Stamfordham Road Developments Ltd.+
Incorporated in England and Wales
Northern Electric Generation (TPL) Ltd.+
Incorporated in England and Wales
Northern Electric Generation Ltd.+
Incorporated in England and Wales
Northern Electric Insurance Services Ltd.+
Incorporated in England and Wales
Northern Metering Services Ltd.+
Incorporated in Isle of Man
Sovereign Exploration Ltd.+
Incorporated in England and Wales
Northern Electric Generation (Peaking) Ltd.+
Incorporated in England and Wales
Northern Electric Training Ltd.+
Incorporated in England and Wales
Northern Electric Transport Ltd.+
Incorporated in England and Wales
Northern information Systems Ltd.+
Incorporated in England and Wales
Northern Utility Services Ltd.+
Incorporated in England and Wales
Viking Power Ltd.+
Incorporated in England and Wales
Northern electric Finance plc.+
Incorporated in England and Wales
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
Northgas Ltd.+
Incorporated in England and Wales
Northern Tracing & Collection Services Ltd.+
Incorporated in England and Wales
Northern Electric Telecom Ltd.+
Incorporated in England and Wales
CE Electric UK Holdings
Incorporated in England
Capital Stock: Owned 70% indirectly by CalEnergy Company, Inc. and
30% indirectly by Peter Kiewit Sons', Inc.
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement or regulatory
restrictions or otherwise encumbered and subject to foreclosure or other
exercise of remedies.
<PAGE>
SCHEDULE C
----------
Joint Ventures
--------------
Coso Energy Developers (CED)+
Formed in California
General Partnership: 48% CHIP; 52% Caithness Coso
Holdings, L.P.
Coso Finance Partners+
Formed in California
General Partnership: 46.3% owned by CLOC; 53.7%
owned by ESCA I, L.P.
Coso Power Developers (CPD)+
Formed in California
General Partnership: 50% owned by CTC; 50% by
Caithness Navy II
Coso Transmission Line Partners+
Formed in California
General Partnership: Owned 50% by CED; 50% by CPD
Vulcan/BN Geothermal Power Company+
Formed in Nevada
Partnership Interests: Vulcan Power Company 50%
General Partner; BN Geothermal, Inc. 50% General
Partner
Del Ranch, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
Conejo Energy Company 10% Limited Partner and 40% General Partner
Elmore, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
Niguel Energy Company 10% Limited Partner
and 40% General Partner
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement, or otherwise
encumbered and subject to foreclosure or other exercise of remedies.
<PAGE>
Leathers, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
San Felipe Energy Company 10% Limited Partner and 40% General Partner
Salton Sea Brine Processing L.P.+
Limited Partnership Formed in California
Salton Sea Power Generation L.P.+
Limited Partnership Formed in California
Visayas Geothermal Power Company+
Partnership Formed in the Philippines
Yuma Cogeneration Associates (YCA)+
Formed in Utah
Alto Peak Power Company
Formed in the Philippines
China Lake Joint Venture
Formed in California
Owed 50% by CalEnergy Company and
50% by Caithness Geothermal 1980 Ltd.
Coso Finance Partners II
Formed in California
Owned 50% by China Lake Geothermal Management Co., an affiliate of
Calenergy Company, Inc. and 50% by ESCA II, L.P.
Coso Land Company
Formed in California
Owned 50% by CalEnergy Company and 50% by Caithness Geothermal 1980
Ltd.
Gilbert/CBE L.P.
Limited partnership formed in Nebraska
Partnership Interests: 20% CBE Engineering Co. and 80% Gilbert
Industrial Corporation
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement, or otherwise
encumbered and subject to foreclosure or other exercise of remedies.
<PAGE>
Kiewit/Holt Philippines, L.P.
Limited partnership formed in Nebraska
Partnership Interests: 20% CE Holt Company and 80% Kiewit
Industrial Co.
Saranac Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Saranac Energy Company, Inc. and 20%
affiliates of Tomen Power Corporation
NorCon Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Northern Consolidated Power, Inc. and 20%
affiliates of Tomen Power Corporation
- --------------
+ Indicates stock or partnership interests that are and at the Closing Date
will continue to be pledged, subject to a purchase agreement, or otherwise
encumbered and subject to foreclosure or other exercise of remedies.
<PAGE>
CALENERGY COMPANY, INC.
Indenture
Dated as of __________
Senior Debt Securities
IBJ Schroder Bank & Trust Company
Trustee
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
PARTIES ..................................................................................................1
RECITALS ..................................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION....................................................................................1
SECTION 101. Definitions.......................................................................1
Acquired Debt..............................................................................2
Acquisition Debt...........................................................................2
Adjusted Consolidated Net Income...........................................................3
Affiliate..................................................................................3
Asset Acquisition..........................................................................4
Asset Disposition..........................................................................4
Asset Sale.................................................................................6
Attributable Value.........................................................................6
Authenticating Agent.......................................................................6
Average Life...............................................................................6
Board of Directors.........................................................................6
Board Resolution...........................................................................6
Business Day...............................................................................6
Capital Stock..............................................................................6
Capitalized Lease..........................................................................7
Cash Equivalent............................................................................7
Certificated...............................................................................8
Change of Control..........................................................................8
Common Stock...............................................................................9
Company....................................................................................9
Company Refinancing Debt...................................................................9
Company Request...........................................................................10
Company Order.............................................................................10
Consolidated EBITDA.......................................................................10
Consolidated Fixed Charges................................................................11
Consolidated Interest Expense.............................................................11
Construction Financing....................................................................12
Corporate Trust Office....................................................................12
Currency Protection Agreement.............................................................12
Debt......................................................................................12
Default...................................................................................13
Default Amount............................................................................13
Depositary................................................................................13
Disinterested Director....................................................................13
Eligible Joint Venture....................................................................14
Exchange Act..............................................................................14
Fixed Charge Ratio........................................................................14
Foreign Asset Disposition.................................................................15
GAAP......................................................................................16
Global Security...........................................................................16
Guarantee.................................................................................16
Holder....................................................................................16
i
<PAGE>
Holder of Securities......................................................................16
Incur.....................................................................................16
Indenture.................................................................................17
Interest Payment Date.....................................................................17
Interest Rate Protection Agreement........................................................17
Internal Revenue Code.....................................................................17
Investment................................................................................17
Investment Grade..........................................................................17
Issue Date................................................................................17
Joint Venture.............................................................................17
Kiewit....................................................................................17
Lien......................................................................................17
Moody's...................................................................................18
Net Cash Proceeds.........................................................................18
Net Income................................................................................18
Net Worth.................................................................................19
Non-Recourse..............................................................................19
Offer to Purchase.........................................................................19
Officers' Certificate.....................................................................19
Opinion of Counsel........................................................................20
Outstanding...............................................................................20
Paying Agent..............................................................................21
Permitted Facility........................................................................21
Permitted Facilities Debt.................................................................21
Permitted Funding Company Loans...........................................................21
Permitted Investment......................................................................22
Permitted Joint Venture...................................................................23
Permitted Payments........................................................................24
Permitted Working Capital Facilities......................................................25
Person....................................................................................25
Predecessor Security......................................................................25
Preferred Stock...........................................................................26
Property..................................................................................26
Purchase Date.............................................................................26
Purchase Money Debt.......................................................................26
Rating Agencies...........................................................................26
Rating Category...........................................................................26
Rating Decline............................................................................26
Redeemable Stock..........................................................................27
Redemption Date...........................................................................27
Redemption Price..........................................................................27
Reference Period..........................................................................27
Regular Record Date.......................................................................27
Responsible Officer.......................................................................27
Restricted Payment........................................................................28
Restricted Subsidiary.....................................................................28
S&P.......................................................................................28
Securities................................................................................28
Securities Act............................................................................28
Senior Debt...............................................................................29
Significant Subsidiary....................................................................29
Special Record Date.......................................................................29
Stated Maturity...........................................................................29
Subsidiary................................................................................29
ii
<PAGE>
Subsidiary Refinancing Debt...............................................................29
Trade Payables............................................................................30
Trustee...................................................................................30
Trust Indenture Act.......................................................................30
Unrestricted Subsidiary...................................................................30
U.S. Government Obligations...............................................................31
Vice President............................................................................31
Voting Stock..............................................................................31
SECTION 102. Compliance Certificates and Opinions................................................32
SECTION 103. Form of Documents Delivered to Trustee..............................................32
SECTION 104. Acts of Holders; Record Dates.......................................................33
SECTION 105. Notices, Etc., to Trustee and Company...............................................36
SECTION 106. Notice to Holders; Waiver...........................................................36
SECTION 107. Conflict with Trust Indenture Act...................................................36
SECTION 108. Effect of Headings and Table of Contents............................................37
SECTION 109. Successors and Assigns..............................................................37
SECTION 110. Separability Clause.................................................................37
SECTION 111. Benefits of Indenture...............................................................37
SECTION 112. Governing Law ......................................................................37
SECTION 113. Legal Holidays......................................................................38
SECTION 114. No Recourse Against Others..........................................................38
SECTION 115. Duplicate Originals.................................................................38
ARTICLE TWO THE SECURITIES..................................................................................38
SECTION 201. Global and Certificated Securities..................................................38
SECTION 202. Form of Trustee's Certificate of Authentication.....................................41
ARTICLE THREE THE SECURITIES...............................................................................41
ARTICLE THREE THE SECURITIES................................................................................41
SECTION 301. Amount Unlimited; Issuable in Series................................................41
SECTION 302. Denominations ......................................................................44
SECTION 303. Execution and Authentication........................................................44
SECTION 304. Registrar and Paying Agent..........................................................46
SECTION 305. Paying Agent To Hold Money in Trust.................................................47
SECTION 306. Holder Lists ......................................................................47
SECTION 307. Transfer and Exchange of Global Securities..........................................47
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities....................................50
SECTION 309. Temporary Securities and Certificated Securities....................................51
SECTION 310. Payment of Interest; Interest Rights Preserved......................................52
SECTION 311. Persons Deemed Owners...............................................................53
SECTION 312. Cancellation ......................................................................53
SECTION 313. Computation of Interest.............................................................54
ARTICLE FOUR SATISFACTION AND DISCHARGE.....................................................................54
iii
<PAGE>
SECTION 401. Satisfaction and Discharge of Indenture.............................................54
ARTICLE FIVE REMEDIES.......................................................................................55
SECTION 501. Events of Default...................................................................55
SECTION 502. Acceleration of Maturity; Rescission and Annulment..................................57
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.....................58
SECTION 504. Trustee May File Proofs of Claim....................................................59
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.........................60
SECTION 506. Application of Money Collected......................................................60
SECTION 507. Limitation on Suits.................................................................61
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest...........62
SECTION 509. Restoration of Rights and Remedies..................................................62
SECTION 510. Rights and Remedies Cumulative......................................................62
SECTION 511. Delay or Omission Not Waiver........................................................62
SECTION 512. Control by Holders..................................................................62
SECTION 513. Waiver of Past Defaults.............................................................63
SECTION 514. Undertaking for Costs...............................................................63
SECTION 515. Waiver of Stay or Extension Laws....................................................63
ARTICLE SIX THE TRUSTEE....................................................................................64
SECTION 601. Certain Duties and Responsibilities.................................................64
SECTION 602. Notice of Defaults; Notice of Acceleration..........................................65
SECTION 603. Certain Rights of Trustee...........................................................65
SECTION 604. Not Responsible for Recitals or Issuance of Securities..............................66
SECTION 605. May Hold Securities.................................................................67
SECTION 606. Money Held in Trust.................................................................67
SECTION 607. Compensation and Reimbursement......................................................67
SECTION 608. Conflicting Interests...............................................................68
SECTION 609. Corporate Trustee Required; Eligibility.............................................68
SECTION 610. Resignation and Removal; Appointment of Successor...................................68
SECTION 611. Acceptance of Appointment by Successor..............................................70
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.........................71
SECTION 613. Preferential Collection of Claims Against Company...................................71
SECTION 614. Appointment of Authenticating Agent.................................................72
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............................................73
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders...........................74
iv
<PAGE>
SECTION 702. Preservation of Information; Communications to Holders..............................74
SECTION 703. Reports by Trustee..................................................................74
SECTION 704. Reports by Company..................................................................75
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.........................................75
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.................................75
SECTION 802. Successor Substituted...............................................................76
ARTICLE NINE SUPPLEMENTAL INDENTURES.......................................................................77
SECTION 901. Supplemental Indentures Without Consent of Holders..................................77
SECTION 902. Supplemental Indentures with Consent of Holders.....................................78
SECTION 903. Execution of Supplemental Indentures................................................80
SECTION 904. Effect of Supplemental Indentures...................................................80
SECTION 905. Conformity with Trust Indenture Act.................................................80
SECTION 906. Reference in Securities to Supplemental Indentures..................................80
ARTICLE TEN COVENANTS......................................................................................80
SECTION 1001. Payment of Principal, Premium and Interest.........................................81
SECTION 1002. Maintenance of Office or Agency....................................................81
SECTION 1003. Money for Security Payments to be Held in Trust....................................81
SECTION 1004. Existence ......................................................................83
SECTION 1005. Maintenance of Properties..........................................................83
SECTION 1006. Payment of Taxes and Other Claims..................................................83
SECTION 1007. Maintenance of Insurance...........................................................83
SECTION 1008. Limitation on Debt.................................................................84
SECTION 1009. Limitation on Subsidiary Debt......................................................85
SECTION 1010. Limitation on Restricted Payments..................................................86
SECTION 1011. Limitation on Transactions with Affiliates.........................................88
SECTION 1012. Limitation on Liens................................................................88
SECTION 1013. Purchase of Securities Upon a Change of Control....................................90
SECTION 1014. Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries......91
SECTION 1015. Limitation on Dispositions.........................................................93
SECTION 1016. Limitation on Certain Sale-Leasebacks..............................................96
SECTION 1017. Provision of Financial Information.................................................97
SECTION 1018. Limitation on Sale of Subsidiary Preferred Stock...................................97
SECTION 1019. Statement by Officers as to Default; Compliance Certificates.......................98
SECTION 1020. Waiver of Certain Covenants........................................................99
v
<PAGE>
SECTION 1021. Limitation on Business.............................................................99
ARTICLE ELEVEN REDEMPTION OF SECURITIES...................................................................100
SECTION 1101. Right of Redemption...............................................................100
SECTION 1102. Applicability of Article..........................................................100
SECTION 1103. Election to Redeem; Notice to Trustee.............................................100
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.................................100
SECTION 1105. Notice of Redemption..............................................................101
SECTION 1106. Deposit of Redemption Price.......................................................101
SECTION 1107. Securities Payable on Redemption Date.............................................101
SECTION 1108. Securities Redeemed in Part.......................................................102
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE.........................................................102
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance......................102
SECTION 1202. Defeasance and Discharge..........................................................102
SECTION 1203. Covenant Defeasance...............................................................103
SECTION 1204. Conditions to Defeasance or Covenant Defeasance...................................104
SECTION 1205. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous
Provisions......................................................................106
SECTION 1206. Reinstatement.....................................................................107
</TABLE>
vi
<PAGE>
INDENTURE, dated as of ____________, between CalEnergy
Company, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office
at 302 South Thirty-Sixth Street, Suite 400, Omaha, Nebraska 68131, and IBJ
Schroder Bank & Trust Company, a New York banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time
for its lawful purposes senior debt securities (hereinafter called the
"Securities") evidencing its unsecured and unsubordinated indebtedness, and
has duly authorized the execution and delivery of this Indenture to provide
for the issuance from time to time of the Securities, unlimited as to
principal amount, to bear interest at the rate or pursuant to the formula, to
mature at such times and to have such other provisions as shall be fixed as
hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are deemed to be incorporated into
this Indenture and shall, to the extent applicable, be governed by such
provisions.
All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein, have
the meanings assigned to them therein;
<PAGE>
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP (whether or not
such is indicated herein);
(4) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or Section, as the
case may be, of this Indenture;
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(6) "or" is not exclusive;
(7) provisions apply to successive events and transactions;
and
(8) each reference herein to a rule or form of the
Commission shall mean such rule or form and any rule or form
successor thereto, in each case as amended from time to time.
Whenever this Indenture requires that a particular ratio or
amount be calculated with respect to a specified period after giving effect to
certain transactions or events on a pro forma basis, such calculation shall be
made as if the transactions or events occurred on the first day of such
period, unless otherwise specified.
"Acquired Debt" means Debt Incurred by a Person prior to the
time (i) such Person becomes a Restricted Subsidiary of the Company or an
Eligible Joint Venture, (ii) such Person merges with or into a Restricted
Subsidiary of the Company or an Eligible Joint Venture, or (iii) a Restricted
Subsidiary of the Company or an Eligible Joint Venture merges with or into
such Person (in a transaction in which such Person becomes a Restricted
Subsidiary of the Company or an Eligible Joint Venture), provided that, after
giving effect to such transaction, any Non-Recourse Debt of such Person could
have been Incurred pursuant to clause (iii) of Section 1009(b), any Permitted
Facilities Debt of such Person could have been Incurred pursuant to clause
(viii) of Section 1009(b) and would not otherwise violate any other provision
of this Indenture, and all the other Debt of such Person could have been
Incurred by the Company at the time of such merger or acquisition pursuant to
the provision described in Section 1008(a), and provided further that such
Debt was not Incurred in connection with, or in contemplation of, such merger
or such Person becoming a Restricted Subsidiary of the Company or an Eligible
Joint Venture.
"Acquisition Debt" means Debt of any Person existing at the
time such Person is merged into the Company or assumed in connection with the
acquisition of Property from any such Person
2
<PAGE>
(other than Property acquired in the ordinary course of business), including
Debt Incurred in connection with, or in contemplation of, such Person being
merged into the Company (but excluding Debt of such Person that is
extinguished, retired or repaid in connection with such merger or
acquisition).
"Adjusted Consolidated Net Income" means for any period, for
any Person (the "Referenced Person") the aggregate Net Income (or loss) of the
Referenced Person and its consolidated Subsidiaries for such period determined
in conformity with GAAP, provided that the following items shall be excluded
in computing Adjusted Consolidated Net Income (without duplication): (i) the
Net Income (or loss) of any other Person (other than a Subsidiary of the
Referenced Person) in which any third Person has an interest, except to the
extent of the amount of dividends or other distributions actually paid in cash
to the Referenced Person during such period, or after such period and on or
before the date of determination, by such Person in which the interest is
held, which dividends and distributions shall be included in such computation,
(ii) solely for the purposes of calculating the amount of Restricted Payments
that may be made pursuant to the provision described in clause (c) of Section
1010(a) (and in such case, except to the extent includable pursuant to clause
(i) above), the Net Income (if positive) of any other Person accrued prior to
the date it becomes a Subsidiary of the Referenced Person or is merged into or
consolidated with the Referenced Person or any of its Subsidiaries or all or
substantially all the Property of such other Person is acquired by the
Referenced Person or any of its Subsidiaries, (iii) the Net Income (if
positive) of any Subsidiary of the Referenced Person, to the extent that the
declaration or payment of dividends or similar distributions by the Subsidiary
to such Person or to any other Subsidiary of such Net Income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to the Subsidiary, (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales (except, solely for the purposes of calculating
the amount of Restricted Payments that may be made pursuant to the provision
described in clause (c) of Section 1010(a), any gains or losses of the Company
and any of its Restricted Subsidiaries from Asset Sales of Capital Stock of
Unrestricted Subsidiaries), (v) the cumulative effect of a change in
accounting principles and (vi) any amounts paid or accrued as dividends on
Preferred Stock of any Subsidiary of the Referenced Person that is not held by
the Referenced Person or another Subsidiary thereof. When the "Referenced
Person" is the Company, the foregoing references to "Subsidiaries" shall be
deemed to refer to "Restricted Subsidiaries."
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
(including, with
3
<PAGE>
correlative meanings, the terms "controlling", "controlled by" and "under
common control with") when used with respect to any Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For the purpose of
Section 1011, the term "Affiliate" includes only Kiewit, any entity
beneficially owning 10% or more of the Voting Stock of the Company and their
respective Affiliates other than the Restricted Subsidiaries and the Eligible
Joint Ventures and the other equity investors in the Restricted Subsidiaries
and the Eligible Joint Ventures (solely on account of their investments in the
Restricted Subsidiaries and the Eligible Joint Ventures), and for such purpose
such term also includes the Unrestricted Subsidiaries.
"Asset Acquisition" means (i) an investment by the Company,
any of its Subsidiaries or any Joint Venture in any other Person pursuant to
which such Person shall become a direct or indirect Subsidiary of the Company
or a Joint Venture or shall be merged into or consolidated with the Company,
any of its Subsidiaries or any Joint Venture or (ii) an acquisition by the
Company, any of its Subsidiaries or any Joint Venture of the Property of any
Person other than the Company, any of its Subsidiaries or any Joint Venture
that constitutes substantially all of an operating unit or business of such
Person.
"Asset Disposition" means any sale, transfer, conveyance,
lease or other disposition (including by way of merger, consolidation or
sale-leaseback) by the Company, any of its Restricted Subsidiaries or any
Eligible Joint Venture to any Person (other than to the Company, a Restricted
Subsidiary of the Company or an Eligible Joint Venture and other than in the
ordinary course of business) of any Property of the Company, any of its
Restricted Subsidiaries or any Eligible Joint Venture other than any shares of
Capital Stock of the Unrestricted Subsidiaries. Notwithstanding the foregoing
to the contrary, the term "Asset Disposition" shall include the sale,
transfer, conveyance or other disposition of any shares of Capital Stock of
any Unrestricted Subsidiary to the extent that the Company or any of its
Restricted Subsidiaries or Eligible Joint Ventures made an Investment in such
Unrestricted Subsidiary pursuant to clause (vii) of the definition of
"Permitted Payment," and the Company shall, and shall cause each of its
Restricted Subsidiaries and Eligible Joint Ventures to, apply pursuant to
Section 1015 that portion of the Net Cash Proceeds from the sale, transfer,
conveyance or other disposition of such Unrestricted Subsidiary that is equal
to the portion of the total Investment in such Unrestricted Subsidiary that is
represented by the Investment that was made pursuant to clause (vii) of the
definition of "Permitted Payment." For purposes of this definition, any
disposition in connection with directors' qualifying shares or investments by
foreign nationals mandated by applicable law shall not constitute an Asset
Disposition. In addition, the term
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"Asset Disposition" shall not include (i) any sale, transfer, conveyance,
lease or other disposition of the Capital Stock or Property of Restricted
Subsidiaries or Eligible Joint Ventures pursuant to the terms of any power
sales agreements or steam sales agreements to which such Restricted
Subsidiaries or such Eligible Joint Ventures are parties on the Issue Date of
the Securities or pursuant to the terms of any power sales agreements or steam
sales agreements, or other agreements or contracts that are related to the
output or product of, or services rendered by, a Permitted Facility as to
which such Restricted Subsidiary or such Eligible Joint Venture is the
supplying party, to which such Restricted Subsidiaries or such Eligible Joint
Ventures become a party after such date if the President or Chief Financial
Officer of the Company determines in good faith (evidenced by an Officers'
Certificate) that such provisions are customary (or, in the absence of any
industry custom, reasonably necessary) in order to effect such agreements and
are reasonable in light of comparable transactions in the applicable
jurisdiction, (ii) any sale, transfer, conveyance, lease or other disposition
of Property governed by Section 801, (iii) any sale, transfer, conveyance,
lease or other disposition of any Cash Equivalents, (iv) any transaction or
series of related transactions consisting of the sale, transfer, conveyance,
lease or other disposition of Capital Stock or Property with a fair market
value aggregating less than $5 million and (v) any Permitted Payment or any
Restricted Payment that is permitted to be made pursuant to Section 1010. The
term "Asset Disposition" also shall not include (i) the grant of or
realization upon a Lien permitted under Section 1012 or the exercise of
remedies thereunder, (ii) a sale-leaseback transaction involving substantially
all the Property constituting a Permitted Facility pursuant to which a
Restricted Subsidiary of the Company or an Eligible Joint Venture sells the
Permitted Facility to a Person in exchange for the assumption by that Person
of the Debt financing the Permitted Facility and the Restricted Subsidiary or
the Eligible Joint Venture leases the Permitted Facility from such Person,
(iii) dispositions of Capital Stock, contract rights, development rights and
resource data made in connection with the initial development of Permitted
Facilities, or the formation or capitalization of Restricted Subsidiaries or
Eligible Joint Ventures in respect of the initial development of Permitted
Facilities, in respect of which only an insubstantial portion of the
prospective Construction Financing that would be required to commence
commercial operation has been funded or (iv) transactions determined in good
faith by the Chief Financial Officer, as evidenced by an Officers'
Certificate, made in order to enhance the repatriation of the Net Cash
Proceeds for a Foreign Asset Disposition or in order to increase the after-tax
proceeds thereof available for immediate distribution to the Company. Any
Asset Disposition that results from the bona fide exercise by any governmental
authority of its claimed or actual power of eminent domain need not comply
with the provisions of clauses (i) and (ii) of Section 1015(a). Any Asset
Disposition
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that results from a casualty loss need not comply with the provisions of
clause (i) of Section 1015(a).
"Asset Sale" means the sale or other disposition by the
Company, any of its Subsidiaries or any Joint Venture (other than to the
Company, another Subsidiary of the Company or another Joint Venture) of (i)
all or substantially all of the Capital Stock of any Subsidiary of the Company
or any Joint Venture or (ii) all or substantially all of the Property that
constitutes an operating unit or business of the Company, any of its
Subsidiaries or any Joint Venture.
"Attributable Value" means, as to a Capitalized Lease
Obligation under which any Person is at the time liable and at any date as of
which the amount thereof is to be determined, the capitalized amount thereof
that would appear on the face of a balance sheet of such Person in accordance
with GAAP.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 hereof to act on behalf of the Trustee to
authenticate Securities.
"Average Life" means, at any date of determination with
respect to any Debt security or Preferred Stock, the quotient obtained by
dividing (i) the sum of the product of (A) the number of years from such date
of determination to the dates of each successive scheduled principal or
involuntary liquidation value payment of such Debt security or Preferred
Stock, respectively, multiplied by (B) the amount of such principal or
involuntary liquidation value payment by (ii) the sum of all such principal or
involuntary liquidation value payments.
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee of such Board.
"Board Resolution" means 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 (unless the context specifically requires
that such resolution be adopted by a majority of the Disinterested Directors,
in which case by a majority of such directors) and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"Business Day" means a day that, in the city (or in any of
the cities, if more than one) where amounts are payable in respect of the
Securities, is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) in, or
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interests (however designated) in, the equity of such Person that is
outstanding or issued on or after the date of Indenture, including, without
limitation, all Common Stock and Preferred Stock and partnership and joint
venture interests in such Person.
"Capitalized Lease" means, as applied to any Person, any
lease of any Property of which the discounted present value of the rental
obligations of such Person as lessee, in conformity with GAAP, is required to
be capitalized on the balance sheet of such Person, and "Capitalized Lease
Obligation" means the rental obligations, as aforesaid, under such lease.
"Cash Equivalent" means any of the following: (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof),
(ii) time deposits and certificates of deposit of any commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000 or any commercial bank organized under the laws of any other
country having total assets in excess of $500,000,000 with a maturity date not
more than two years from the date of acquisition, (iii) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clauses (i) or (v) that were entered into with any bank meeting
the qualifications set forth in clause (ii) or another financial institution
of national reputation, (iv) direct obligations issued by any state or other
jurisdiction of the United States of America or any other country or any
political subdivision or public instrumentality thereof maturing, or subject
to tender at the option of the holder thereof, within 90 days after the date
of acquisition thereof and, at the time of acquisition, having a rating of A
from S&P or A-2 from Moody's (or, if at any time neither S&P nor Moody's may
be rating such obligations, then from another nationally recognized rating
service acceptable to the Trustee), (v) commercial paper issued by (a) the
parent corporation of any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 or any commercial bank
organized under the laws of any other country having total assets in excess of
$500,000,000, and (b) others having one of the two highest ratings obtainable
from either S&P or Moody's (or, if at any time neither S&P nor Moody's may be
rating such obligations, then from another nationally recognized rating
service acceptable to the Trustee) and in each case maturing within one year
after the date of acquisition, (vi) overnight bank deposits and bankers'
acceptances at any commercial bank organized in the United States having
capital and surplus in excess of $500,000,000 or any commercial bank organized
under the laws of any other country having total assets in excess of
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$500,000,000, (vii) deposits available for withdrawal on demand with any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or any commercial bank organized under the laws of any
other country having total assets in excess of $500,000,000, (viii)
investments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vi) and (ix), and
(ix) auction rate securities or money market preferred stock having one of the
two highest ratings obtainable from either S&P or Moody's (or, if at any time
neither S&P nor Moody's may be rating such obligations, then from another
nationally recognized rating service acceptable to the Trustee).
"Certificated" means any Security which is not a Global
Security.
"Change of Control" means the occurrence of one or more of
the following events:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than Kiewit, is or becomes the
beneficial owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company (for the purposes of
this clause (i), any person shall be deemed to beneficially own any
Voting Stock of any corporation (the "specified corporation") held by
any other corporation (the "parent corporation"), if such person
"beneficially owns" (as so defined), directly or indirectly, more than
35% of the voting power of the Voting Stock of such parent corporation)
and Kiewit "beneficially owns" (as so defined), directly or indirectly,
in the aggregate a lesser percentage of the voting power of the
Voting Stock of the Company and does not have the right or ability by
voting power, contract
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or otherwise to elect or designate for election a majority of the
board of directors of the Company;
(ii) during any one-year period, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors elected by such Board of
Directors or nominated for election by the shareholders of the
Company by a vote of at least a majority of the directors of the
Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office, unless a majority
of such new directors were elected or appointed by Kiewit; or
(iii) the Company or its Restricted Subsidiaries sell,
convey, assign, transfer, lease or otherwise dispose of all or
substantially all the Property of the Company and the Restricted
Subsidiaries taken as a whole;
provided that with respect to the foregoing subparagraphs (i), (ii) and (iii),
a Change of Control shall not be deemed to have occurred unless and until a
Rating Decline has occurred as well.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means with respect to any Person, Capital
Stock of such Person that does not rank prior, as to the payment of dividends
or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
"Company Refinancing Debt" means Debt issued in exchange
for, or the proceeds of which are used to refinance (including to purchase),
outstanding Securities or other Debt of the Company Incurred pursuant to
clauses (i), (iv), and (vii) of Section 1008(b) and Debt Incurred pursuant to
Section 1008(a) in an amount (or, if such new Debt provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, with an original issue price) not to exceed the amount
so exchanged or refinanced (plus accrued interest and all fees, premiums (in
excess of the accreted value) and expenses related to such exchange or
refinancing), for which purpose the amount so exchanged or refinanced shall be
deemed to equal the lesser of (x) the
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principal amount of the Debt so exchanged or refinanced and (y) if the Debt
being exchanged or refinanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with GAAP) at the time of
such exchange or refinancing, provided that (A) such Debt shall be
subordinated in right of payment to the Securities at least to the same
extent, if any, as the Debt so exchanged or refinanced is subordinated to the
Securities, (B) such Debt shall be Non-Recourse if the Debt so exchanged or
refinanced is Non-Recourse, (C) the Average Life of the new Debt shall be
equal to or greater than the Average Life of the Debt to be exchanged or
refinanced and (D) the final Stated Maturity of the new Debt shall not be
sooner than the earlier of the final Stated Maturity of the Debt to be
exchanged or refinanced or six months after the final Stated Maturity of the
Securities, provided that if such new Debt refinances the Securities in part
only, the final Stated Maturity of such new Debt must be at least six months
after the final Stated Maturity of the Securities.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated EBITDA" of any Person for any period means the
Adjusted Consolidated Net Income of such Person, plus, only to the extent
deducted in computing Adjusted Consolidated Net Income and without
duplication, (i) income taxes, excluding income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
Asset Sales, all determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, (ii) Consolidated Fixed
Charges, (iii) depreciation and amortization expense, all determined on a
consolidated basis for such Person and its consolidated Subsidiaries in
accordance with GAAP and (iv) all other non-cash items reducing Adjusted
Consolidated Net Income for such period, all determined on a consolidated
basis for such Person and its consolidated Subsidiaries in accordance with
GAAP, and less all non-cash items increasing Adjusted Consolidated Net Income
during such period, provided that depreciation and amortization expense of any
Subsidiary of such Person and any other non-cash item of any Subsidiary of
such Person that reduces Adjusted Consolidated Net Income shall be excluded
(without duplication) in computing Consolidated EBITDA, except to the extent
that the positive cash flow associated with such depreciation and amortization
expense and other non-cash items is actually distributed in cash to such
Person during such period, provided further that as applied to the Company,
cash in respect of depreciation and amortization and other non-cash items of
Restricted Subsidiaries and Eligible Joint
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Ventures may be deemed to have been distributed or paid to the Company to the
extent that such cash (I) is or was under the exclusive dominion and control
of such Restricted Subsidiary or such Eligible Joint Venture and is free and
clear of the Lien of any other Person, (II) is immediately available for
distribution and (III) could be or could have been repatriated to the United
States by means that are both lawful and commercially reasonable, provided
that the amount of the cash deemed by this sentence to have been distributed
or paid shall be reduced by the amount of tax that would have been payable
with respect to the repatriation thereof, provided further that any cash that
enables the recognition of depreciation and amortization and other non-cash
items pursuant to this sentence may not be used to enable the recognition of
depreciation and amortization and other non-cash items with respect to any
prior or subsequent period, regardless of whether such cash is distributed to
the Company, and provided further that the recognition of any depreciation and
amortization and other non-cash items as a result of this sentence shall be
determined in good faith by the Chief Financial Officer, as evidenced by an
Officers' Certificate that shall set forth in reasonable detail the relevant
facts and assumptions supporting such recognition. When the "Person" referred
to above is the Company, the foregoing references to "Subsidiaries" shall be
deemed to refer to "Restricted Subsidiaries."
"Consolidated Fixed Charges" of any Person means, for any
period, the aggregate of (i) Consolidated Interest Expense, (ii) the interest
component of Capitalized Leases, determined on a consolidated basis for such
Person and its consolidated Subsidiaries in accordance with GAAP, excluding
any interest component of Capitalized Leases in respect of that portion of a
Capitalized Lease Obligation of a Subsidiary that is Non-Recourse to such
Person, and (iii) cash and non-cash dividends due (whether or not declared) on
the Preferred Stock of any Subsidiary of such Person held by any Person other
than such Person and any Redeemable Stock of such Person or any Subsidiary of
such Person. When the "Person" referred to above is the Company, the foregoing
references to "Subsidiaries" shall be deemed to refer to "Restricted
Subsidiaries."
"Consolidated Interest Expense" of any Person means, for any
period, the aggregate interest expense in respect of Debt (including
amortization of original issue discount and non-cash interest payments or
accruals) of such Person and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, including all commissions,
discounts, other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs associated with Interest Rate
Protection Agreements and Currency Protection Agreements and any amounts paid
during such period in respect of such interest expense, commissions,
discounts, other fees and charges that have been capitalized, provided that
Consolidated Interest Expense of the Company shall not include any interest
expense (including all commissions, discounts, other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements or Currency
Protection Agreements) in
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respect of that portion of any Debt that is Non-Recourse, and provided further
that Consolidated Interest Expense of the Company in respect of a Guarantee by
the Company of Debt of another Person shall be equal to the commissions,
discounts, other fees and charges that would be due with respect to a
hypothetical letter of credit issued under a bank credit agreement that can be
drawn by the beneficiary thereof in the amount of the Debt so guaranteed if
(i) the Company is not actually making directly or indirectly interest
payments on such Debt and (ii) GAAP does not require the Company on an
unconsolidated basis to record such Debt as a liability of the Company. When
the "Person" referred to above is the Company, the foregoing references to
"Subsidiaries" shall be deemed to refer to "Restricted Subsidiaries."
"Construction Financing" means the debt and/or equity
financing provided (over and above the owners' equity investment) to permit
the acquisition, development, design, engineering, procurement, construction
and equipping of a Permitted Facility and to enable it to commence commercial
operations, provided that Construction Financing may remain outstanding after
the commencement of commercial operations of a Permitted Facility, without any
increase in the amount of such financing, and such Construction Financing
shall not cease to be Construction Financing.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which address as of the date of this Indenture is located at 101
Barclay Street, Floor 21 West, New York, New York 10286.
"Currency Protection Agreement" means, with respect to any
Person, any foreign exchange contract, currency swap agreement or other
similar agreement or arrangement intended to protect such Person against
fluctuations in currency values to or under which such Person is a party or a
beneficiary on the date of this Indenture or becomes a party or a beneficiary
thereafter.
"Debt" means, with respect to any Person, at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit, bankers' acceptances, surety, bid,
operating and performance bonds, performance guarantees or other similar
instruments or obligations (or reimbursement obligations with respect thereto)
(except, in each case, to the extent incurred in the ordinary course of
business), (iv) all obligations of such Person to pay the deferred purchase
price of property or services, except Trade Payables, (v) the Attributable
Value of all obligations of such Person as lessee under Capitalized Leases,
(vi) all Debt of others secured by a Lien on any Property of such Person,
whether or not such Debt is assumed by such
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Person, provided that, for purposes of determining the amount of any Debt of
the type described in this clause, if recourse with respect to such Debt is
limited to such Property, the amount of such Debt shall be limited to the
lesser of the fair market value of such Property or the amount of such Debt,
(vii) all Debt of others Guaranteed by such Person to the extent such Debt is
Guaranteed by such Person, (viii) all Redeemable Stock valued at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends and (ix) to the extent not otherwise included in this definition,
all net obligations of such Person under Currency Protection Agreements and
Interest Rate Protection Agreements.
For purposes of determining any particular amount of Debt
that is or would be outstanding, Guarantees of, or obligations with respect to
letters of credit or similar instruments supporting (to the extent the
foregoing constitutes Debt), Debt otherwise included in the determination of
such particular amount shall not be included. For purposes of determining
compliance with this Indenture, in the event that an item of Debt meets the
criteria of more than one of the types of Debt described in the above clauses,
the Company, in its sole discretion, shall classify such item of Debt and only
be required to include the amount and type of such Debt in one of such
clauses.
"Default" means any event that is, or after notice or
passage of time, or both, would be, an Event of Default.
"Default Amount" means the principal amount plus accrued
interest.
"Depositary" means the Person designated as Depositary by
the Company pursuant to Section 201(a) until a successor depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder. For purposes of this Indenture, unless otherwise
specified pursuant to Section 201(a), any such Depositary shall, at the time
of its designation and at all times during which it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation.
"Disinterested Director" means, with respect to any proposed
transaction between the Company, a Restricted Subsidiary of the Company or an
Eligible Joint Venture, as applicable, and an Affiliate thereof, a member of
the Board of Directors who would not be a party to, or have a financial
interest in, such transaction and is not an officer, director or employee of,
and does not have a financial interest in, such Affiliate. For purposes of
this definition, no person would be deemed not to be a Disinterested Director
solely because such person holds Capital Stock of the Company.
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"Eligible Joint Venture" means a Joint Venture (other than a
Subsidiary) (i) that is or shall be formed with respect to the construction,
development, acquisition, servicing, ownership, operation or management of one
or more Permitted Facilities and (ii) in which the Company and Kiewit
together, directly or indirectly, own at least 50% of the Capital Stock
therein (of which the Company must own at least half (in any event not less
than 25% of the total outstanding Capital Stock)) and (iii) in respect of
which the Company alone or in combination with Kiewit, directly or indirectly,
(a) controls, by voting power, board or management committee membership, or
through the provisions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or management agreement
or otherwise, the management and operation of the Joint Venture or any
Permitted Facilities of the Joint Venture or (b) otherwise has significant
influence over the management or operation of the Joint Venture or any
Permitted Facility of the Joint Venture in all material respects (significant
influence includes, without limitation, the right to control or veto any
material act or decision) in connection with such management or operation. Any
Joint Venture that is an Eligible Joint Venture pursuant to this definition
because of the ownership of Capital Stock therein by Kiewit shall cease to be
an Eligible Joint Venture if (x) Kiewit disposes of any securities issued by
the Company and, as a result of such disposition, Kiewit becomes the
beneficial owner (as such term is defined under Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of less than 25% of the
outstanding shares of Voting Stock of the Company or (y) (I) as a result of
any action other than a disposition of securities by Kiewit, Kiewit becomes
the beneficial owner of less than 25% of the outstanding shares of Voting
Stock of the Company and (II) thereafter Kiewit disposes of any securities
issued by the Company as a result of which the beneficial ownership by Kiewit
of the outstanding Voting Stock of the Company is further reduced, provided
that thereafter such Joint Venture may become an Eligible Joint Venture if
Kiewit becomes the beneficial owner of at least 25% of the outstanding shares
of Voting Stock of the Company and the other conditions set forth in this
definition are fulfilled.
"Exchange Act" refers to the Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended from time to time.
"Fixed Charge Ratio" means the ratio, on a pro forma basis,
of (i) the aggregate amount of Consolidated EBITDA of any Person for the
Reference Period immediately prior to the date of the transaction giving rise
to the need to calculate the Fixed Charge Ratio (the "Transaction Date") to
(ii) the aggregate Consolidated Fixed Charges of such Person during such
Reference Period, provided that for purposes of such computation, in
calculating Consolidated EBITDA and Consolidated Fixed Charges, (1) the
Incurrence of the Debt giving rise to the need to calculate the Fixed Charge
Ratio and the application of the
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proceeds therefrom (including the retirement or defeasance of Debt) shall be
assumed to have occurred on the first day of the Reference Period, (2) Asset
Sales and Asset Acquisitions that occur during the Reference Period or
subsequent to the Reference Period and prior to the Transaction Date (but
including any Asset Acquisition to be made with the Debt Incurred pursuant to
(1) above) and any related retirement of Debt pursuant to an Offer to Purchase
(in the amount of the Excess Proceeds with respect to which such Offer to
Purchase has been made or would be made on the Transaction Date if the
purchase of Securities pursuant to such Offer to Purchase has not occurred on
or before the Transaction Date) shall be assumed to have occurred on the first
day of the Reference Period, (3) the Incurrence of any Debt during the
Reference Period or subsequent to the Reference Period and prior to the
Transaction Date and the application of the proceeds therefrom (including the
retirement or defeasance of other Debt) shall be assumed to have occurred on
the first day of such Reference Period, (4) Consolidated Interest Expense
attributable to any Debt (whether existing or being Incurred) computed on a
pro forma basis and bearing a floating interest rate shall be computed as if
the rate in effect on the date of computation had been the applicable rate for
the entire period unless the obligor on such Debt is a party to an Interest
Rate Protection Agreement (that shall remain in effect for the twelve month
period after the Transaction Date) that has the effect of fixing the interest
rate on the date of computation, in which case such rate (whether higher or
lower) shall be used and (5) there shall be excluded from Consolidated Fixed
Charges any Consolidated Fixed Charges related to any amount of Debt that was
outstanding during or subsequent to the Reference Period but is not
outstanding on the Transaction Date, except for Consolidated Fixed Charges
actually incurred with respect to Debt borrowed (as adjusted pursuant to
clause (4)) (x) under a revolving credit or similar arrangement to the extent
the commitment thereunder remains in effect on the Transaction Date or (y)
pursuant to the provision described in clause (iii) of Section 1008(b). For
the purpose of making this computation, Asset Sales and Asset Acquisitions
that have been made by any Person that has become a Restricted Subsidiary of
the Company or an Eligible Joint Venture or been merged with or into the
Company or any Restricted Subsidiary of the Company or an Eligible Joint
Venture during the Reference Period, or subsequent to the Reference Period and
prior to the Transaction Date, shall be calculated on a pro forma basis, as
shall be all the transactions contemplated by the calculations referred to in
clauses (1) through (5) above with respect to the Persons or businesses that
were the subject of such Asset Sales and Asset Acquisitions, assuming such
Asset Sales or Asset Acquisitions occurred on the first day of the Reference
Period.
"Foreign Asset Disposition" means an Asset Disposition in
respect of the Capital Stock or Property of a Restricted Subsidiary of the
Company or an Eligible Joint Venture to the extent that the proceeds of such
Asset Disposition are received
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by a Person subject in respect of such proceeds to the tax laws of a
jurisdiction other than the United States of America or any State thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the
U.S. as in effect as of the date of this Indenture, applied on a basis
consistent with the principles, methods, procedures and practices employed in
the preparation of the Company's audited financial statements, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved
by a significant segment of the accounting profession.
"Global Security" means a Security evidencing all or a part
of the Securities, issued in the name of the nominee of the Depositary, or
pursuant to the Depositary's instruction, in accordance with Section 201(a).
"Guarantee" means any obligation, contingent or otherwise,
of any Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any Debt obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt of
such other Person (whether arising by virtue of partnership arrangements
(other than solely by reason of being a general partner of a partnership), or
by agreement to keep-well, to purchase assets, goods, securities or services,
or to take-or-pay, or to maintain financial statement conditions or otherwise)
or (ii) entered into for purposes of assuring in any other manner the obligee
of such Debt of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business or the grant of a Lien in connection with any Non-Recourse
Debt. The term "Guarantee" used as a verb has a corresponding meaning.
"Holder," "holder of Securities," "Securityholder" and other
similar terms are defined to mean the registered holder of any Security.
"Incur" means with respect to any Debt, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such Debt,
provided that neither the accrual of interest (whether such interest is
payable in cash or kind) nor the accretion of original issue discount shall be
considered an Incurrence of Debt. The term "Incurrence" has a corresponding
meaning.
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"Indenture" means 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 pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Interest Rate Protection Agreement" means, with respect to
any Person, any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement intended to protect
such Person against fluctuations in interest rates to or under which such
Person or any of its Subsidiaries is a party or a beneficiary on the date of
this Indenture or becomes a party or a beneficiary thereafter.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
"Investment" in a Person means any investment in, loan or
advance to, Guarantee on behalf of, directly or indirectly, or other transfer
of assets to such Person (other than sales of products and services in the
ordinary course of business).
"Investment Grade" means with respect to the Securities, (i)
in the case of S&P, a rating of at least BBB-, (ii) in the case of Moody's, a
rating of at least Baa3, and (iii) in the case of a Rating Agency other than
S&P or Moody's, the equivalent rating, or in each case, any successor,
replacement or equivalent definition as promulgated by S&P, Moody's or other
Rating Agency as the case may be.
"Issue Date" means the date on which the Securities are
first authenticated and delivered under the Indenture.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.
"Kiewit" means and includes Kiewit Energy Company and any
other Subsidiary of Peter Kiewit Sons', Inc., Kiewit Construction Group Inc.
or Kiewit Diversified Group, Inc.
"Lien" means, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such Property, but shall not include any partnership, joint venture,
shareholder, voting trust or
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other similar governance agreement with respect to Capital Stock in a
Subsidiary or Joint Venture. For purposes of this Indenture, the Company shall
be deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
Property.
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" from an Asset Disposition means cash
payments received (including any cash payments received by way of a payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received (including any cash received upon sale or disposition of
any such note or receivable), excluding any other consideration received in
the form of assumption by the acquiring Person of Debt or other obligations
relating to the Property disposed of in such Asset Disposition or received in
any form other than cash) therefrom, in each case, net of (i) all legal, title
and recording tax expenses, commissions and other fees and expenses of any
kind (including consent and waiver fees and any applicable premiums, earn-out
or working interest payments or payments in lieu or in termination thereof)
incurred, (ii) all federal, state, provincial, foreign and local taxes and
other governmental charges required to be accrued as a liability under GAAP
(a) as a consequence of such Asset Disposition, (b) as a result of the
repayment of any Debt in any jurisdiction other than the jurisdiction where
the Property disposed of was located or (c) as a result of any repatriation of
any proceeds of such Asset Disposition, (iii) a reasonable reserve for the
after-tax cost of any indemnification payments (fixed and contingent)
attributable to seller's indemnities to the purchaser undertaken by the
Company, any of its Restricted Subsidiaries or any Eligible Joint Venture in
connection with such Asset Disposition (but excluding any payments that by the
terms of the indemnities shall not, under any circumstances, be made during
the term of the Securities), (iv) all payments made on any Debt that is
secured by such Property, in accordance with the terms of any Lien upon or
with respect to such Property, or that must by its terms or by applicable law
or in order to obtain a required consent or waiver be repaid out of the
proceeds from or in connection with such Asset Disposition, and (v) all
distributions and other payments made to holders of Capital Stock of
Restricted Subsidiaries or Eligible Joint Ventures (other than the Company or
its Restricted Subsidiaries) as a result of such Asset Disposition.
"Net Income" of any Person for any period means the net
income (loss) of such Person for such period, determined in accordance with
GAAP, except that extraordinary and non-recurring gains and losses as
determined in accordance with GAAP shall be excluded.
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"Net Worth" of any Person is defined to mean, as of any
date, the aggregate of capital, surplus and retained earnings (including any
cumulative currency translation adjustment) of such Person and its
consolidated Subsidiaries as would be shown on a consolidated balance sheet of
such Person and its consolidated Subsidiaries prepared as of such date in
accordance with GAAP. When the "Person" referred to above is the Company, the
foregoing references to "Subsidiaries" shall be deemed to refer to "Restricted
Subsidiaries."
"Non-Recourse", as applied to any Debt or any
sale-leaseback, means any project financing that is or was Incurred with
respect to the development, acquisition, design, engineering, procurement,
construction, operation, ownership, servicing or management of one or more
Permitted Facilities in respect of which the Company or one or more Restricted
Subsidiaries or Eligible Joint Ventures has a direct or indirect interest,
provided that such financing is without recourse to the Company, any
Restricted Subsidiary or any Eligible Joint Venture other than any Restricted
Subsidiary or any Eligible Joint Venture that does not own any Property other
than one or more of such Permitted Facilities or a direct or indirect interest
therein, provided further that such financing may be secured by a Lien on only
(i) the Property that constitutes such Permitted Facilities, (ii) the income
from and proceeds of such Permitted Facility, (iii) the Capital Stock of, and
other Investments in, any Restricted Subsidiary or Eligible Joint Venture that
owns the Property that constitutes any such Permitted Facility and (iv) the
Capital Stock of, and other Investments in, any Restricted Subsidiary or
Eligible Joint Venture obligated with respect to such financing and of any
Subsidiary or Joint Venture (that is a Restricted Subsidiary or an Eligible
Joint Venture) of such Person that owns a direct or indirect interest in any
such Permitted Facility, and provided further that an increase in the amount
of Debt with respect to one or more Permitted Facilities pursuant to the
financing provided pursuant to the terms of this definition (except for the
first refinancing of Construction Financing) may not be Incurred to fund or
enable the funding of any dividend or other distribution in respect of Capital
Stock. The fact that a portion of financing with respect to a Permitted
Facility is not Non-Recourse shall not prevent other portions of the financing
with respect to such Permitted Facility from constituting Non-Recourse Debt if
the foregoing requirements of this definition are fulfilled with respect to
such other portions.
"Offer to Purchase" means, as appropriate, a Change of
Control Offer pursuant to Section 1013 or an Excess Proceeds Offer pursuant to
Section 1015.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the President or any Vice President and by
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Controller, the Assistant Controller,
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the Secretary or any Assistant Secretary of the Company and delivered to the
Trustee. Each such certificate will comply with Section 314 of the Trust
Indenture Act and include the statements provided for in this Indenture if and
to the extent required thereby.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel who may be an employee of or counsel to the Company or who may
be other counsel satisfactory to the Trustee. Each such opinion shall comply
with Section 314 of the Trust Indenture Act and include the statements
provided for in this Indenture, if and to the extent required thereby.
"Outstanding", when used with respect to Securities, means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities that have come due or that are to be called
for redemption, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company or a Restricted Subsidiary)
in trust for the Holders of such Securities; provided that if such
Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision for giving such
notice within 10 days of such date of determination, satisfactory to
the Trustee, has been made;
(iii) Securities that have been paid pursuant to Section 308
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(iv) Securities as to which Defeasance has been effected
pursuant to Section 1202;
provided that in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given, made or taken any request,
demand, authorization, direction, notice, consent, waiver or
other action hereunder as of any date, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate or Restricted Subsidiary of
the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver
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or other action, only Securities which the Trustee
knows to be so owned shall be so disregarded, Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Restricted Subsidiary of the Company
or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Permitted Facility" means (i) an electric power or thermal
energy generation or cogeneration facility or related facilities (including
residual waste management and facilities that use thermal energy from a
cogeneration facility), and its or their related electric power transmission,
fuel supply and fuel transportation facilities, together with its or their
related power supply, thermal energy and fuel contracts and other facilities,
services or goods that are ancillary, incidental, necessary or reasonably
related to the marketing, development, construction, management, servicing,
ownership or operation of the foregoing, owned by a utility or otherwise, as
well as other contractual arrangements with customers, suppliers and
contractors or (ii) any infrastructure facilities related to (A) the treatment
of water for municipal and other uses, (B) the treatment and/or management of
waste water, (C) the treatment, management and/or remediation of waste,
pollution and/or potential pollutants and (D) any other process or
environmental purpose.
"Permitted Facilities Debt" means any Debt that is or was
Incurred with respect to the direct or indirect development, acquisition,
design, engineering, procurement, construction, operation, ownership,
servicing or management of one or more Permitted Facilities (x) currently in
development by the Company (directly or indirectly) or which are hereafter
acquired or developed by the Company (directly or indirectly) and (y) in which
the Company or one or more Restricted Subsidiaries or Eligible Joint Ventures
has a direct or indirect interest.
"Permitted Funding Company Loans" means (a) Debt of a
Restricted Subsidiary, all the Capital Stock of which is owned, directly or
indirectly by the Company and that (x) does not own any direct or indirect
interest in a Permitted Facility and (y) is not directly or indirectly
obligated on any Debt owed to any Person other than the Company, a Restricted
Subsidiary or an Eligible Joint Venture (a "Funding Company"), owed to a
Restricted Subsidiary or an Eligible Joint Venture that is not directly or
indirectly obligated on any Debt owed to any Person other than the Company, a
Restricted Subsidiary or an Eligible Joint Venture (a "Holding Company"),
provided that such Debt (i) does not require that interest be paid in cash at
any time sooner
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than six months after the final Stated Maturity of the Securities, (ii) does
not require any payment of principal at any time sooner than six months after
the final Stated Maturity of the Securities, (iii) is subordinated in right of
payment to all other Debt of such Restricted Subsidiary other than Debt
Incurred pursuant to clause (vii) of Section 1009(b), all of which shall be
pari passu and (iv) is evidenced by a subordinated note in the form attached
to the Indenture as Exhibit B and that shall not contain or be governed by any
contractual provisions other than those set forth in Exhibit B, and (b) Debt
of a Holding Company to a Funding Company.
"Permitted Investment" means any Investment that is made
directly or indirectly by the Company and its Restricted Subsidiaries in (i) a
Restricted Subsidiary or Eligible Joint Venture (excluding for the purpose of
this clause (i) any Construction Financing) that, directly or indirectly, is
or shall be engaged in the construction, development, acquisition, operation,
servicing, ownership or management of a Permitted Facility or in any other
Person as a result of which such other Person becomes such a Restricted
Subsidiary or an Eligible Joint Venture, provided that at the time that any of
the foregoing Investments is proposed to be made, no Event of Default or event
that, after giving notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, (ii) Construction Financing
provided by the Company (A) to any of its Restricted Subsidiaries (other than
an Eligible Joint Venture) up to 100% of the Construction Financing required
by such Restricted Subsidiary and (B) to any Eligible Joint Venture a portion
of the Construction Financing required by such Eligible Joint Venture that
does not exceed the ratio of the Capital Stock in such Eligible Joint Venture
that is owned directly or indirectly by the Company to the total amount of the
Capital Stock in such Eligible Joint Venture that is owned directly and
indirectly by the Company and Kiewit together (provided that the Company may
provide such Construction Financing to such Eligible Joint Venture only if
Kiewit provides the balance of such Construction Financing or otherwise causes
it to be provided), if, in either case, (x) the aggregate proceeds of all the
Construction Financing provided is not more than 85% of the sum of the
aggregate proceeds of such Construction Financing and the aggregate owners'
equity investment in such Restricted Subsidiary or such Eligible Joint
Venture, as the case may be, (y) the Company receives a pledge or assignment
of all the Capital Stock of such Restricted Subsidiary or such Eligible Joint
Venture, as the case may be, that is owned by non-governmental Person (other
than the Company, its Subsidiaries or the Eligible Joint Ventures) that is
permitted to be pledged for such purpose under applicable law and (z) neither
the Company nor Kiewit reduces its beneficial ownership in such Restricted
Subsidiary or such Eligible Joint Venture, as the case may be, prior to the
repayment in full of the Company's portion of the Construction Financing,
(iii) any Cash Equivalents, (iv) prepaid expenses, negotiable instruments held
for collection and lease, utility and
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workers' compensation, performance and other similar deposits in the ordinary
course of business consistent with past practice, (v) loans and advances to
employees made in the ordinary course of business and consistent with past
practice, (vi) Debt incurred pursuant to Currency Protection Agreements and
Interest Rate Protection Agreements as otherwise permitted by this Indenture,
(vii) bonds, notes, debentures or other debt securities and instruments
received as a result of Asset Dispositions to the extent permitted by Sections
1015 and 1021, (viii) any Lien permitted under Section 1012 and (ix) bank
deposits and other Investments (to the extent they do not constitute Cash
Equivalents) required by lenders in connection with any Non-Recourse Debt,
provided that the President or the Chief Financial Officer of the Company
determines in good faith, as evidenced by an Officers' Certificate, that such
bank deposits or Investments are required to effect such financings and are
not materially more restrictive, taken as a whole, than comparable
requirements, if any, in comparable financings in the applicable jurisdiction
or (x) any Person to the extent made with Capital Stock (other than Redeemable
Stock) of the Company (whether by way of purchase, merger, consolidation or
otherwise) to the extent permitted under Section 1021.
"Permitted Joint Venture" means a Joint Venture (i) that is
or shall be formed with respect to the construction, development, acquisition,
servicing, ownership, operation or management of one or more Permitted
Facilities and (ii) in which (A) the Company or (B) the Company and Kiewit
together, directly or indirectly, own at least 70% of the Capital Stock
therein (of which the Company must own at least half (in any event not less
than 35% of the total outstanding Capital Stock)), provided that if applicable
non-U.S. law restricts the amount of Capital Stock that the Company may own,
the Company must own at least 70% of the amount of Capital Stock that it may
own pursuant to such law, which in any event must be not less than 35% of the
total outstanding Capital Stock therein and (iii) in respect of which the
Company alone or in combination with Kiewit, directly or indirectly, (a)
controls, by voting power, board or management committee membership, or
through the provisions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or management agreement
or otherwise, the management and operation of the Joint Venture or any
Permitted Facilities of the Joint Venture or (b) otherwise has significant
influence over the management or operation of the Joint Venture or any
Permitted Facility of the Joint Venture in all material respects (significant
influence includes, without limitation, the right to control or veto any
material act or decision) in connection with such management or operation. Any
Joint Venture that is a Permitted Joint Venture pursuant to this definition
because of the ownership of Capital Stock therein by Kiewit shall cease to be
a Permitted Joint Venture if (x) Kiewit disposes of any securities issued by
the Company and, as a result of such disposition, Kiewit becomes the
beneficial owner (as such term is defined under Rule 13d-3 or any successor
rule or regulation
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promulgated under the Exchange Act) of less than 25% of the outstanding shares
of Voting Stock of the Company or (y) (I) as a result of any action other than
a disposition of securities by Kiewit, Kiewit becomes the beneficial owner of
less than 25% of the outstanding shares of Voting Stock of the Company and
(II) thereafter Kiewit disposes of any securities issued by the Company as a
result of which the beneficial ownership by Kiewit of the outstanding Voting
Stock of the Company is further reduced, provided that thereafter such Joint
Venture may become a Permitted Joint Venture if Kiewit becomes the beneficial
owner of at least 25% of the outstanding shares of the Voting Stock of the
Company and the other conditions set forth in this definition are fulfilled.
"Permitted Payments" means, with respect to the Company, any
of its Restricted Subsidiaries or any Eligible Joint Venture, (i) any dividend
on shares of Capital Stock of the Company payable (or to the extent paid)
solely in Capital Stock (other than Redeemable Stock) or in options, warrants
or other rights to purchase Capital Stock (other than Redeemable Stock) of the
Company and any distribution of Capital Stock (other than Redeemable Capital
Stock) of the Company in respect of the exercise of any right to convert or
exchange any instrument (whether Debt or equity and including Redeemable
Capital Stock) into Capital Stock (other than Redeemable Capital Stock) of the
Company, (ii) the purchase or other acquisition or retirement for value of any
shares of the Company's Capital Stock, or any option, warrant or other right
to purchase shares of the Company's Capital Stock with additional shares of,
or out of the proceeds of a substantially contemporaneous issuance of, Capital
Stock other than Redeemable Stock, (iii) any defeasance, redemption, purchase
or other acquisition for value of any Debt that by its terms ranks subordinate
in right of payment to the Securities with the proceeds from the issuance of
(x) Debt that is subordinate to the Securities at least to the extent and in
the manner as the Debt to be defeased, redeemed, purchased or otherwise
acquired is subordinate in right of payment to the Securities, provided that
such subordinated Debt provides for no mandatory payments of principal by way
of sinking fund, mandatory redemption or otherwise (including defeasance) by
the Company (including, without limitation, at the option of the holder
thereof other than an option given to a holder pursuant to a "change of
control" or an "asset disposition" covenant that is no more favorable to the
holders of such Debt than comparable covenants for the Debt being defeased,
redeemed, purchased or acquired or, if none, Sections 1013 and 1015 and such
Debt is not in an amount (net of any original issue discount) greater than,
any Stated Maturity of the Debt being replaced and the proceeds of such
subordinated Debt are utilized for such purpose within 45 days of issuance or
(y) Capital Stock (other than Redeemable Stock), (iv) Restricted Payments in
an amount not to exceed $75 million in the aggregate provided that no payment
may be made pursuant to this clause (iv) if an Event of Default, or an event
that, after giving notice or lapse of time or both, would become
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an Event of Default, has occurred and is continuing, (v) any payment or
Investment required by applicable law in order to conduct business operations
in the ordinary course, (vi) a Permitted Investment and (vii) Investments in
Unrestricted Subsidiaries and other Persons that are not Restricted
Subsidiaries or Eligible Joint Ventures in an amount not to exceed $100
million in the aggregate, provided that no payment or Investment may be made
pursuant to this clause (vii) if an Event of Default, or an event that, after
giving notice or lapse of time or both, would become an Event of Default, has
occurred and is continuing. Notwithstanding the foregoing, the amount of
Investments that may be made pursuant to clauses (iv) and (vii), as the case
may be, may be increased by the net reduction in Investments of the type made
previously pursuant to clauses (iv) and (vii), as the case may be, that result
from payments of interest on Debt, dividends, or repayment of loans or
advances, the proceeds of the sale or disposition of the Investment or other
return of the amount of the original Investment to the Company, the Restricted
Subsidiary or the Eligible Joint Venture that made the original Investment
from the Person in which such Investment was made or any distribution or
payment of such Investment to the extent that such distribution or payment
constituted either a Restricted Payment or a Permitted Payment, provided that
(x) the aggregate amount of such payments shall not exceed the amount of the
original Investment by the Company, such Restricted Subsidiary or Eligible
Joint Venture that reduced the amount available pursuant to clause (iv) or
clause (vii), as the case may be, for making Restricted Payments and (y) such
payments may be added pursuant to this proviso only to the extent such
payments are not included in the calculation of Adjusted Consolidated Net
Income.
"Permitted Working Capital Facilities" means one or more
loan or credit agreements providing for the extension of credit to the Company
for the Company's working capital purposes, which credit agreements shall be
ranked pari passu with or subordinate to the Securities in right of payment
and may be secured or unsecured.
"Person" means an individual, a corporation, a partnership,
an association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 308 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
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"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) or preferred or preference stock of
such Person that is outstanding or issued on or after the Issue Date of the
Securities.
"Property" of any Person means all types of real, personal,
tangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person under GAAP.
"Purchase Date" means, as appropriate, the Change of Control
Purchase Date under Section 1013 or the Excess Proceeds Purchase Date under
Section 1015.
"Purchase Money Debt" means Debt representing, or Incurred
to finance, the cost of acquiring any Property, provided that (i) any Lien
securing such Debt does not extend to or cover any other Property other than
the Property being acquired and (ii) such Debt is incurred, and any Lien with
respect thereto is granted, within 18 months of the acquisition of such
Property.
"Rating Agencies" means (i) S&P and (ii) Moody's or (iii) if
S&P or Moody's or both do not make a rating of the Securities publicly
available, a nationally recognized securities rating agency or agencies, as
the case may be, selected by the Company, which shall be substituted for S&P,
Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the
following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories), (ii) with respect to Moody's, any of the following categories:
Ba, B, Caa, Ca, C and D (or equivalent successor categories) and (iii) the
equivalent of any such category of S&P or Moody's used by another Rating
Agency. In determining whether the rating of the Securities has decreased by
one or more gradations, gradations within Rating Categories (+ and - for S&P,
1, 2 and 3 for Moody's or the equivalent gradations for another Rating Agency)
shall be taken into account (e.g., with respect to S&P, a decline in a rating
from BB+ to BB, as well as from BB- to B+, shall constitute a decrease of one
gradation).
"Rating Decline" means the occurrence of the following on,
or within 90 days after, the earlier of (i) the occurrence of a Change of
Control and (ii) the date of public notice of the occurrence of a Change of
Control or of the public notice of the intention of the Company to effect a
Change of Control (the "Rating Date") which period shall be extended so long
as the rating of the Securities is under publicly announced consideration for
possible downgrading by any of the Rating Agencies): (a) in the event that the
Securities are rated by either Rating Agency on the Rating Date as Investment
Grade, the rating of the Securities by both such Rating Agencies shall be
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reduced below Investment Grade, or (b) in the event the Securities are rated
below Investment Grade by both such Rating Agencies on the Rating Date, the
rating of the Securities by either Rating Agency shall be decreased by one or
more gradations (including gradations within Rating Categories as well as
between Rating Categories).
"Redeemable Stock" means any class or series of Capital
Stock of any Person that by its terms or otherwise is (i) required to be
redeemed prior to the Stated Maturity of the Securities, (ii) redeemable at
the option of the holder of such class or series of Capital Stock at any time
prior to the Stated Maturity of the Securities or (iii) convertible into or
exchangeable for Capital Stock referred to in clause (i) or (ii) above or Debt
having a scheduled maturity prior to the Stated Maturity of the Securities,
provided that any Capital Stock that would not constitute Redeemable Stock but
for provisions thereof giving holders thereof the right to require the Company
to purchase or redeem such Capital Stock upon the occurrence of an "asset
sale" or a "change of control" occurring prior to the Stated Maturity of the
Securities shall not constitute Redeemable Stock if the "asset sale" or
"change of control" provision applicable to such Capital Stock is no more
favorable to the holders of such Capital Stock than the provisions contained
in Section 1013 and 1015 and such Capital Stock specifically provides that the
Company shall not purchase or redeem any such Capital Stock pursuant to such
covenants prior to the Company's purchase of Securities required to be
repurchased by the Company under Sections 1013 and 1015.
"Redemption Date" when used with respect to any Security to
be redeemed, means the date fixed for redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security
to be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Period" means the four most recently completed
fiscal quarters for which financial information is available preceding the
date of a transaction giving rise to the need to make a financial calculation.
"Regular Record Date", for the interest payable on any
Interest Payment Date means the the fifteenth day (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the
Trustee, means the chairman or any vice chairman of the board of directors,
the chairman or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee corporate, the president, any
vice president, the secretary, any assistant secretary, any other officer of
the
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Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Company's Capital Stock, provided that a
dividend or other distribution consisting of the Capital Stock of an
Unrestricted Subsidiary shall not constitute a Restricted Payment except to
the extent of the portion thereof that is equal to the portion of the total
Investment in such Unrestricted Subsidiary that is represented by the
Investment that was made pursuant to clause (vii) of the definition of
"Permitted Payment," (ii) any payment on account of the purchase, redemption,
retirement or acquisition for value of the Company's Capital Stock, (iii) any
defeasance, redemption, purchase or other acquisition or retirement for value
prior to the scheduled maturity of any Debt ranked subordinate in right of
payment to the Securities other than repayment of Debt of the Company to a
Restricted Subsidiary or an Eligible Joint Venture, (iv) any Investment made
in a Person (other than the Company or any Restricted Subsidiary or any
Eligible Joint Venture) and (v) designating a Restricted Subsidiary as an
Unrestricted Subsidiary (the Restricted Payment made upon such a designation
to be determined as the fair market value of the Capital Stock of such
Restricted Subsidiary owned directly or indirectly by the Company at the time
of the designation). Notwithstanding the foregoing, "Restricted Payment" shall
not include any Permitted Payment, except that any payment made pursuant to
clauses (iv) and (v) of the definition of "Permitted Payment" shall be counted
in the calculation set forth in clause (c) of Section 1010(a).
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation.
"Securities" has the meaning stated in the first recital of
this Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that, if
at any time there is more than one Person acting as Trustee under this
Indenture, "Securities" with respect to the Indenture as to which such Person
is Trustee shall have the meaning stated in the first recital of this
Indenture and shall more particularly mean Securities authenticated and
delivered under this Indenture, exclusive, however, of Securities of any
series as to which such Person is not Trustee.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
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"Senior Debt" means the principal of and interest on all
Debt of the Company whether created, Incurred or assumed before, on or after
the Issue Date of the Securities (other than the Securities), provided that
Senior Debt shall not include (i) Debt that, when Incurred and without respect
to any election under Section 1111(b) of Title 11, United States Code, was
without recourse to the Company, (ii) Debt of the Company to any Affiliate and
(iii) any Debt of the Company that, by the terms of the instrument creating or
evidencing the same, is specifically designated as being junior in right of
payment to the Securities or any other Debt of the Company.
"Significant Subsidiary" means a Restricted Subsidiary that
is a "significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X
under the Securities Act and the Exchange Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 310.
"Stated Maturity" means, with respect to any debt security
or any installment of interest thereon, the date specified in such debt
security as the fixed date on which any principal of such debt security or any
such installment of interest is due and payable.
"Subsidiary" means, with respect to any Person including,
without limitation, the Company and its Subsidiaries, (i) any corporation or
other entity of which such Person owns, directly or indirectly, a majority of
the Capital Stock or other ownership interests and has ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions, and (ii) with respect to the Company and, as appropriate,
its Subsidiaries, any Permitted Joint Venture, including, without limitation,
Coso Land Company Joint Venture, Coso Finance Partners, Coso Energy Developers
and Coso Power Developers, provided that in respect of any Subsidiary that is
not a Permitted Joint Venture, the Company must exercise control over such
Subsidiary and its Property to the same extent as a Permitted Joint Venture.
"Subsidiary Refinancing Debt" means Debt issued in exchange
for, or the proceeds of which are used to refinance (including to purchase),
outstanding Debt of a Restricted Subsidiary or an Eligible Joint Venture,
including, without limitation, Construction Financing, in an amount (or, if
such new Debt provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or refinanced
(plus accrued interest or dividends and all fees, premiums (in excess of
accreted value) and expenses related to such exchange or refinancing), for
which purpose the amount so exchanged or refinanced shall not exceed, in the
case of Debt, the lesser of (x) the principal amount of the Debt so
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exchanged or refinanced and (y) if the Debt being exchanged or refinanced was
issued with an original issue discount, the accreted value thereof (as
determined in accordance with GAAP) at the time of such exchange or
refinancing, and, in the case of an equity investment made in lieu or as part
of Construction Financing Debt, in an amount not to exceed the capital and
surplus shown on the balance sheet of such Restricted Subsidiary or Eligible
Joint Venture, provided that (A) such Debt shall be Non-Recourse, if the Debt
so exchanged or refinanced is Non-Recourse and (B) the Average Life of the new
Debt shall be equal to or greater than the Average Life of the Debt to be
exchanged or refinanced, provided further that upon the first refinancing of
any Construction Financing of a Restricted Subsidiary or an Eligible Joint
Venture, (i) the amount of the Subsidiary Refinancing Debt issued in exchange
for or to refinance such Construction Financing shall not be limited by this
provision and (ii) the Subsidiary Refinancing Debt issued in exchange for or
to refinance such Construction Financing shall not be subject to the
provisions of the foregoing clause (B) of this provision.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors Incurred, created, assumed or Guaranteed by such Person or any of
its Subsidiaries or Joint Ventures arising in the ordinary course of business.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this Indenture until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed; provided that
in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" shall mean, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary of the
Company that becomes an Unrestricted Subsidiary in accordance with the
requirements set forth in the next sentence. The Company may designate any
Restricted Subsidiary as an Unrestricted Subsidiary if (a) such designation is
in compliance with Section 1010(a) and (b) after giving effect to such
designation, such Subsidiary does not own, directly or indirectly, a majority
of the Capital Stock or the Voting Stock of any other Restricted Subsidiary
unless such other Restricted Subsidiary is designated as an Unrestricted
Subsidiary at the same time. Any such designation shall be effected by filing
with the Trustee an Officers' Certificate certifying that such designation
complies with the requirements of the immediately preceding sentence. No Debt
or other obligation of an Unrestricted Subsidiary may be with recourse to the
Company, any
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of its Restricted Subsidiaries, any Eligible Joint Venture or any of their
respective Property except to the extent otherwise permitted by the provisions
of this Indenture. An Unrestricted Subsidiary may be designated as a
Restricted Subsidiary if (i) all the Debt of such Unrestricted Subsidiary
could be Incurred under Section 1009, or (ii) any portion of such Debt could
not be incurred thereunder, if the Company could borrow all such remaining
Debt pursuant to Section 1008(a).
"U.S. Government Obligations" means securities that are (i)
direct obligations of the U.S. 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 U.S., the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
U.S., 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
or trust company as custodian with respect to any such U.S. Government
Obligations or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of
a depositary receipt, provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest
on or principal of the U.S. Government Obligation evidenced by such depositary
receipt.
"Vice President", when used with respect to the Company or
the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Voting Stock" means, with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote for the
election of directors (or persons fulfilling similar responsibilities) of such
Person.
Other definitions:
Defined Term Defined in Section
- ------------ ------------------
Act 104
Agent Members 201(b)
Change of Control Offer 1013(b)
Change of Control Purchase Date 1013(b)
Covenant Defeasance 1203
CUSIP Numbers 307(f)
Defaulted Interest 310
Defeasance 1202
Excess Proceeds 1015(a)
Excess Proceeds Offer 1015(a)
Excess Proceeds Purchase Date 1015(e)
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Event of Default 501
Ineligible Investments 1021
Notice of Default 501(4)
Paying Agent 304
Percentage Limit 1021
Record Expiration Date 104
Security Registrar 304
Surviving Entity 801
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee such certificates and opinions as may be required
under the Trust Indenture Act. Each such certificate or opinion shall be given
in the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirement set
forth in this Indenture.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(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 each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
If several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
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one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
If any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, if it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section 104.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
If such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date
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of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner that the
Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
register kept by the Security Registrar.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give or take
any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders of Securities, provided that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to
in the next paragraph. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities on such record date, and no other
Holders, shall be entitled to take the relevant actions whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable Record
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities on such record date; and provided further that for the purpose of
determining whether Holders of the requisite principal amount of such
Securities have taken such action, no Security shall be deemed to have been
Outstanding on such record date unless it is also Outstanding on the date such
action is to become effective. Nothing in this paragraph shall prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Record Expiration Date to be given to the Trustee
in writing and to each Holder of Securities in the manner set forth in Section
106.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of
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Default, (ii) any declaration of acceleration referred to in Section 502,
(iii) any request to institute proceedings referred to in Section 507(2) or
(iv) any direction referred to in Section 512. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities on such
record date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date; and provided further that for the purpose of determining whether
Holders of the requisite principal amount of such Securities have taken such
action, no Security shall be deemed to have been Outstanding on such record
date unless it is also Outstanding on the date such action is to become
effective. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the matter(s) to be
submitted for potential action by Holders and the applicable Record Expiration
Date to be given to the Company in writing and to each Holder of Securities in
the manner set forth in Section 106.
With respect to any record date set pursuant to this Section
104, the party hereto that sets such record date may designate any day as the
"Record Expiration Date" and from time to time may change the Record
Expiration Date to any earlier or later day, provided that no such change
shall be effective unless notice of the proposed new Record Expiration Date is
given to the other party hereto in writing, and to each Holder of Securities
in the manner set forth in Section 106, on or before the existing Record
Expiration Date. If a Record Expiration Date is not designated with respect to
any record date set pursuant to this Section 104, the party hereto that set
such record date shall be deemed to have initially designated the 180th day
after such record date as the Record Expiration Date with respect thereto,
subject to its right to change the Record Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Record Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder
to take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
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appointment with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing and mailed, first-class postage prepaid, to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this Indenture,
Attention: General Counsel, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at such Holder's address as it appears in
the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such
notice. Neither the failure to mail or give such notice as otherwise provided
herein, nor any defect in any notice so mailed or given to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. When this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
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If any provision hereof limits, qualifies or conflicts with
a provision of the Trust Indenture Act that is required under such
Act to be part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or to be excluded, as the case may
be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein, the Cross-Reference
Table and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in any Security
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal
or equitable right, remedy or claim under this Indenture. This Indenture may
not be used to interpret another indenture, loan agreement or debt agreement
of the Company or any of its Subsidiaries. No such other indenture or loan or
debt agreement may be utilized to interpret this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS
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INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR
ANY HOLDER OF THE SECURITIES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY
IN ANY OTHER JURISDICTION.
SECTION 113. Legal Holidays.
If any Interest Payment Date, Redemption Date, Purchase Date
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of any Security
other than a provision in the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or principal (and premium, if any) need not be made on such date but
may be made on the next succeeding Business Day with the same force and effect
(including with respect to the accrual of interest) as if made on the Interest
Payment Date, Redemption Date, Purchase Date or at the Stated Maturity.
SECTION 114. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator,
as such, of the Company shall not have any liability for any obligations of
the Company under the Securities or this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Holder
by accepting a Security waives and releases all such liability. Such waiver
and release are part of the consideration for the issuance of the Securities.
SECTION 115. Duplicate Originals.
All parties may sign any number of copies or counterparts of
this Indenture. Each signed copy or counterpart shall be an original, but all
of them together shall represent the same agreement.
ARTICLE TWO
THE SECURITIES
SECTION 201. Global and Certificated Securities.
The Securities of each series shall be substantially in the
form as set forth in Exhibit A hereto or as shall be
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established in one or more indentures supplemental hereto or approved from
time to time by or pursuant to a Board Resolution in accordance with Section
301. The Securities may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto, and may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Company). Each
Security shall be dated the date of its authentication.
(a) Global Securities. Securities of or within a series may
be issued in the form of one or more permanent global securities in
definitive, fully registered form with the global security legend set forth in
Section 307 (each, a "Global Security"), which shall be deposited on behalf of
the purchasers of such Securities represented thereby with the Trustee, at its
New York office, as custodian for the Depositary (or with such other custodian
as the Depositary may direct), and registered in the name of the Depositary or
a nominee of the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depositary or its nominee as
hereinafter provided.
The Depositary Trust Company shall act as initial
Depositary. If at any time the Depositary for the Securities of a series
represented by one or more Global Securities notifies the Company that it is
unwilling or unable to continue as Depositary of such Securities or if at any
time the Depositary shall no longer be eligible as provided in the second
sentence of the definition of "Depositary" and a successor Depositary is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company shall promptly execute, and
the Trustee shall promptly authenticate and deliver, Securities in
Certificated form, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security or Securities then
outstanding in exchange for such Global Security or Securities, and this
Section 201(a) and Section 201(b) shall no longer be applicable to the
Securities. In addition, the Company may at any time and in its sole
discretion determine that the Securities of any series shall no longer be
represented by Global Securities. In such event the Company shall promptly
execute, and the Trustee, upon receipt of a Company Order evidencing such
determination by the Company, shall promptly authenticate and deliver,
Securities of such series in Certificated form without coupons, in authorized
denominations and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities then outstanding in exchange for
such Global Security or Securities and this Section 201(a) and Section 201(b)
shall no longer be applicable to the
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Securities. Upon the exchange of the Global Securities for
such Securities in Certificated form, in authorized denominations,
such Global Securities shall be cancelled by the Trustee. Such
Securities in Certificated form issued in exchange for the Global Securities
pursuant to this Section 201(a) and Section 201(b) 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 Securities to the Persons
in whose names such Securities are so registered.
Notwithstanding any other provision hereof to the contrary,
so long as the outstanding Securities of any series are represented by one or
more Global Securities, the Company shall pay or cause to be paid the
principal of, and interest on, such Global Securities to the Depositary or its
nominee by wire transfer of immediately available funds on the date such
payments are due in accordance with the operational arrangements of the
Depositary, as such arrangements are amended from time to time.
(b) Book-Entry Provisions. This Section 201(b) shall apply
only to the Global Security or Securities deposited with or on behalf of the
Depositary.
The Company shall execute and the Trustee shall, in
accordance with this Section 201(b), authenticate and deliver initially one or
more Global Securities that (a) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee as custodian
for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to the Global
Security or Securities held on their behalf by the Depositary or by the
Trustee as the custodian of the Depositary or under such Global Security, and
the Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security or
Securities for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest in
the Global Security or Securities.
(c) Certificated Securities. Except as provided in this
Section or Section 307 or Section 309, owners of beneficial interests in the
Global Security or Securities will not be entitled to receive physical
delivery of Certificated Securities.
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SECTION 202. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture
IBJ SCHRODER BANK & TRUST COMPANY
as Trustee
By:___________________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Any or
all of the following shall either be established in one or more Board
Resolutions or pursuant to authority granted by one or more Board Resolutions
and, subject to Section 303, set forth, or determined in the manner provided,
in an Officers' Certificate, or set forth in the form of Securities attached
hereto in Exhibit A or shall be established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series, as
applicable (each of which (except for the matters set forth in clauses (1),
(2) and (15) below), if so provided, may be determined from time to time by
the Company with respect to unissued Securities of the series when issued from
time to time):
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 307, 308,
309 or 906);
(3) the date or dates, or the method by which such date or
dates will be determined or extended, on which the principal of the
Securities of the series shall be payable;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which
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such rate or rates shall be determined, the date or dates from which
such interest shall accrue or the method by which such date or dates
shall be determined, the Interest Payment Dates on which such
interest will be payable and the Regular Record Date, if any, for the
interest payable on any Security on any Interest Payment Date, or the
method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(5) the place or places, if any, other than or in addition
to the Borough of Manhattan, The City of New York, where the
principal of (and premium, if any), interest, if any, on Securities
of the series shall be payable, any Securities of the series may be
surrendered for registration of transfer, Securities of the series
may be surrendered for exchange or conversion and notices or demands
to or upon the Company in respect of the Securities of the series and
this Indenture may be served;
(6) the period or periods within which, the price or prices
at which, and other terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the
Company, if the Company is to have the option;
(7) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the
series shall be issuable;
(8) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(9) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series that shall be
payable upon declaration of acceleration thereof pursuant to Section
502 or, if applicable, the portion of the principal amount of
Securities of the series that is convertible in accordance with the
provisions of this Indenture or the method by which such portion
shall be determined;
(10) whether the amount of payments of principal of (and
premium, if any) or interest, if any, on the Securities of the series
may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on
one or more currencies, currency units, composite currencies,
commodities, equity indices or other indices), and the manner in
which such amounts shall be determined;
(11) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such
events as may be specified;
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(12) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to
Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein;
(13) whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the
series are to be issuable in permanent global form and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series
and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than
in the manner provided in Section 307, and, if Securities of the
series are to be issuable as a global Security, the identity of the
depositary for such series;
(14) the date as of which any temporary global Security
representing Outstanding Securities of the series shall be dated if
other than the date of original issuance of the first Security of the
series to be issued;
(15) the Person to whom any interest on any Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, and
the extent to which, or the manner in which, any interest payable on
a temporary global Security on an Interest Payment Date will be paid
if other than in the manner provided in Section 307;
(16) the applicability, if any, of Sections 1202 and/or 1203
to the Securities of the series and any provisions in modification
of, in addition to or in lieu of any of the provisions of Article
Twelve;
(17) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or
conditions;
(18) if the Securities of the series are to be issued upon
the exercise of warrants, the time, manner and place for such
Securities to be authenticated and delivered;
(19) the obligation, if any, of the Company to permit the
conversion of the Securities of such series into the Company's Common
Stock or Preferred Stock, and the terms and conditions upon which
such conversion shall be effected (including, without limitation, the
initial conversion price or rate, the conversion period, any
adjustment of the
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applicable conversion price, any requirements relative to reservation
of shares for purposes of conversion and any other provision in
addition to or in lieu of those set forth in this Indenture or any
indenture supplemental hereto relative to such obligation); and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All 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 (subject to Section 303) and set
forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent
of the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy
of an appropriate record of such action(s) 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 setting forth the terms of
the Securities of such series.
SECTION 302. Denominations. The Securities of each series
shall be issuable in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series, other than Securities
issued in global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution and Authentication.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee
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for authentication, together with a Company Order for the authentication and
delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as in this Indenture
provided and not otherwise.
If all the Securities of any series are not to be issued at
one time and if the Board Resolution or supplemental indenture establishing
such series shall so permit, such Company Order may set forth procedures
acceptable to the Trustee for the issuance of such Securities and determining
the terms of particular Securities of such series, such as interest rate or
formula, maturity date, date of issuance and date from which interest shall
accrue. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Trust Indenture Act
Section 315(a) through 315(d)) shall be fully protected in relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities have been
established in conformity with the provisions of this Indenture;
(b) the terms of such Securities have been established in
conformity with the provisions of this Indenture; and
(c) such Securities, when completed by appropriate
insertions and executed and delivered by the Company to the Trustee
for authentication in accordance with this Indenture, authenticated
and delivered by the Trustee in accordance with this Indenture and
issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute legal, valid
and binding obligations of the Company, enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights, to
general equitable principles and to such other qualifications as such
counsel shall conclude do not materially affect the rights of Holders
of such Securities; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of
such certificate, that no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will
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affect the Trustee's own rights, duties, obligations or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued
at one time, it shall not be necessary to deliver an Officers' Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion
of Counsel or an Officers' Certificate otherwise required pursuant to the
preceding paragraph at the time of issuance of each Security of such series,
but such order, opinion and certificates, with appropriate modifications to
cover such future issuances, shall be delivered at or before the time of
issuance of the first Security of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
SECTION 304. Registrar and Paying Agent.
The Company shall maintain an office or agency where each
series of Securities may be presented for registration of transfer or for
exchange (the "Security Registrar") and an office or agency where each series
of Securities may be presented for payment (the "Paying Agent"). The Security
Registrar shall keep a register for each series of Securities and of their
transfer and exchange. The Company may have one or more co-registrars and one
or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Security Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the Trust Indenture Act. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any
such agent. If the Company fails to maintain a Security Registrar or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 607. The Company or any of its U.S.
wholly owned Subsidiaries may act as Paying Agent, Security Registrar,
co-registrar or transfer agent.
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The Company initially appoints the Trustee as Security
Registrar and Paying Agent in connection with each series of Securities.
SECTION 305. Paying Agent To Hold Money in Trust.
At least one Business Day prior to each due date of the
principal and interest on any Security, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the
Company or one of its U.S. wholly owned Subsidiaries acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent (other than the
Trustee) to pay all money held by it to the Trustee and to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 306. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Security Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
SECTION 307. Transfer and Exchange of Global Securities.
(a) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of the Global Security or Securities of any series or
beneficial interests therein shall be effected through the Depositary, in
accordance with this Indenture (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Depositary therefor, if
applicable.
(ii) Notwithstanding any other provisions of this
Indenture (other than the provisions set forth in Section 307), the
Global Security of any series may not be transferred 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
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
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(b) Cancellation or Adjustment of Global Securities. At such
time as all beneficial interests in the Global Securities of any series have
either been exchanged for certificated Securities of the same series,
redeemed, repurchased or cancelled, such Global Securities of such series
shall be returned to the Trustee for cancellation or retained and cancelled by
the Trustee. At any time prior to such cancellation, if any beneficial
interests in the Global Securities of any series are exchanged for
certificated Securities of the same series, redeemed, repurchased or
cancelled, the principal amount of Securities represented by such Global
Securities of such series shall be reduced and an adjustment shall be made by
the Trustee or the custodian to reflect such reduction on the books and
records of the custodian for such Global Securities of such series with
respect to such Global Securities of such series.
(c) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate within a reasonable time Certificated Securities, and
Global Securities at the Security Registrar's or co-registrar's
written request accompanied by an equal principal amount of
Securities to be cancelled and, if the Security Registrar is not the
Trustee, the Security Registrar shall provide to the Trustee an
opinion of counsel acceptable to the Trustee and the Company to the
effect that the Security Registrar has received all of the
instruments and documents required by this Section 307 for such
transfer or exchange.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
(iii) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Security Registrar or any co-registrar may deem and treat the
person in whose name a Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of
and interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Security Registrar or any co-registrar
shall be affected by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same
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benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
(d) No Obligation of the Trustee.
(i) The Trustee (whether in its capacity as
trustee, Security Registrar or Paying Agent) shall have no
responsibility or obligation to any beneficial owner of any Global
Security, a member of, or a participant in the Depositary or other
Person with respect to the accuracy of the records of the Depositary
or its nominee or of any participant or member thereof, with respect
to any ownership interest in the Securities of any series or with
respect to the delivery to any participant, member, beneficial owner
or other Person (other than the Depositary) of any notice (including
any notice of redemption) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depositary or its nominee in
the case of a Global Security). The rights of beneficial owners in
the Global Securities shall be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Trustee (whether in its capacity as trustee, Security Registrar or
Paying Agent) may rely and shall be fully protected in relying upon
information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) The Trustee (whether in its capacity as trustee,
Security Registrar or Paying Agent) shall have no obligation or duty
to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Inde ture or under
applicable law, regulations or exchange rules with respect to any
transfer of any interest in any Security (including any transfers
between or among Depositary participants, members or beneficial
owners in the Global Securities), other than to require delivery of
such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
(e) Each Global Security will also bear the following
legend:
"This Security is issued in global form and
registered in the name of the Depositary or a nominee thereof. Unless
and until it is exchanged in whole or in part for Securities in
definitive form in accordance with the terms hereof and of the
Indenture referred to on the
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reverse hereof, this Security may not be transferred except 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, or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of the
Depositary to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the
name of the Depositary or its nominee and any payment is made to the
Depositary or its nominee, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof has an interest herein."
(f) CUSIP Numbers. The Company in issuing Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption or repurchase as a convenience to
Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Securities
or as contained in any notice of a redemption or repurchase and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected by any
defect in or omission of such numbers.
SECTION 308. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
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Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this
Section 308 in lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 308 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 309. Temporary Securities and Certificated
Securities.
(a) Until Certificated Securities for any series are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of Certificated Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Certificated Securities of
such series and deliver them in exchange for temporary Securities of such
series.
(b) The Global Security or Securities of any series
deposited with the Depositary or with the Trustee as custodian for the
Depositary pursuant to Section 201 shall be transferred to the beneficial
owners thereof in the form of certificated Securities of the same series in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Securities, only if such transfer
complies with Section 307 and (i) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for such Global Security or
if at any time such Depositary ceases to be a "clearing agency" registered
under the Exchange Act and a successor depositary is not appointed by the
Company within 90 days of such notice, (ii) a Default has occurred and is
continuing or (iii) the Company, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of certificated Securities
under this Indenture.
(c) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred,
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in whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Securities, an equal aggregate principal amount of Securities of the same
series of authorized denominations. Any portion of the Global Securities
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depositary shall direct.
(d) Subject to the provisions of Section 309(c), the
registered Holder of the Global Security may grant proxies and otherwise
authorize any Person, including agent members, participants and Persons that
may hold interests through agent members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 309(b), the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in fully registered
form.
SECTION 310. Payment of Interest; Interest Rights Preserved.
Interest on any Security that is payable and is punctually
paid or duly provided for on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series that is payable
but is not punctually paid or duly provided for on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security of such
series and the date of the proposed payment and at the same time the
Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the 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
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entitled to such Defaulted Interest as provided in this clause.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest that shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
given to each Holder of Securities of such series in the manner
specified in Section 106 not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so given,
such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest
on Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 311. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 310) interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
SECTION 312. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any Offer to
Purchase pursuant to Section 1013 or 1015 shall, if
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surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder that the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 312, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee
shall be disposed of as directed by a Company Order; provided that the Trustee
shall not be required to destroy cancelled Securities.
SECTION 313. Computation of Interest.
Interest on the Securities of any series shall be computed
on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with
respect to any series of Securities specified by the Company and the Trustee,
on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(1) no Securities of such series remain Outstanding;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company as to such series; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture pursuant to this Article Four, (i) the obligations of the Company to
the Trustee under Section 607, the obligations of the Company to any
Authenticating Agent under Section 614 and (ii) if the Company shall have
effected a Defeasance pursuant to Article Twelve, the provisions hereof
specified in Section 1202 shall also survive.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", means, wherever used herein with respect
to any particular series of Securities, any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its maturity (whether at
final Stated Maturity or upon repurchase, acceleration, optional
redemption or otherwise); or
(2) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(3) default in the purchase of Securities of that series, on
the applicable Purchase Date, required to be purchased by the Company
pursuant to an Offer to Purchase under Section 1013 or Section 1015
as to which an offer has been mailed to Holders or the failure to
make such offer as required hereunder; or
(4) default in the performance, or breach, of any covenant,
agreement or warranty of the Company in this Indenture and the
Securities of that series (other than a covenant, agreement or
warranty a default in whose performance or whose breach is elsewhere
in this Section 501 specifically dealt with), and continuance of such
default or breach for a period of 30 days after there has been given
to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25 percent in principal amount at final
Stated Maturity of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default or defaults under any bond, debenture, note or
other evidence of Debt by the Company or any Significant Subsidiary
(or under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Debt by
the Company or any Significant Subsidiary) (other than Non-Recourse
Debt of Significant Subsidiaries) if either (x) such default results
from failure to pay principal of such Debt in excess of $25 million
when due after any applicable grace period or (y) as
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a result of such default, the maturity of such Debt has been
accelerated prior to its scheduled maturity and such default has not
been cured within the applicable grace period, and such acceleration
has not been rescinded, and the principal amount of such Debt,
together with the principal amount of any other Debt of the Company
and its Significant Subsidiaries (not including Non-Recourse Debt of
the Significant Subsidiaries) that is in default as to principal, or
the maturity of which has been accelerated, aggregates $25 million or
more; or
(6) the entry by a court of one or more judgments or orders
against the Company or any Significant Subsidiary for the payment of
money that in aggregate exceeds $25 million (excluding the amount
thereof covered by insurance or by a bond written by a Person other
than an Affiliate of the Company), which judgments or orders have not
been vacated, discharged or satisfied or stayed pending appeal within
60 days from the entry thereof, provided that such a judgment or
order shall not be an Event of Default if such judgment or order does
not require any payment by the Company or any Significant Subsidiary,
except to the extent that such judgment is only against Property that
secures Non-Recourse Debt that is otherwise permitted under this
Indenture, and the Company could, at the expiration of the applicable
60 day period, after giving effect to such judgement or order and the
consequences thereof, Incur at least $1 of Debt under the provisions
described in Section 1008(a); or
(7) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under the
Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state, or foreign bankruptcy, insolvency,
or other similar law or (B) a decree or order adjudging the Company
or any Significant Subsidiary a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, State or
foreign bankruptcy, insolvency, or similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Subsidiary
or of any substantial part of the Property or assets of the Company
or any Significant Subsidiary, or ordering the winding up or
liquidation of the affairs of the Company or any Significant
Subsidiary, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
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(8) (A) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state, or foreign bankruptcy, insolvency or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or (B) the consent by the Company or any
Significant Subsidiary to the entry of a decree or order for relief
in respect of the Company or any Significant Subsidiary in an
involuntary case or proceeding under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal, state,
or foreign bankruptcy, insolvency, or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against the Company or any Significant Subsidiary, or (C) the filing
by the Company or any Significant Subsidiary of a petition or answer
or consent seeking reorganization or relief under the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law, or (D) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the Property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors, or (E) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due, or (F) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of any
such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time outstanding (other than an Event of Default specified in
Section 501(7) or (8)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25 percent in principal amount at
Stated Maturity of the Outstanding Securities of that series may declare the
Default Amount of all the Outstanding Securities of that series to be due and
payable immediately by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such Default Amount shall
become immediately due and payable. If an Event of Default specified in
Section 501(7) or (8) occurs, the Default Amount of the Securities of that
series then Outstanding shall ipso facto become immediately due and payable
without any declaration or other Act on the part of the Trustee or any Holder.
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At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article Five provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series
(without duplication of any amount thereof paid or deposited pursuant
to clause (B) or (C) below),
(B) the Default Amount of (and premium, if any, on) any
Securities of that series that have become due otherwise than by such
declaration of acceleration (including any securities of such series
required to have been purchased on any Purchase Date pursuant to an
Offer to Purchase made by the Company) and, to the extent that
payment of such interest is lawful, interest thereon at the rate
provided by the Securities of such series (without duplication of any
amount thereof paid or deposited pursuant to clause (A) above or
clause (C) below),
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided by the Securities
of such series (without duplication of any amount thereof paid or
deposited pursuant to clause (A) or (B) above), and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:
(1) default is made in the payment of any interest on any
Security of any series when such interest becomes due and payable and
such default continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (or
premium, if any, on) any Security of any series at the final Stated
Maturity thereof or, with respect to any Security required to have
been purchased pursuant to an Offer to Purchase made by the Company,
at the Purchase Date thereof,
the Company shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities of such series, the whole amount then due and
payable on such Securities' principal, premium, if any, and interest, and, to
the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal, premium, if any, and overdue interest, at
the rate provided by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
of such 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 any other obligor
upon the Securities of such series, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of
any judicial proceeding relative to the Company (or any other obligor upon the
Securities), its Property or assets or its creditors, the Trustee
(irrespective of whether the principal,(premium, if any) or interest of the
Securities of any series then shall be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee has made
any demand on the Company for the payment of overdue principal, (premium, if
any) or interest shall be entitled and empowered, by intervention in such
proceeding or otherwise, to file such proofs of claim and other papers or
documents and to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders of the Securities of such series
and the Trustee (including any claim for reasonable
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compensation, expenses, disbursements and advances of the Trustee, its agents
or counsel) allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder
of the 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 the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
607. To the extent that payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
amounts due the Trustee under Section 607 hereof out of the estate in any such
proceeding shall be denied for any reason, payment of the same shall be
secured by a Lien and shall be paid out of any and all distributions,
dividends, money, securities and other properties that the Holders of the
Securities of such series may be entitled to receive in such proceedings
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of any series or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding; provided that the Trustee may, on behalf of the Holders, vote
for the election of a trustee in bankruptcy or similar official and be a
member of a creditors or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article Five shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest, upon presentation of the Securities and the notation thereon of
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the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid on
the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities
in respect of principal (and premium, if any) and interest; and
THIRD: To whosoever may be lawfully entitled thereto, the
remainder, if any.
SECTION 507. Limitation on Suits. No Holder of any Security
of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25 percent in principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
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SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive full payment of the principal, of (and premium,
if any) and (subject to Section 310) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption on the Redemption Date or in the case of an Offer to Purchase made
by the Company and accepted as to such Security, on the Purchase Date) in
accordance with the terms of this Indenture and the Securities and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 308, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article Five or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders. The Holders of a majority
in principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the
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Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the Outstanding Securities may on
behalf of the Holders of all the Securities waive any past default hereunder
and its consequences, except a default
(1) in the payment of the principal of (or premium, if any)
or interest on any Security (including any Security that is required
to have been purchased pursuant to an Offer to Purchase that has been
made by the Company), or
(2) in respect of a covenant or provision hereof that under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as
Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any
such party litigant, in the manner and to the extent provided in the Trust
Indenture Act.
SECTION 515. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. (a) The
duties and responsibilities of the Trustee shall be as provided by the Trust
Indenture Act. Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.
(b) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon 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
requirements of this Indenture but need not confirm the accuracy of
any calculations contained therein.
(c) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the 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.
(d) 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) this subsection (d) shall not be construed to limit the
effect of subsections (b) or (c) of this Section 601;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(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 a majority in principal amount
of the Outstanding Securities of any series relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 602. Notice of Defaults; Notice of Acceleration.
Within 90 days after the occurrence of any Default or Event of Default with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register,
notice of such Default or Event of Default known to the Trustee, unless such
Default or Event of Default shall have been cured or waived; provided that,
except in the case of a default in any payment of the principal of (or
premium, if any) or interest on any Security of such series and any payment
required in connection with a Change of Control or an Asset Disposition, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or the trust committee corporate
or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders of the Securities
of such series; and provided further that in the case of any Default or Event
of Default of the character specified in Section 601(5) with respect to the
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof.
SECTION 603. Certain Rights of Trustee. Subject to the
provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, order, demand or direction of the Company
mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled (subject to reasonable confidentiality arrangements as may
be proposed by the Company) to examine the books, records and premises of the
Company, personally or by agent or attorneys;
(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; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
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SECTION 605. May Hold Securities. The Trustee, any
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 607. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel) except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee in its individual capacity and
each of its officers, directors, agents and counsel for, and to hold
it harmless against, any loss, damage, claim, liability or expense
incurred without negligence or bad faith on such Person's part,
arising out of or in connection with the acceptance or administration
of this Indenture or the performance of any of its powers and duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder and complying
with any process served upon the Trustee or any such other Person
hereunder.
The Trustee shall have a Lien prior to the Securities with
respect to all Property and funds held or collected by the Trustee hereunder
for any amount owing to it pursuant to this Section 607, except with respect
to funds held in trust for the benefit of the Holders of particular
Securities.
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When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7) or Section
501(8), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The Company's obligations under this Section 607 and any
Lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's obligations pursuant to Article
Eleven, any rejection or termination of the Indenture under any Federal or
state bankruptcy, insolvency or other similar law or any other termination of
this Indenture.
SECTION 608. Conflicting Interests. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture. There shall be excluded from the operation
of this Section 608 (i) the Indenture dated as of March 24, 1994, between the
Company and IBJ Schroder Bank & Trust Company, as trustee, governing the
Company's 10 1/4% Senior Discount Notes due 2004, and (ii) the Indenture dated
as of September 20, 1996, between the Company and IBJ Schroder Bank & Trust
Company, as trustee, governing the Company's 9 1/2% Senior Notes due 2006.
SECTION 609. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder that shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000 and its Corporate Trust Office in
the Borough of Manhattan, The City of New York and shall be subject to
supervision or examination by Federal or State authority. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 609 and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 509, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Six.
SECTION 610. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article Six shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
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(b) The Trustee may resign at any time with respect to
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee in accordance
with the applicable requirements of Section 611 shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to
the Securities of one or more series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee with respect
to the Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of
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Section 611, become the successor Trustee and supersede the successor Trustee
with respect to the Securities of such series appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in
accordance with the applicable requirements of Section 611, any Holder who has
been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give written notice of each
resignation and each removal of the Trustee with respect to the Securities of
any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee with respect to
the Securities of such Series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of any amounts then due under Section 607, 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, subject, nevertheless, to its Lien, if any, provided for in Section
607.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture
supplemental hereto, pursuant to Article Nine hereof, wherein each successor
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and
to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be 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 and 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 upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and
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duties of the retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
(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.
(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.
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be otherwise qualified and eligible under
this Article Six, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any 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 Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a
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creditor of the Company (or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company (or any such other
obligor).
SECTION 614. Appointment of Authenticating Agent. The
Trustee may from time to time appoint an Authenticating Agent or Agents with
respect to one or more series of Securities that shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption or partial purchase or pursuant to Section 308, and 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. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 614, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 614.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent. In case any Securities shall have been authenticated, but not
delivered, by the Authenticating Agent then in office, any successor by
merger, conversion or consolidation to such authenticating Authenticating
Agent may adopt such authentication and deliver the Securities so
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authenticated with the same effect as if such successor Authenticating Agent
had itself authenticated such Securities.
An Authenticating Agent for any series of Securities may
resign at any time by giving written notice thereof to the Trustee for such
series and to the Company. The Trustee for any series of Securities may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, the Trustee for such series may appoint a
successor Authenticating Agent that shall be acceptable to the Company and
shall give notice of such appointment in the manner provided in Section 106,
to all Holders of Securities of the series as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 614.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section 614, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities of the series referred to in
the within-mentioned Indenture.
Dated:
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By _______________________,
As Authenticating Agent
By _______________________,
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders. The Company shall furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date for interest for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date, 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;
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to the names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee. (a) Within 60 days after
May 15 of each year commencing with the May 15 following the Issue Date, the
Trustee shall transmit to Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust
Indenture Act in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company shall notify the Trustee in writing when the Securities are listed on
any stock exchange.
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SECTION 704. Reports by Company. The Company shall file with
the Trustee and the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed with the Trustee within 15 days after the same
is so required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain
Terms. The Company shall not, in any transaction or series of transactions,
consolidate with or merge into any other Person, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the
Property and assets of the Company to any other Person, unless:
(i) either (a) the Company shall be the continuing
corporation or (b) the corporation (if other than the
Company) formed by such consolidation or into which the
Company is merged, or the Person that acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all
or substantially all of the Property and assets of the
Company (such corporation or Person, the "Surviving
Entity"), shall be a corporation organized and validly
existing under the laws of the United States of America, any
political subdivision thereof or any state thereof or the
District of Columbia, and shall expressly assume, by a
supplemental indenture, the due and punctual payment of the
principal of (and premium, if any) and interest on all the
Securities and the performance of the Company's covenants
and obligations under this Indenture;
(ii) immediately before and immediately after
giving effect to such transaction or series of transactions
on a pro forma basis (including, without limitation, any
Debt Incurred or anticipated to be Incurred in connection
with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have
occurred and be continuing or would result therefrom;
(iii) immediately after giving effect to any such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Debt Incurred or
anticipated to be Incurred in connection with or in respect
of such transaction or series of transactions)
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as if such transaction or series of transactions had
occurred on the first day of the determination period, the
Company (or the Surviving Entity if the Company is not
continuing) would be permitted to Incur $1.00 of additional
Debt pursuant to Section 1008(a); and
(iv) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Debt Incurred or
anticipated to be Incurred in connection with or in respect
of such transaction or series of transactions) (without
giving effect to the fees and expenses incurred in respect
of such transaction), the Company (or the Surviving Entity
if the Company is not continuing) shall have a Net Worth
equal to or greater than the Net Worth of the Company
immediately prior to such transaction.
In connection with any consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition contemplated by
the foregoing provisions of this Section 801, the Company shall deliver, or
cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, conveyance,
assignment, transfer, lease or other disposition and the indenture
supplemental hereto in respect thereof (to the extent required under clause
(i) of this Section 801) comply with the requirements of this Indenture. Each
such Officers' Certificate shall set forth the ability to Incur Debt in
accordance with clause (iii) of Section 801.
None of the Company, any of its Restricted Subsidiaries or
any Eligible Joint Ventures may merge with or into, or be consolidated with,
an Unrestricted Subsidiary of the Company, except to the extent that such
Unrestricted Subsidiary has been designated a Restricted Subsidiary as
provided in this Indenture in advance of or in connection with such merger.
For all purposes of this Indenture and the Securities
(including this Section 801 and Sections 1008, 1009 and 1012), Subsidiaries of
any Surviving Entity shall, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries as provided
pursuant to this Indenture and all Debt, and all Liens on Property or assets,
of the Surviving Entity and its Subsidiaries that was not Debt, or were not
Liens on Property or assets, of the Company and its Subsidiaries immediately
prior to such transaction or series of transactions shall be deemed to have
been Incurred upon such transaction or series of transactions.
SECTION 802. Successor Substituted. Upon any transaction or
series of transactions that are of the type described in, and are effected in
accordance with, Section 801,
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the Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein;
and when a Surviving Person duly assumes all of the obligations and covenants
of the Company pursuant to this Indenture and the Securities, except in the
case of a lease, the predecessor Person shall be relieved of all such
obligations.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by
or pursuant to a Board Resolution, may, and subject to Section 903, the
Trustee, at any time and from time to time, shall, enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series), or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit
of the Holders of all or any series of Securities (and if such Events
of Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right of
the Holders of a majority in aggregate principal amount of that or
those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to provide for uncertificated Securities in addition to
or in place of the certificated Securities; or
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(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is not Outstanding any Security of any
series created prior to the execution of such supplemental indenture
that is entitled to the benefit of such provision; or
(6) to evidence and provide for the acceptance of
appointment under this Indenture by a successor Trustee with respect
to the Securities of one or more series and to 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; or
(7) to secure the Securities pursuant to the requirements of
Section 1012 or otherwise; or
(8) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture (8), provided that
such actions pursuant to this clause shall not adversely affect the
interests of the Holders of Securities of any series; or
(9) to comply with any requirements of the Commission in
order to effect and maintain the qualification of this Indenture
under the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by or
pursuant to a Board Resolution, may, and (subject to Section 903) the Trustee
shall, enter into an indenture or indentures supplemental hereto, in form
satisfactory to the Trustee, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders under this Indenture;
provided that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of or any
installment of interest on, any Security, or reduce the principal
amount thereof at or the rate of interest thereon or any premium
payable thereon, reduce any amount payable on redemption or purchase
thereof, or reduce the Default Amount that would be due and payable
on acceleration of the Stated Maturity thereof pursuant to Section
502, or change the place of payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable,
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or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify the obligations of the Company to make Offers to
Purchase from the Excess Proceeds of Asset Dispositions or upon a
Change of Control or to modify the definitions related thereto, or
(4) subordinate a right of payment, or otherwise
subordinate, the Securities to any other indebtedness, or
(5) modify any of the provisions of this Section 902,
Section 513 or Section 1020, except to increase any such percentage
or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section 802 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Securities of any
other series.
After a supplemental indenture under this Section becomes
effective, the Company shall mail to the Holders of any series of Securities
affected thereby a notice briefly describing the supplemental indenture. Any
failure of the Company to mail such notice, or any default therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
In connection with any supplemental indenture or waiver
under this Article Nine, the Company may, but shall not be obligated to, offer
to any Holder who consents to such supplemental indenture, or to all Holders,
consideration for such Holder's consent to such supplemental indenture.
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SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but 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.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article Nine, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby, unless it makes a change described in any of
clauses (1) through (6) of Section 902, in which case, the supplemental
indenture shall bind only each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same Debt as the consenting Holder's Security; provided that any
such waiver shall not impair or affect the right of any Holder to receive
payment of principal and premium of and interest on a Security, on or after
the respective dates set for such amounts to become due and payable, or to
bring suit for the enforcement of any such payment on or after such respective
dates.
SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article Nine may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series. Any failure to make the appropriate notation on a
new Security shall not affect the validity of such Security.
ARTICLE TEN
COVENANTS
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SECTION 1001. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of (and premium, if
any) and interest on the Securities of each series in accordance with the
terms of such series of Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency. The Company
shall maintain in the Borough of Manhattan, The City of New York, an office or
agency where Securities of any series may be presented or surrendered for
payment, where Securities of any series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of any series and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands. In
the event any such notice or demands are so made or served on the Trustee, the
Trustee shall promptly forward copies thereof to the Company.
The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan, The City of
New York) where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, in accordance with
the requirements for Securities of any series, or set forth herein, for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby initially designates for each
series of Securities, the Corporate Trust Office of the Trustee as such office
of the Company.
SECTION 1003. Money for Security Payments to be Held in
Trust. If the Company shall at any time act as its own Paying Agent with
respect to any series of any Securities, it shall, on or before each due date
of the principal of (and premium, if any) or interest on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and shall promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents
for any series, it shall, prior to each due date of the
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principal of (and premium, if any) or interest on any Securities of that
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held as provided
by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 1003, that such Paying Agent shall (i) comply with the provisions of
the Trust Indenture Act applicable to it as Paying Agent, (ii) give the
Trustee notice of any default by the Company (or other obligor upon the
Securities) in the making of any payment of principal of (and premium, if any)
or interest in respect of the Securities and (iii) during the continuance of
any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request
of the Trustee, forthwith pay to the Trustee all sums held in trust by such
Paying Agent as such.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any 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 trusts 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.
Except as otherwise provided in the Securities of any
series, any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, or mail to
such Holder, or both, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date
of such publication, any unclaimed balance of such money then remaining shall
be repaid to the Company.
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SECTION 1004. Existence. Subject to Article Eight, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights (charter and
statutory) and material franchises; provided that the Company shall not be
required to preserve any such right or franchise if the Board of Directors in
good faith shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof does not materially adversely affect the Holders.
SECTION 1005. Maintenance of Properties. The Company shall
cause all material properties used or useful in the conduct of its business or
the business of any Restricted Subsidiary and any Eligible Joint Venture to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times; provided that nothing in this Section 1005 shall prevent the Company
from discontinuing the operation or maintenance of any of such material or
properties or, subject to the provisions of Section 1015, disposing of any of
them if such discontinuance or disposal is, as determined by the Company in
good faith, desirable in the conduct of its business or the business of any
Restricted Subsidiary and does not materially adversely affect the Holders,
provided that the Restricted Subsidiaries and the Eligible Joint Ventures of
the Company shall not be required to comply with the forgoing provisions of
this Section 1005 if they are prevented or restricted in doing so by the terms
of any loan or financing agreement, any charter document, partnership or joint
venture agreement or any other agreement or instrument, all of which are
expressly acknowledged to take precedence over the terms hereof.
SECTION 1006. Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (1) all taxes, assessments and governmental charges
levied or imposed upon the Company or any of its Restricted Subsidiaries or
upon the income, profits or property of the Company or any of its Restricted
Subsidiaries, and (2) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of the Company
or any of its Restricted Subsidiaries; provided that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been accrued to the extent required by GAAP.
SECTION 1007. Maintenance of Insurance. The Company shall,
and shall cause its Restricted Subsidiaries and the
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Eligible Joint Ventures to, keep at all times all of their Properties that are
of an insurable nature insured against loss or damage with insurers believed
by the Company to be responsible to the extent that Property of similar
character is usually so insured by Persons similarly situated and owning like
Properties in accordance with good business practice. The Company shall, and
shall cause its Restricted Subsidiaries and the Eligible Joint Ventures to,
use the proceeds from any such insurance policy to repair, replace or
otherwise restore all material Properties to which such proceeds relate,
provided that the Company shall not be required to repair, replace or
otherwise restore any such material Property if the Company in good faith
determines that such inaction is desirable in the conduct of the business of
the Company or any Restricted Subsidiary and does not materially adversely
affect the Holders, and provided further that the Company (only in respect of
agreements governing its Non-Recourse Debt), the Restricted Subsidiaries and
the Eligible Joint Ventures of the Company shall not be required to apply
insurance proceeds to repair, replace or restore any material Property if they
are prevented or restricted in doing so by the terms of any loan or financing
agreement, any charter document, partnership or joint venture agreement or any
other agreement or instrument, all of which are expressly acknowledged to take
precedence over the terms hereof.
The Company may, and may permit its Restricted Subsidiaries
and Eligible Joint Ventures to, adopt such other plan or method of protection,
in lieu of or supplemental to insurance with insurers, whether by the
establishment of an insurance fund or reserve to be held and applied to make
good losses from casualties, or otherwise, conforming to the system of
self-insurance maintained by Persons similarly situated and owning like
Properties and which does not materially adversely affect the Holders, as may
be determined by the Company in good faith.
SECTION 1008. Limitation on Debt. (a) The Company shall not
Incur any Debt, including Acquisition Debt, unless, after giving effect to the
Incurrence of such Debt and the receipt and application of the proceeds
therefrom, the Fixed Charge Ratio of the Company would be equal to or greater
than 2.0 to 1.
(b) Notwithstanding the provisions of Section 1008(a), the
Company may Incur each and all of the following: (i) Company Refinancing Debt,
(ii) Debt of the Company to any of its Restricted Subsidiaries or any Eligible
Joint Venture that is expressly subordinated in right of payment to the
Securities of all series, provided that any transfer of such Debt by a
Restricted Subsidiary or an Eligible Joint Venture (other than to another
Restricted Subsidiary or another Eligible Joint Venture), or any transfer of
the Company's ownership interest, or a portion thereof, in such Restricted
Subsidiary or such Eligible Joint Venture or the interest, or a portion
thereof, of Kiewit in a
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Permitted Joint Venture or an Eligible Joint Venture (which transfer has the
effect of causing such Restricted Subsidiary or such Eligible Joint Venture to
cease to be a Restricted Subsidiary or an Eligible Joint Venture, as the case
may be), shall be deemed to be an Incurrence of Debt that is subject to the
provisions of this Section 1008 other than this clause (ii), (iii) Debt in an
aggregate principal amount not to exceed $100 million outstanding at any one
time may be issued under or in respect of Permitted Working Capital
Facilities, (iv) Non-Recourse Debt Incurred in respect of one or more
Permitted Facilities in which the Company has a direct or indirect interest,
(v) Debt in respect of Currency Protection Agreements or Interest Rate
Protection Agreements, (vi) Purchase Money Debt, provided that the amount of
such Debt (net of any original issue discount) does not exceed 90% of the fair
market value of the Property acquired, (vii) the Securities and other Debt
outstanding as of the Issue Date of the Securities (other than Debt to the
extent that it is extinguished, retired, defeased or repaid in connection with
the original issuance of the Securities), including Debt that is Incurred in
respect of interest or discount on such Debt (or Redeemable Stock issued as
dividends in respect of Redeemable Stock) pursuant to the terms of the
agreement or instrument that governs such Debt (or such Redeemable Stock) as
in effect on the Issue Date of the Securities and (viii) Debt in an aggregate
principal amount not to exceed $75 million outstanding at any one time.
SECTION 1009. Limitation on Subsidiary Debt. (a) The Company
shall not permit any of its Restricted Subsidiaries or any Eligible Joint
Venture, to Incur any Debt.
(b) Notwithstanding the provisions of Section 1009(a), each
and all of the following Debt may be Incurred by a Restricted Subsidiary or an
Eligible Joint Venture: (i) Debt outstanding as of the Issue Date of the
Securities, (ii) Debt owed by a Restricted Subsidiary or an Eligible Joint
Venture to the Company or another Restricted Subsidiary of the Company or
another Eligible Joint Venture that either directly or indirectly owns all or
a portion of the Company's interest in, or directly or indirectly is owned by,
such Restricted Subsidiary or such Eligible Joint Venture, as the case may be,
and that does not own any Permitted Facility or a direct or indirect interest
therein, other than the Permitted Facility or any other Permitted Facility
that is located on the same localized geothermal reservoir or a direct or
indirect interest therein owned by such Restricted Subsidiary or Eligible
Joint Venture, (iii) Non-Recourse Debt Incurred in respect of one or more
Permitted Facilities, provided that such Restricted Subsidiary or such
Eligible Joint Venture has a direct or indirect interest (which may include
Construction Financing provided by the Company to the extent permitted under
Section 1010 as a "Permitted Investment") in one or more of such Permitted
Facilities in respect of which one or more Restricted Subsidiaries or Eligible
Joint Ventures shall have a direct or indirect interest, (iv) Subsidiary
Refinancing Debt, (v) Acquired
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Debt, (vi) Debt in respect of Currency Protection Agreements or Interest Rate
Protection Agreements, (vii) Permitted Funding Company Loans and (viii)
Permitted Facilities Debt, provided that at the time of Incurrence thereof and
after giving effect to the application of the proceeds thereof, the aggregate
principal amount of Permitted Facilities Debt shall not exceed 15% of total
consolidated Debt of the Company computed in accordance with GAAP.
SECTION 1010. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries or
any Eligible Joint Venture to, directly or indirectly, make any Restricted
Payment unless at the time of such Restricted Payment and after giving effect
thereto (a) no Event of Default and no event that, after the giving of notice
or lapse of time or both, would become an Event of Default, has occurred and
is continuing, (b) the Company could Incur at least $1 of Debt under Section
1008 and (c) the aggregate amount of all Restricted Payments made by the
Company, its Restricted Subsidiaries and the Eligible Joint Ventures (the
amount so made, if other than in cash, to be determined in good faith by the
Chief Financial Officer, as evidenced by an Officers' Certificate, or, if more
than $30 million, by the Board of Directors, as evidenced by a Board
resolution) after March 24, 1994, is less than the sum (without duplication)
of (i) 50% of the Adjusted Consolidated Net Income of the Company for the
period (taken as one accounting period) beginning on the first day of the
first fiscal quarter that begins after March 24, 1994 and ending on the last
day of the fiscal quarter immediately prior to the date of such calculation,
provided that if throughout any fiscal quarter within such period the Ratings
Categories applicable to the Securities are rated Investment Grade by S&P and
Moody's (or if both do not make a rating of the Securities publicly available,
an equivalent Rating Category is made publicly available by another Rating
Agency), then 100% (instead of 50%) of the Adjusted Consolidated Net Income
(if more than zero) with respect to such fiscal quarter shall be included
pursuant to this clause (i), and provided further that if Adjusted
Consolidated Net Income for such period is less than zero, then minus 100% of
the amount of such net loss, plus (ii) 100% of the aggregate net cash proceeds
received by the Company from and after March 24, 1994 from (A) the issuance
and sale (other than to a Restricted Subsidiary or an Eligible Joint Venture)
of its Capital Stock (excluding Redeemable Stock, but including Capital Stock
other than Redeemable Stock issued upon conversion of, or in exchange for
Redeemable Stock or securities other than its Capital Stock), (B) the issuance
and sale or the exercise of warrants, options and rights to purchase its
Capital Stock (other than Redeemable Stock) and (C) the issuance and sale of
convertible Debt upon the conversion of such convertible Debt into Capital
Stock (other than Redeemable Stock), but excluding the net proceeds from the
issuance, sale, exchange, conversion or other disposition of its Capital Stock
(I) that is convertible (whether at the option of the Company or the holder
thereof or
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upon the happening of any event) into (x) any security other than its Capital
Stock or (y) its Redeemable Stock or (II) that is Capital Stock referred to in
clauses (ii) and (iii) of the definition of "Permitted Payment", plus (iii)
the net reduction in Investments of the types specified in clauses (iv) and
(v) of the definition of "Restricted Payment" that result from payments of
interest on Debt, dividends, or repayment of loans or advances, the proceeds
of the sale or disposition of the Investment or other return of the amount of
the original Investment to the Company, the Restricted Subsidiary or the
Eligible Joint Venture that made the original Investment from the Person in
which such Investment was made, provided that (x) the aggregate amount of such
payments shall not exceed the amount of the original Investment by the Company
or such Restricted Subsidiary that reduced the amount available pursuant to
this clause (c) for making Restricted Payments and (y) such payments may be
added pursuant to this clause (iii) only to the extent such payments are not
included in the calculation of Adjusted Consolidated Net Income, provided
further that if Investments of the types specified in clauses (iv) and (v) of
the Definition of "Restricted Payment" have been made in any Person and such
Person thereafter becomes a Restricted Subsidiary or an Eligible Joint
Venture, then the aggregate amount of such Investment (to the extent that they
have reduced the amount available pursuant to this clause (c) for making
Restricted Payments), net of the amounts previously added pursuant to this
clause (iii), may be added to the amount available for making Restricted
Payments, plus (iv) an amount equal to the principal amount of Debt of the
Company extinguished in connection with the conversion into Common Stock of
the Company of the Company's 5% Convertible Subordinated Debentures due 2000
and its 9.5% Convertible Subordinated Debenture due 2003. The foregoing clause
(c) shall not prevent the payment of any dividend within 60 days after the
date of its declaration if such dividend could have been made on the date of
its declaration without violation of the provisions of this Section 1010(a).
(b) None of the Company, any of its Restricted Subsidiaries
or any Eligible Joint Venture shall be deemed to have made an Investment at
the time that a Person that is a Restricted Subsidiary of the Company or an
Eligible Joint Venture ceases to be a Restricted Subsidiary or an Eligible
Joint Venture (other than as a result of a Restricted Subsidiary being
designated as an Unrestricted Subsidiary), although any subsequent Investment
made by the Company, its Restricted Subsidiaries and Eligible Joint Ventures
in such Person shall be Investments that shall be subject to the foregoing
paragraph unless and until such time as such Person becomes a Restricted
Subsidiary or an Eligible Joint Venture. Notwithstanding the foregoing, (i)
the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, in
the manner provided in the definition of "Unrestricted Subsidiary," shall be
an Investment that shall be subject to the foregoing paragraph and (ii) the
transfer of the Company's interest (or portion thereof) in an entity that has
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been deemed to be an Eligible Joint Venture directly or indirectly to an
Unrestricted Subsidiary shall be an Investment (to the extent of the interest
transferred) that shall be subject to the foregoing paragraph.
SECTION 1011. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted Subsidiaries
or any Eligible Joint Venture to, directly or indirectly, conduct any business
or enter into or permit to exist any transaction or series of related
transactions (including, but not limited to, the purchase, sale or exchange of
Property, the making of any Investment, the giving of any Guarantee or the
rendering of any service) with any Affiliate of the Company, such Restricted
Subsidiary or such Eligible Joint Venture, as the case may be, unless (i) such
business, transaction or series of related transactions is in the best
interest of the Company, such Restricted Subsidiary or such Eligible Joint
Venture, (ii) such business, transaction or series of related transactions is
on terms no less favorable to the Company, such Restricted Subsidiary or such
Eligible Joint Venture than those that could be obtained in a comparable arm's
length transaction with a Person that is not such an Affiliate and (iii) with
respect to such business, transaction or series of related transactions that
has a fair market value or involves aggregate payments equal to, or in excess
of, $10 million, such business, transaction or series of transactions is
approved by a majority of the Board of Directors (including a majority of the
Disinterested Directors), which approval is set forth in a Board Resolution
delivered to the Trustee certifying that, in good faith, the Board of
Directors believes that such business, transaction or series of transactions
complies with clauses (i) and (ii) above.
SECTION 1012. Limitation on Liens. The Company may not Incur
any Debt that is secured, directly or indirectly, with, and the Company shall
not, and shall not permit any of its Restricted Subsidiaries or any Eligible
Joint Venture to, grant a Lien on the Property of the Company, its Restricted
Subsidiaries or any Eligible Joint Venture now owned or hereafter acquired
unless contemporaneous therewith or prior thereto the Securities are equally
and ratably secured except for (i) any such Debt secured by Liens existing on
the Property of any entity at the time such Property is acquired by the
Company, any of its Restricted Subsidiaries or any Eligible Joint Venture,
whether by merger, consolidation, purchase of such Property or otherwise,
provided that such Liens (x) are not created, incurred or assumed in
contemplation of such Property being acquired by the Company, any of its
Restricted Subsidiaries or any Eligible Joint Venture and (y) do not extend to
any other Property of the Company, any of its Restricted Subsidiaries or any
Eligible Joint Venture, (ii) any other Debt that is required by the terms
thereof to be equally and ratably secured as a result of the Incurrence of
Debt that is permitted to be secured pursuant to another clause of this
Section 1012, (iii) Liens that are granted in good faith to
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secure Debt (A) contemplated by clause (iv) of Section 1008(b) or (B)
contemplated by clauses (ii), (iii), (vi) and (viii) of Section 1009(b),
provided that, in the case of Debt owed to a Person other than the Company or
a Restricted Subsidiary, the President or Chief Financial Officer of the
Company determines in good faith, as evidenced by an Officers' Certificate,
that such Liens are required in order to effect such financing and are not
materially more restrictive, taken as a whole, than Liens, taken as a whole,
customarily accepted (or in the absence of industry custom, reasonably
acceptable) in comparable financings or comparable transactions in the
applicable jurisdiction, (iv) Liens existing on the Issue Date of the
Securities, (v) Liens incurred to secure Debt incurred by the Company as
permitted by clause (vi) of Section 1008(b), provided that such Liens may not
cover any Property other than that being purchased and improvements and
additions thereto, (vi) Liens on any Property of the Company securing
Permitted Working Capital Facilities, Guarantees thereof and any Interest Rate
Protection Agreements or Currency Protection Agreements, provided that such
Liens may not extend to the Capital Stock owned by the Company in any
Restricted Subsidiary of the Company or any Eligible Joint Venture, (vii)
Liens in respect of extensions, renewals, refundings or refinancings of any
Debt secured by the Liens referred to in the foregoing clauses, provided that
the Liens in connection with such renewal, extension, refunding or refinancing
shall be limited to all or part of the specific property that was subject to
the original Lien, (viii) Liens incurred to secure obligations in respect of
letters of credit, bankers' acceptances, surety, bid, operating and
performance bonds, performance guarantees or other similar instruments or
obligations (or reimbursement obligations with respect thereto)(in each case,
to the extent incurred in the ordinary course of business), (ix) any Lien
arising by reason of (A) any judgment, decree or order of any court, so long
as such Lien is being contested in good faith and is appropriately bonded, and
any appropriate legal proceedings that may have been duly initiated for the
review of such judgment, decree or order have not been finally terminated or
the period within which such proceedings may be initiated has not expired, (B)
taxes, duties, assessments, imposts or other governmental charges that are not
yet delinquent or are being contested in good faith, (C) security for payment
of worker's compensation or other insurance, (D) security for the performance
of tenders, contracts (other than contracts for the payment of money) or
leases, (E) deposits to secure public or statutory obligations, or to secure
permitted contracts for the purchase or sale of any currency entered into in
the ordinary course of business, (F) the operation of law in favor of
carriers, warehousemen, landlords, mechanics, materialmen, laborers, employees
or suppliers, incurred in the ordinary course of business for sums that are
not yet delinquent or are being contested in good faith by negotiations or by
appropriate proceedings that suspend the collection thereof, (G) easements,
rights-of-way, zoning and similar covenants and restrictions and other similar
encumbrances or title defects that
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do not in the aggregate materially interfere with the ordinary conduct of the
business of the Company, any of its Restricted Subsidiaries or any Eligible
Joint Venture or (H) leases and subleases of real property that do not
interfere with the ordinary conduct of the business of the Company, any of its
Restricted Subsidiaries or any Eligible Joint Venture and that are made on
customary and usual terms applicable to similar properties, or (x) Liens, in
addition to the foregoing, that secure obligations not in excess of $5 million
in the aggregate.
SECTION 1013. Purchase of Securities Upon a Change of
Control. (a) Upon the occurrence of a Change of Control, each Holder of the
Securities of each series shall have the right to require that the Company
repurchase such Holder's Securities of such series at a purchase price in cash
equal to 101% of the principal thereof on the date of purchase plus accrued
interest, if any, to the date of purchase.
(b) Within 30 days following a Change of Control, the
Company shall mail a notice to each Holder of the Securities of each series,
with a copy to the Trustee, stating (1) that a Change of Control has occurred
and that such Holder has the right to require the Company to purchase such
Holder's Securities at the purchase price described in Section 1013(a) (the
"Change of Control Offer"), (2) the circumstances and relevant facts regarding
such Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control), (3) the purchase date (which shall be not earlier than 30
days nor later than 60 days from the date such notice is mailed) (the "Change
of Control Purchase Date"), (4) that interest on any such Security shall
continue to accrue, (5) any Security properly tendered pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Purchase Date (assuming sufficient moneys for the purchase thereof are
deposited with the Trustee), (6) that Holders electing to have a Security of
any series purchased pursuant to a Change of Control Offer shall be required
to surrender the Security of such series, with the form entitled "Option of
Holder To Elect Purchase" on the reverse of the Security completed, to the
paying agent at the address specified in the notice prior to the close of
business on the fifth Business Day prior to the Change of Control Purchase
Date, (7) that a Holder shall be entitled to withdraw such Holder's election
if the Paying Agent receives, not later than the close of business on the
third Business Day (or such shorter periods as may be required by applicable
law) preceding the Change of Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Securities of such series the Holder delivered for
purchase, and a statement that such Holder is withdrawing his election to have
such Securities of such series purchased and (8) that Holders that elect to
have their Securities of any series purchased only in part shall be issued new
Securities having a principal amount equal to the portion of
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the Securities of the series that were surrendered but not tendered and
purchased.
On the Change of Control Purchase Date, the Company shall
(i) accept for payment all Securities of any series or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the
Trustee money sufficient to pay the purchase price of all Securities of such
series or portions thereof so tendered for purchase and (iii) deliver or cause
to be delivered to the Trustee the Securities of such series properly tendered
together with an Officers' Certificate identifying the Securities of such
series or portions thereof tendered to the Company for purchase. The Trustee
shall promptly mail, to the Holders of the Securities of such series properly
tendered and purchased, payment in an amount equal to the purchase price, and
promptly authenticate and mail to each Holder a new Security of the same
series having a principal amount equal to any portion of such Holder's
Securities of such series that were surrendered but not tendered and
purchased. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control
Purchase Date.
If the Company is prohibited by applicable law from making
the Change of Control Offer or purchasing Securities of any series thereunder,
the Company need not make a Change of Control Offer pursuant to this Section
1013 for so long as such prohibition is in effect.
The Company shall comply with all applicable tender offer
rules, including, without limitation, Rule 14e-1 under the Exchange Act, in
connection with a Change of Control Offer.
SECTION 1014. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries. The Company shall not, and shall not
permit any of its Restricted Subsidiaries or any Eligible Joint Venture to,
create or cause to become, or as a result of the acquisition of any Person or
Property, or upon any Person becoming a Restricted Subsidiary or an Eligible
Joint Venture, remain subject to, any consensual encumbrance or consensual
restriction of any kind on the ability of any Restricted Subsidiary or any
Eligible Joint Venture to (a) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted Subsidiary
or such Eligible Joint Venture owned by the Company, any other Restricted
Subsidiary or any other Eligible Joint Venture, (b) make payments in respect
of any Debt owed to the Company, any other Restricted Subsidiary of the
Company or any Eligible Joint Venture, (c) make loans or advances to the
Company or to any other Restricted Subsidiary of the Company or any other
Eligible Joint Venture that is directly or indirectly owned by such Restricted
Subsidiary or such Eligible
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Joint Venture or (d) transfer any of its Property to the Company or to any
other Restricted Subsidiary or any other Eligible Joint Venture that directly
or indirectly owns or is owned by such Restricted Subsidiary or such Eligible
Joint Venture, other than those encumbrances and restrictions created or
existing (i) on the Issue Date of the Securities, (ii) pursuant to this
Indenture, (iii) in connection with the Incurrence of any Debt permitted under
the provisions described in clause (iii) of Section 1009(b), provided that, in
the case of Debt owed to Persons other than the Company, its Restricted
Subsidiaries and any Eligible Joint Venture, the President or the Chief
Financial Officer of the Company determines in good faith, as evidenced by an
Officers' Certificate, that such encumbrances or restrictions are required to
effect such financing and are not materially more restrictive, taken as a
whole, on the ability of the applicable Restricted Subsidiary or the
applicable Eligible Joint Venture to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through (d) of this Section
1014 than encumbrances and restrictions, taken as a whole, customarily
accepted (or, in the absence of any industry custom, reasonably acceptable) in
comparable financings or comparable transactions in the applicable
jurisdiction, (iv) in connection with the execution and delivery of an
electric power or thermal energy purchase contract, or other contract related
to the output or product of, or services rendered by one or more Permitted
Facilities to which such Restricted Subsidiary or such Eligible Joint Venture
is a supplying party or other contracts with customers, suppliers and
contractors to which such Restricted Subsidiary or such Eligible Joint Venture
is a party and where such Restricted Subsidiary or such Eligible Joint Venture
is engaged, directly or indirectly, in the development, design, engineering,
procurement, construction, acquisition, ownership, management or operation of
one or more of such Permitted Facilities, provided that the President or the
Chief Financial Officer of the Company determines in good faith, as evidenced
by an Officers' Certificate, that such encumbrances or restrictions are
required to effect such contracts and are not materially more restrictive,
taken as a whole, on the ability of the applicable Restricted Subsidiary or
the applicable Eligible Joint Venture to make the payments, distributions,
loans, advances or transfers referred to in clauses (a) through (d) of this
Section 1014 than encumbrances and restrictions, taken as a whole, customarily
accepted (or, in the absence of any industry custom, reasonably acceptable) in
comparable financings or comparable transactions in the applicable
jurisdiction, (v) in connection with any Acquired Debt, provided that such
encumbrance or restriction was not incurred in contemplation of such Person
becoming a Restricted Subsidiary or an Eligible Joint Venture and provided
further that such encumbrance or restriction does not extend to any other
Property of such Person at the time it became a Restricted Subsidiary or an
Eligible Joint Venture, (vi) in connection with the Incurrence of any Debt
permitted under clause (iv) of Section 1009(b), provided that, in the case of
Debt owed to Persons other than the Company and its Restricted Subsidiaries,
the President or the Chief Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that such encumbrances or
restrictions taken as a whole are not materially more restrictive than the
encumbrances
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and restrictions applicable to the Debt and/or equity being exchanged or
refinanced, (vii) customary non-assignment provisions in leases or other
contracts entered into in the ordinary course of business of the Company, any
Restricted Subsidiary or any Eligible Joint Venture, (viii) any restrictions
imposed pursuant to an agreement entered into for the sale or disposition of
all or substantially all of the Capital Stock or Property of any Restricted
Subsidiary or Joint Venture that apply pending the closing of such sale or
disposition, (ix) in connection with Liens on the Property of such Restricted
Subsidiary or such Eligible Joint Venture that are permitted by Section 1012
but only with respect to transfers referred to in clause (d) of this Section
1014, (x) in connection with the Incurrence of any Debt permitted under clause
(ii) of Section 1009(b) or (xi) in connection with the Incurrence of any
Permitted Facilities Debt permitted under clause (viii) of Section 1009(b),
provided that any such encumbrance or restriction relates only to those
Restricted Subsidiaries or Eligible Joint Ventures having a direct or indirect
interest in the Permitted Facilities in respect of which such Permitted
Facilities Debt was Incurred.
SECTION 1015. Limitation on Dispositions. (a) Subject to the
provisions of Article Eight, the Company shall not make and shall not permit
any of its Restricted Subsidiaries or any Eligible Joint Venture to make, any
Asset Disposition unless (i) the Company, the Restricted Subsidiary or the
Eligible Joint Venture, as the case may be, receives consideration at the time
of each such Asset Disposition at least equal to the fair market value of the
Property or securities sold or otherwise disposed of (to be determined in good
faith by the Chief Financial Officer, as evidenced by an Officers'
Certificate, or, if more than $30 million, by the Board of Directors, as
evidenced by a Board resolution), (ii) at least 85% of such consideration is
received in cash or Cash Equivalents or, if less than 85%, the remainder of
such consideration consists of Property related to the business of the Company
as described in the first sentence of Section 1021, and (iii) unless otherwise
required under the terms of Senior Debt, at the Company's election, the Net
Cash Proceeds are either (A) invested in the business of the Company, any of
its Restricted Subsidiaries or any Eligible Joint Venture or (B) applied to
the payment of any Debt of the Company or of any of its Restricted
Subsidiaries or any Eligible Joint Venture (or as otherwise required under the
terms of such Debt), provided that, no such payment of Debt (x) under
Permitted Working Capital Facilities or any other revolving credit agreement
shall count for this purpose unless the related loan commitment, standby
facility or the like shall be permanently reduced by an amount equal to the
principal amount so repaid and (y) owed to the Company, a Restricted
Subsidiary thereof or an Eligible Joint Venture shall count for this purpose,
provided further that such investment or such payment, as the case may be,
must be made within 365 days from the later of the date of such Asset
Disposition or the receipt by the Company, such Restricted
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Subsidiary or such Eligible Joint Venture of the Net Cash Proceeds related
thereto. Any Net Cash Proceeds from Asset Dispositions that are not applied as
provided in clause (A) or (B) of the preceding sentence shall constitute
"Excess Proceeds." Excess Proceeds shall be applied, as described below, to
make an offer (an "Excess Proceeds Offer") to purchase Securities of any
series at a purchase price equal to 100% of the principal thereof, plus
accrued interest, if any, to the date of purchase.
(b) Notwithstanding the provisions of Section 1015(a), the
Company, its Restricted Subsidiaries and the Eligible Joint Ventures may
exchange with other Persons (i) Property that constitutes a Restricted
Subsidiary or an Eligible Joint Venture for Property that constitutes a
Restricted Subsidiary or an Eligible Joint Venture, (ii) Property that
constitutes a Restricted Subsidiary or an Eligible Joint Venture for Property
that does not constitute a Restricted Subsidiary or an Eligible Joint Venture,
(iii) Property that does not constitute a Restricted Subsidiary or an Eligible
Joint Venture for Property that does not constitute a Restricted Subsidiary or
an Eligible Joint Venture and (iv) Property that does not constitute a
Restricted Subsidiary or an Eligible Joint Venture for Property that
constitutes a Restricted Subsidiary or an Eligible Joint Venture, provided
that in each case the fair market value of the Property received is at least
equal to the fair market value of the Property exchanged as determined in good
faith by the Chief Financial Officer, as evidenced by an Officers'
Certificate, or, if more than $25 million, by the Board of Directors, as
evidenced by a Board resolution, provided that the Investment in the Property
received in the exchanges described in clauses (ii) and (iii) of the prior
sentence shall be subject to Section 1010. Notwithstanding anything in the
foregoing to the contrary, the Company may not, and shall not permit any of
its Restricted Subsidiaries or any Eligible Joint Venture to, make an Asset
Disposition of any of their interest in, or Property of, any of the three
geothermal facilities located together at the Naval Weapons Center at China
Lake, California, sometimes referred to as the "Coso Project," other than for
consideration consisting solely of cash.
(c) To the extent that any or all of the Net Cash Proceeds
of any Foreign Asset Disposition are prohibited from (or delayed in) being
repatriated to the United States by applicable local law, the portion of such
Net Cash Proceeds so affected shall not be required to be applied at the time
provided above but may be retained by any Restricted Subsidiary or any
Eligible Joint Venture so long, but only so long, as the applicable local law
does not permit (or delays) repatriation to the United States. If such Net
Cash Proceeds are transferred by the Restricted Subsidiary or Eligible Joint
Venture that conducted the Foreign Asset Disposition to another Restricted
Subsidiary or Eligible Joint Venture, the Restricted Subsidiary or Eligible
Joint Venture receiving such Net Cash Proceeds must not be directly or
indirectly obligated on any Debt owed to any Person
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other than the Company. The Company shall take or cause such Restricted
Subsidiary or such Eligible Joint Venture to take all actions required by the
applicable local law to permit such repatriation promptly. Once repatriation
of any of such Net Cash Proceeds is permitted under the applicable local law,
repatriation shall be effected immediately and the repatriated Net Cash
Proceeds shall be applied in the manner set forth in this Section 1015(c) as
if such Asset Disposition had occurred on the date of such repatriation. In
addition, if the Chief Financial Officer determines, in good faith, as
evidenced by an Officers' Certificate, that repatriation of any or all of the
Net Cash Proceeds of any Foreign Asset Disposition would have a material
adverse tax consequence to the Company, the Net Cash Proceeds so affected may
be retained outside of the United States by the applicable Restricted
Subsidiary or the applicable Eligible Joint Venture for so long as such
material adverse tax consequence would continue. Notwithstanding the foregoing
provisions of this paragraph to the contrary, if applicable local law
prohibits (or delays) the repatriation of Net Cash Proceeds of a Foreign Asset
Disposition but such local law does not prohibit the application of such Net
Cash Proceeds pursuant to the first sentence of this Section 1015(a), the
Company may apply such Net Cash Proceeds pursuant to such provision.
(d) If the Securities tendered pursuant to an Excess
Proceeds Offer have an aggregate purchase price that is less than the Excess
Proceeds available for the purchase of the Securities, the Company may use the
remaining Excess Proceeds for general corporate purposes without regard to the
provisions of this Section 1015(d). The Company shall not be required to make
an Excess Proceeds Offer pursuant to this Section 1015 if the Excess Proceeds
available therefor are less than $10 million, provided that the lesser amounts
of such Excess Proceeds shall be carried forward and cumulated for each 36
consecutive month period for purposes of determining whether an Excess
Proceeds Offer is required with respect to any Excess Proceeds of any
subsequent Asset Dispositions. Any such lesser amounts so carried forward and
cumulated need not be segregated or reserved and may be used for general
corporate purposes, provided that such use shall not reduce the amount of
cumulated Excess Proceeds or relieve the Company of its obligation hereunder
to make an Excess Proceeds Offer with respect thereto.
(e) The Company shall make an Excess Proceeds Offer by
mailing to each Holder, with a copy to the Trustee, within 30 days after the
receipt of Excess Proceeds that cause the cumulated Excess Proceeds to exceed
$10 million, a written notice that shall specify the purchase date, which
shall not be less than 30 days nor more than 60 days after the date of such
notice (the "Excess Proceeds Purchase Date"), that shall contain certain
information concerning the business of the Company that the Company believes
in good faith shall enable the Holders to make an informed decision and that
shall contain information concerning the procedures applicable to the Excess
Proceeds Offer
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(including, without limitation, the right of withdrawal) and the effect of
such offer on the Securities tendered. Holders that elect to have their
Securities purchased shall be required to surrender such Securities at least
one Business Day prior to the Excess Proceeds Purchase Date. If at the
expiration of the Excess Proceeds Offer period the aggregate purchase price of
the Securities of the series properly tendered by Holders pursuant to the
Excess Proceeds Offer exceeds the amount of such Excess Proceeds, the
Securities of such series or portions of Securities to be accepted for
purchase shall be selected by the Trustee in such manner as the Trustee deems
to be fair and appropriate in the circumstances.
On the Excess Proceeds Purchase Date, the Company shall (i)
accept for payment on a pro rata basis Securities of any series or portions
thereof tendered pursuant to the Excess Proceeds Offer, (ii) deposit with the
Paying Agent money in immediately available funds sufficient to pay the
aggregate purchase price of all the Securities of such series or portions
thereof so accepted and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities of such series
or portions thereof tendered to the Company. The Paying Agent shall promptly
mail to the Holders of each Security so accepted payment in an amount equal to
the aggregate purchase price, and the Trustee shall promptly authenticate and
mail to the Holders of each Security so accepted payment in an amount equal to
the purchase price thereof, and the Trustee shall promptly authenticate and
mail to such Holders new Securities of the same series equal in principal
amount to any portion of the Security surrendered that was not purchased. The
Company shall make a public announcement of the results of the Excess Proceeds
Offer as soon as practicable after the Excess Proceeds Purchase Date. For the
purposes of this Section 1015, the Trustee shall act as the Paying Agent.
If the Company is prohibited by applicable law from making
the Excess Proceeds Offer or purchasing Securities of any series thereunder,
the Company need not make an Excess Proceeds Offer pursuant to this Section
1015 for so long as such prohibition is in effect.
The Company shall comply with all applicable tender offer
rules, including, without limitation, Rule 14e-1 under the Exchange Act, in
connection with an Excess Proceeds Offer.
SECTION 1016. Limitation on Certain Sale-Leasebacks. The
Company shall not, and shall not permit any of its Restricted Subsidiaries or
any Eligible Joint Venture to, Incur or otherwise become obligated with
respect to any sale-leaseback (other than a sale-leaseback with respect to a
Permitted Facility that is Non-Recourse) unless, (i) (a) if effected by the
Company, the Company would be permitted to Incur such obligation under Section
1008 or, (b) if effected by a Restricted Subsidiary or an Eligible Joint
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Venture, such Restricted Subsidiary or such Eligible Joint Venture would be
permitted to Incur such obligation under Section 1009(b), assuming for the
purpose of this Section 1016 and Section 1008 and 1009 that (x) the obligation
created by such sale-leaseback is a Capitalized Lease and (y) the Capitalized
Lease Obligation with respect thereto is the Attributable Value thereof, (ii)
the Company, such Restricted Subsidiary or such Eligible Joint Venture is
permitted to grant a Lien with respect to the property that is the subject of
such sale-leaseback under Section 1012 of this Indenture, (iii) the proceeds
of such sale-leaseback are at least equal to the fair market value of the
property sold (determined in good faith as evidenced by an Officers'
Certificate delivered to the Trustee in respect of a transaction involving
less than $25 million, or, if equal to or in excess of $25 million, by the
Board of Directors, as evidenced by a Board Resolution) and (iv) the Net Cash
Proceeds of the sale-leaseback are applied pursuant to Section 1015.
SECTION 1017. Provision of Financial Information. Whether or
not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, or
any successor provision thereto, the Company shall file with the Commission
the annual reports, quarterly reports and other documents that the Company
would have been required to file with the Commission pursuant to such Section
13(a) or 15(d) or any successor provision thereto if the Company were subject
thereto, such documents to be filed with the Commission on or prior to the
respective dates by which the Company would have been required to file them.
The Company shall also in any event (a) within 15 days of each such date (i)
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, without cost to such Holders, and (ii) file with the
Trustee copies of the annual reports, quarterly reports and other documents
(without exhibits) which the Company would have been required to file with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act or any
successor provisions thereto if the Company were subject thereto and (b) if
filing such documents by the Company with the Commission is not permitted
under the Exchange Act, promptly upon written request, supply copies of such
documents (without exhibits) to any prospective Holder.
SECTION 1018. Limitation on Sale of Subsidiary Preferred
Stock. The Company shall not permit any of its Restricted Subsidiaries or any
Eligible Joint Venture to create, assume or otherwise cause or suffer to exist
any Preferred Stock except: (i) Preferred Stock outstanding on the date of
this Indenture, including Preferred Stock issued as dividends in respect of
such Preferred Stock pursuant to the terms of the agreement or instrument that
governs such Preferred Stock as in effect on the Issue Date of the Securities,
(ii) Preferred Stock held by the Company, a Restricted Subsidiary of the
Company or an Eligible Joint Venture, (iii) Preferred Stock issued by a Person
prior to the time (a) such Person becomes a Restricted Subsidiary or an
Eligible Joint Venture, (b) such Person merges with or into another Restricted
Subsidiary or another Eligible Joint Venture
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or (c) a Restricted Subsidiary or an Eligible Joint Venture merges with or
into such Person (in a transaction in which such Person becomes a Restricted
Subsidiary or an Eligible Joint Venture), provided that such Preferred Stock
was not issued in anticipation of such Person becoming a Restricted Subsidiary
or an Eligible Joint Venture or of such merger and (iv) Preferred Stock issued
or agreed to be issued by a Restricted Subsidiary or an Eligible Joint Venture
in connection with the financing of the construction, design, engineering,
procurement, equipping, developing, operation, ownership, management,
servicing or acquisition of one or more Permitted Facilities in which the
Company or one or more Restricted Subsidiaries or Eligible Joint Ventures has
a direct or indirect interest or the retirement of Debt or Preferred Stock
secured by any such Permitted Facility or in order to enhance the repatriation
of equity, advances or income or the increase of after-tax funds available for
distribution to the owners of such Permitted Facility, (v) Preferred Stock
issued or agreed to be issued by a Restricted Subsidiary or an Eligible Joint
Venture in satisfaction of legal requirements applicable to a Permitted
Facility or to maintain the ordinary course of conduct of such Restricted
Subsidiary's or such Eligible Joint Venture's business in the applicable
jurisdiction and (vi) Preferred Stock that is exchanged for, or the proceeds
of which are used to refinance, any Preferred Stock permitted to be
outstanding pursuant to clauses (i) through (v) hereof (or any extension,
renewal or refinancing thereof), having a liquidation preference not to exceed
the liquidation preference of the Preferred Stock so exchanged or refinanced
and having a redemption period no shorter than the redemption period of the
Preferred Stock so exchanged or refinanced.
SECTION 1019. Statement by Officers as to Default;
Compliance Certificates. (a) The Company shall deliver to the Trustee, within
120 days after the end of each fiscal year, an Officers' Certificate stating
that a review of the activities of the Company, its Restricted Subsidiaries
and the Eligible Joint Ventures (signed by a signatory prescribed under the
Trust Indenture Act) during the preceding fiscal year has been made under the
supervision of the signing officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and whether the Restricted Subsidiaries and the Eligible Joint
Ventures are in compliance with all covenants of this Indenture applicable to
them and further stating, as to each such officer signing such certificate,
that to the best of his knowledge each has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions, and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he may have
knowledge and what action each is taking or proposes to take with respect
thereto).
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(b) The Company shall, so long as any of the Securities of
any series are outstanding, deliver to the Trustee, forthwith upon any officer
becoming aware of (i) any Default or Event of Default or (ii) any event of
default under any other mortgage, indenture or instrument referred to in
Section 501(5), an Officers' Certificate specifying such Default, Event of
Default or other event of default and what action the Company is taking or
proposes to take with respect thereto.
SECTION 1020. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any covenant or condition set
forth in Section 801, provided pursuant to Section 901(2) and set forth in
Sections 1004 to 1012, inclusive, Section 1014 and Sections 1016 through 1018,
inclusive, and Section 1021 if before the time for such compliance the Holders
of at least a majority in principal amount at Stated Maturity of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
SECTION 1021. Limitation on Business. The Company shall, and
shall cause its Restricted Subsidiaries and the Eligible Joint Ventures to,
engage only in (i) the ownership, design, engineering, procurement,
construction, development, acquisition, operation, servicing, management or
disposition of Permitted Facilities, (ii) the ownership, creation,
development, acquisition, servicing, management or disposition of Restricted
Subsidiaries and Joint Ventures that own, construct, develop, design,
engineer, procure, acquire, operate, service, manage or dispose of Permitted
Facilities, (iii) obtaining, arranging or providing financing incident to any
of the foregoing and (iv) other related activities incident to any of the
foregoing. The Company shall not, and shall not permit any of its Restricted
Subsidiaries or any Eligible Joint Venture to, make any Investment or
otherwise acquire any Property that is not directly related to the business of
the Company as described in the preceding sentence (collectively, the
"Ineligible Investments") other than as a part of an Investment or an
acquisition of Property that is predominantly and directly related to the
business of the Company as described above, and if the aggregate fair market
value of such Ineligible Investments in the aggregate exceeds 20% (the
"Percentage Limit") of the total assets of the Company and its consolidated
Restricted Subsidiaries (as determined in accordance with GAAP) as determined
in good faith by the Chief Financial Officer, as evidenced by an Officers'
Certificate, the Company, its Restricted Subsidiaries and the Eligible Joint
Ventures must cease acquiring any additional Ineligible Investments and,
within 18 months of the acquisition that caused the Ineligible Assets to
exceed the Percentage Limit,
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must return to compliance with the Percentage Limit by disposing of Ineligible
Assets or otherwise, provided that such 18-month period may be extended up to
an additional six months if, despite the Company's active efforts during such
18-month period to dispose of such Ineligible Investments or to otherwise come
into compliance with such Percentage Limit, the Company is unable to do so
because of regulatory restrictions or delays or adverse market conditions.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption. The Securities of any
series may be redeemed at the election of the Company, in the amounts, at any
time on or after (September 15, 2001), at the Redemption Prices specified in
the form of Security of such series hereinbefore set forth (together with any
applicable accrued and unpaid interest to the Redemption Date) and subject to
the conditions specified in the form of Security of such series hereinafter
set forth.
SECTION 1102. Applicability of Article. Redemption of
Securities of any series at the election of the Company, as permitted by this
Indenture and the provisions of the Securities of such series, shall be made
in accordance with such provisions and this Article Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities pursuant to Section 1101
shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company pursuant to Section 1101 of less
than all the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities of such series to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be
Redeemed. If less than all the outstanding Securities of any series are to be
redeemed, the Securities or portions of Securities to be redeemed or accepted
shall be selected by the Trustee pro rata or otherwise in such manner as the
Trustee deems to be fair and appropriate in the circumstances, provided that
the Trustee shall redeem Securities of that series to be redeemed only in
denominations of $1,000 principal amount and integral multiples thereof.
The Trustee shall promptly notify the Company and each
Security Registrar in writing of the Securities selected for
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redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture and or the Securities,
unless the context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal amount of such
Securities that has been or is to be redeemed.
SECTION 1105. Notice of Redemption. Notice of redemption
shall be given as provided in Section 106 not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be
redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed, including CUSIP Numbers,
(4) that on the Redemption Date the Redemption Price shall
become due and payable upon each such security to be redeemed and
that, unless the Company shall default in the payment of the
Redemption Price and any applicable accrued interest, and
(5) the name of the Paying Agent or Agents and the place or
places where such Securities are to be surrendered for payment of the
Redemption Price.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and
shall be irrevocable.
SECTION 1106. Deposit of Redemption Price. Prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any applicable accrued and unpaid interest on, all the
Securities of the series that are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the
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Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and any applicable accrued and unpaid interest) such Securities shall not bear
interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price, together with any applicable accrued and unpaid interest to the
Redemption Date; provided that installments of interest whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and
the provisions of Section 210.
If any Security called for redemption in accordance with the
election of the Company made pursuant to Section 1101 shall not be so paid
upon surrender thereof for redemption, the unpaid Redemption Price thereof
shall, until paid, bear interest from the Redemption Date at the rate or
manner provided by the Security.
SECTION 1108. Securities Redeemed in Part. Any Security that
is to be redeemed only in part shall be surrendered at an office or agency of
the Company designated for that purpose pursuant to Section 1002 (with, if the
Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal amount of the Security so
surrendered.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or
Covenant Defeasance. The Company may elect, at its option at any time, to have
Section 1202 or Section 1203 applied to the Outstanding Securities of or
within any series (as a whole and not in part) upon compliance with the
conditions set forth below in this Article Eleven. Any such election shall be
evidenced by a Board Resolution.
SECTION 1202. Defeasance and Discharge. Upon the Company's
exercise of its option to have this Section 1202 applied to the Outstanding
Securities of or within a series (as a whole and not in part), the Company
shall be deemed to have been
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discharged from its obligations with respect to such Securities as provided in
this Section 1202 on and after the 123rd day after the conditions set forth in
Section 1204 are satisfied (hereinafter called "Defeasance") (or immediately
if an Opinion of Counsel is delivered to the effect described in clause (C)(y)
of paragraph (2) of Section 1204). For this purpose, such Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 1204 and as more fully set forth in
such Section, payments in respect of the principal of and any premium and
interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 307, 308, 309,
1002, 1003 and 1004 (only with respect to the corporate existence and rights
of the Company), (3) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture, (4) Article Eleven and (5) this Article Twelve.
Subject to compliance with this Article Twelve, the Company may exercise its
option to have this Section 1202 applied to the Outstanding Securities (as a
whole and not in part) notwithstanding the prior exercise of its option to
have Section 1203 applied to such Securities.
SECTION 1203. Covenant Defeasance. Upon the Company's
exercise of its option to have this Section applied to the Outstanding
Securities of or within a series (as a whole and not in part), (i) the
Company, its Restricted Subsidiaries and its Eligible Joint Ventures shall be
released from its obligations under Section 801(iii), Sections 1005 through
1018, inclusive, Section 1021, and any covenant provided pursuant to Section
901(2) and (ii) the occurrence of any event specified in Section 501(1)
(solely with respect to Offers to Purchase), Section 501(3), Section 501(4)
(with respect to any of Section 801(iii) and Sections 1005 through 1018,
inclusive, Section 1021, and any such covenants provided pursuant to Section
901(2)), Section 501(5) or Section 501(6) shall be deemed not to be or result
in an Event of Default, in each case with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1204 are satisfied (hereinafter called "Covenant Defeasance"). For
this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Sections 501(1) and
501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section
to any other
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provision herein or in any other document; but the remainder of this Indenture
and such Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions to the application of
Section 1202 or Section 1203 to the Outstanding Securities of or within a
series:
(1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee that satisfies
the requirements contemplated by Section 609 and agrees to comply
with the provisions of this Article applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to the
benefits of the Holders of such Securities, (A) money in an amount,
or (B) U.S. Government Obligations that through the scheduled payment
of principal and interest in respect thereof in accordance with their
terms shall provide, not later than one day before the due date of
any payment, money in an amount, or (C) a combination thereof, in
each case 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 and discharge,
and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of, premium
if any and any installment of accrued interest on such Securities on
the respective Stated Maturities thereof or, if the Company makes
arrangements satisfactory to the Trustee for the redemption of the
Securities prior to their Stated Maturity, on any earlier Redemption
Date, in accordance with the terms of this Indenture and such
Securities.
(2) In the event of an election to have Section 1202 apply
to the Outstanding Securities, the Company shall have delivered to
the Trustee (A) either (X) an Opinion of Counsel to the effect that
Holders shall not recognize income, gain or loss for federal income
tax purposes as a result of such deposit, defeasance and discharge
and shall be subject to 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 and the
Company had paid or redeemed such Securities on the applicable dates,
which Opinion of Counsel must be based upon a ruling of the Internal
Revenue Service to the same effect or a change in applicable federal
income tax law or related Treasury regulations after the date of the
Indenture or (y) a ruling directed to the Trustee or the Company
received from the Internal Revenue Service to the same effect as the
aforementioned Opinion of Counsel, (B) an Opinion of Counsel to the
effect that the creation of the defeasance trust does not violate the
Investment Company Act of 1940 and (C) an Opinion of Counsel to the
effect that
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either (x) after the passage of 123 days following the deposit, the
trust fund shall not be subject to the effect of Section 547 or 548
of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law or (y) based upon existing precedents, if the manner
were properly briefed, a court should hold that the deposit of moneys
and/or U.S. Government Obligations as provided in Section 1204(1)
would not constitute a preference voidable under Section 547 or 548
of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law.
(3) In the event of an election to have Section 1203 apply
to the Outstanding Securities, the Company shall have delivered to
the Trustee (i) an Opinion of Counsel to the effect that the Holders
of such Outstanding Securities shall not recognize income, gain or
loss for Federal income tax purposes as a result of the deposit and
Covenant Defeasance to be effected with respect to such Securities
and shall be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur and the Company had
paid or redeemed such Securities on the applicable dates, (ii) an
Opinion of Counsel to the effect that the creation of the defeasance
trust does not violate the Investment Company Act of 1940 and (iii)
an Opinion of Counsel to the effect that either (x) after the passage
of 123 days following the deposit, the trust fund shall not be
subject to the effect of Section 547 or 548 of the U.S. Bankruptcy
Code or Section 15 of the New York Debtor and Creditor Law or (y)
based upon existing precedents, if the manner were properly briefed,
a court should hold that the deposit of moneys and/or U.S. Government
Obligations as provided in Section 1204(1) would not constitute a
preference voidable under Section 547 or 548 of the U.S. Bankruptcy
Code or Section 15 of the New York Debtor and Creditor Law.
(4) Immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default or event that after the
giving of notice or lapse of time or both would become an Event of
Default, with respect to the Outstanding Securities shall have
occurred and be continuing at the time of such deposit or (unless an
Opinion of Counsel is delivered to the effect described in Section
1204(2)(C)(y) or 1204(3)(iii)(y)) during the period ending on the
123rd day after the date of such deposit.
(5) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest within the meaning of the
Trust Indenture Act (assuming all Securities are in default within
the meaning of such Act).
(6) Such Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default
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under, any other agreement or instrument to which the Company is a
party or by which it is bound.
(7) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be registered under such Act or
exempt from registration thereunder.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
(9) If the Securities are listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Securities shall not be delisted as
a result of such deposit, defeasance and discharge.
SECTION 1205. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Miscellaneous Provisions. Subject to the
provisions of the last paragraph of Section 1003, all money and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section 1205
and Section 1206, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1204 or otherwise in
respect of the Outstanding Securities of any series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any such Paying
Agent (other than the Company acting as its own Paying Agent) as the Trustee
may determine, to the Holders of such Securities, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge that
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1204 that, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to
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effect the Defeasance or Covenant Defeasance, as the case may be, with respect
to the Outstanding Securities.
SECTION 1206. Reinstatement. If the Trustee or the Paying
Agent is unable to apply any money in accordance with this Article Twelve with
respect to any Securities of any series by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations under this Indenture and
such Securities of such series from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article Twelve with respect to
such Securities of such series, until such time as the Trustee or Paying Agent
is permitted to apply all money held in trust pursuant to Section 1205 with
respect to such Securities in accordance with this Article Twelve; provided
that if the Company makes any payment of principal of or any premium or
interest on any such Security of such series following such reinstatement of
its obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities of such series to receive such payment from the
money so held in trust.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
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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.
CALENERGY COMPANY, INC.
By:
------------------------------
Attest: Name:
Title:
- -----------------------------------
IBJ SCHRODER BANK & TRUST COMPANY
By:
-----------------------------
Attest: Name:
Title:
- -----------------------------------
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STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the ______ day of ________, ____ before me personally
came __________, to me known, who, being by me duly sworn, did depose and say
that he is _______________ of CalEnergy Company, Inc., one of the corporations
described in and that executed the foregoing instrument, and that said
instrument was executed by the Corporation by the said _____________ by
authority of the Board of Directors of said corporation.
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the _____ day of ________, ____ before me personally came
_________, to me known, who, being by me duly sworn, did depose and say that
___________ is ______________________ of IBJ SCHRODER BANK & TRUST COMPANY,
one of the corporations described in and that executed the foregoing
instrument; that said instrument was executed by the Corporation by the said
_________________ by authority of the Board of Directors of said corporation.
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EXHIBIT A
Form of Senior Debt Security
(A) FACE OF SENIOR DEBT SECURITY
CALENERGY COMPANY, INC.
___% Senior Notes due _____
No. ________________ $______
CUSIP No.__________
CalEnergy Company, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _________________, or
registered assigns, the principal sum of __________________ Dollars on _______
__, ____, and to pay interest thereon from their date of issue and thereafter
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on ____ and _____ in each year, at the rate
of ___% per annum, until the principal hereof is paid or duly provided for,
provided that any principal and premium, if any, and any such installment of
interest, that is overdue shall bear interest at the rate of ___% per annum
(to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or duly
provided for, and such interest shall be payable on demand. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date shall, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the _____ or ______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
said Indenture.
Payment of the principal of (and premium, if any) and any interest
on this Security shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at such additional offices
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or agencies as the Company from time to time may designate for such purpose,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts, provided that
payment of the principal of (and premium, if any, on) this Security shall be
made only upon presentation and surrender hereof at any such office or agency
and, at the option of the Company, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
CALENERGY COMPANY, INC.
By:
---------------------
Title:
Attest:
- ----------------------------
Title:
Form of Trustee's Certificate of Authentication.
Dated:
This is one of the Securities referred to in the within-mentioned Indenture.
IBJ SCHRODER BANK & TRUST COMPANY, As Trustee
By:__________________________________________
Authorized Signatory
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(B) FORM OF REVERSE OF SENIOR DEBT SECURITY
This Security is one of a duly authorized issue of Securities of the
Company designated as its ___% Senior Notes due ____ (herein called the
"Securities"), limited in aggregate principal amount of $_____ issued and to
be issued under an Indenture, dated as of ______ __, _____ (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and IBJ Schroder Bank & Trust Company, as
Trustee (herein called the "Trustee" which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, at any time on or after _________ __, ____
and prior to maturity, as a whole or in part, at the election of the Company,
at the following Redemption Prices (expressed as percentages of the principal
amount), if redeemed during the 12-month period commencing on or after
__________ __ of the years indicated,
Year Redemption Price
---- ----------------
together in the case of any such redemption with accrued interest, if any, to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date shall be payable to the Holders of such
Securities, or one or more predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
The Securities do not have the benefit of any sinking fund
obligations.
Upon the occurrence of a Change of Control, the Company shall be
required to make an Offer to Purchase all or a specified portion of the
Securities at a Purchase Price in cash equal to 101 percent of the principal
amount thereof on any Purchase Date
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plus accrued and unpaid interest, if any, to such Purchase Date. If the
Company, any Restricted Subsidiary or any Eligible Joint Venture consummates
an Asset Disposition, under certain circumstances, the Company shall be
required to make an Offer to Purchase up to all or a specified portion of the
Securities at a Purchase Price in cash equal to 100 percent of the principal
amount thereof on any Purchase Date, plus accrued and unpaid interest, if any,
to such Purchase Date, in an amount equal to any Net Cash Proceeds from such
an Asset Disposition that are not used to reinvest in the business of the
Company and/or repay in a permanent reduction of Debt of the Company or Debt
of its Restricted Subsidiaries or Eligible Joint Ventures. Holders of
Securities shall receive notice of any such Offer to Purchase from the Company
prior to the related Purchase Date and may elect to have such Securities
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing on the reverse side of the Security.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Security in part only, a new Security or Securities for the
portion hereof not redeemed or purchased shall be issued in the name of the
Holder hereof upon surrender of this Security to the Trustee for cancellation
thereof.
The Indenture contains provisions for defeasance at any time of the
entire Debt of this Security or certain restrictive covenants and Events of
Default with respect to this Security, including, without limitation,
covenants relating to Offers to Purchase, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the Default Amount of the Securities, in the manner
and with the effect provided in the Indenture. The Default Amount in respect
of this Security as of any particular date shall equal 100% of the principal
amount of this Security plus accrued and unpaid interest, if any, to such
date.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. In addition, without the consent of any Holder of a Security,
the Indenture and the Securities may be amended and supplemented to cure any
ambiguity or inconsistency, make other changes that
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shall not adversely affect the rights of the Holders or certain other matters
specified in the Indenture. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver, or trustee
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities, the Holders of not less than 25 percent in principal amount
of the Securities at the time Outstanding shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities at the time Outstanding a direction inconsistent with such request
and shall have failed to institute any such proceeding for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall
not apply to certain suits described in the Indenture, including any suit
instituted by the Holder of this Security for the enforcement of any payment
of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein (or, in the case of redemption, on or
after the Redemption Date or, in the case of any purchase of this Security
required to be made pursuant to an Offer to Purchase, on or after the Purchase
Date).
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place, manner and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Borough of Manhattan,
The City of New York (which initially shall be the corporate trust office of
the Trustee), duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, shall be issued to the designated transferee
or transferees.
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The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate principal amount of
Securities of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
A director, officer, employee, stockholder or incorporator
of the Company shall not have any liability for any obligations of the Company
under this Security or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Holder by accepting
this Security waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of this Security.
Prior to due presentment of this Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security is overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
Interest on this Security shall be computed on the basis of
a 360-day year of twelve 30-day months.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed under the State of New York, without regard to
principles of conflicts of law.
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Your Signature:
----------------------------------------------
(sign exactly as name appears on the other
side of this Security)
Signature Guarantee:
(Signature must be guaranteed by a financial institution that is a member of
the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee program as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of
1934, as amended.)
A-7
<PAGE>
EXHIBIT B
PROMISSORY NOTE
Date of Issue: as of
-------------------------
FOR VALUE RECEIVED, the undersigned, [Borrower], a __________________
corporation ("Borrower"), hereby promises to pay to the order of [Lender], a
________________ corporation ("Lender"), $_________ (the "Principal") and any
interest accrued thereon, upon demand by the Lender at any time six months
subsequent to the date on which the ____% Senior Notes due ____ (the "Senior
Notes") of CalEnergy Company, Inc. that were issued pursuant to an Indenture
dated as of _____________, _____ between CalEnergy Company, Inc. and IBJ
Schroder Bank & Trust Company shall have been repaid in full or such earlier
date as may be permitted under the terms of such Indenture.
Section 1 Accrual and Payment of Interest
under this Promissory Note
The Principal shall accrue interest from the date hereof at an annual
rate (computed on the basis of a 360 day year) of __% which, to the extent
permitted by applicable law, shall be compounded semi-annually on each _____ and
______ and added to the Principal hereof.
Section 2 Subordination
Payment of Principal of an interest on this Promissory Note shall be
subordinated to the fullest extent permitted by applicable law to the prior
payment in full of the principal of, premium, if any, and interest on any
other indebtedness for money borrowed of the Borrower, to the extent that the
same is thus due and owing whether at its stated maturity, upon acceleration
or otherwise.
Section 3 Notices
All notices required or permitted hereunder shall be given by
facsimile where appropriate and confirmed in writing or by prepaid registered
mail to the addresses of the parties set forth in this Section 3 or to such
other addresses as either party shall duly specify by written notice to the
other.
If to Borrower to:
------------------
------------------
------------------
------------------
B-1
<PAGE>
If to Lender to:
------------------
------------------
------------------
------------------
Section 4 No Waiver
No failure or delay of either party hereto to exercise any power
under this Promissory Note or to insist upon strict compliance by either party
hereto of any obligations hereunder shall constitute a waiver of either
party's rights to demand exact compliance with the terms hereof.
Section 5 Governing Law
This Promissory Note is made under and in accordance with the laws of
, and the rights of the parties in the construction and
effect of each and every provision hereof shall be subject to the exclusive
jurisdiction of and shall be construed and regulated according to the laws of
.
[Borrower]
By
-------------------------------------
Name:
Title:
B-2
<PAGE>
CALENERGY COMPANY INC.,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
Indenture
Dated as of ______ __, 1997
Subordinated Debentures
<PAGE>
TABLE OF CONTENTS(1)
PAGE
RECITALS OF THE COMPANY.....................................................1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION......................................................1
SECTION 1.1 Definitions...........................................1
Trust Securities .............................................11
Voting Stock .............................................12
SECTION 1.2 Compliance Certificates and Opinions.................12
SECTION 1.3 Form of Documents Delivered to Trustee...............13
SECTION 1.4 Acts of Holders......................................14
SECTION 1.5 Notices, Etc., to Trustee and Company................17
SECTION 1.6 Notice to Holders of Debentures; Waiver..............18
SECTION 1.7 Language of Notices, Etc.............................19
SECTION 1.8 Conflict with Trust Indenture Act....................19
SECTION 1.9 Effect of Headings and Table of Contents.............19
SECTION 1.10 Successors and Assigns..............................19
SECTION 1.11 Separability Clause.................................20
SECTION 1.12 Benefits of Indenture...............................20
SECTION 1.13 Governing Law.......................................20
SECTION 1.14 Legal Holidays......................................20
SECTION 1.15 Judgment Currency...................................21
SECTION 1.16 Immunity of Incorporators, Shareholders, Officers,
Directors and Employees.............................21
- --------------
1 NOTE: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
ARTICLE II
DEBENTURE FORMS............................................................22
SECTION 2.1 Forms Generally......................................22
SECTION 2.2 Form of Trustee's Certificate of Authentication......23
SECTION 2.3 Debentures in Global Form............................24
SECTION 2.4 Form of Legend for Book-Entry Debentures.............25
SECTION 2.5 Form of Conversion Notice............................25
ARTICLE III
THE DEBENTURES.............................................................25
SECTION 3.1 Amount Unlimited; Issuable in Series.................25
SECTION 3.2 Denominations........................................30
SECTION 3.3 Execution, Authentication, Delivery and Dating.......30
SECTION 3.4 Temporary Debentures.................................33
SECTION 3.5 Registration, Registration of Transfer and Exchange..36
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures and
Coupons....................................................................40
SECTION 3.7 Payment of Interest; Interest Rights Preserved.......41
SECTION 3.8 Persons Deemed Owners................................43
SECTION 3.9 Cancellation.........................................44
SECTION 3.10 Computation of Interest.............................45
SECTION 3.11 Electronic Debenture Issuance.......................45
SECTION 3.12 CUSIP Numbers.......................................45
SECTION 3.13 Right of Set Off....................................45
ARTICLE IV
SATISFACTION AND DISCHARGE.................................................46
SECTION 4.1 Satisfaction and Discharge of Indenture..............46
SECTION 4.2 Application of Trust Money...........................47
SECTION 4.3 Company's Option to Effect Defeasance or
Covenant Defeasance..................................48
SECTION 4.4 Discharge and Defeasance.............................48
SECTION 4.5 Covenant Defeasance..................................49
SECTION 4.6 Conditions to Defeasance or Covenant Defeasance.....49
ii
<PAGE>
ARTICLE V
REMEDIES...................................................................53
SECTION 5.1 Events of Default....................................53
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment...56
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee...............................57
SECTION 5.4 Trustee May File Proofs of Claim.....................58
SECTION 5.5 Trustee May Enforce Claims Without Possession of
Debentures or Coupons................................59
SECTION 5.6 Application of Money Collected.......................59
SECTION 5.7 Limitation on Suits..................................60
SECTION 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and Convert.....................61
SECTION 5.9 Restoration of Rights and Remedies...................61
SECTION 5.10 Rights and Remedies Cumulative.......................61
SECTION 5.11 Delay or Omission Not Waiver.........................62
SECTION 5.12 Control by Holders of Debentures.....................62
SECTION 5.13 Waiver of Past Defaults..............................62
SECTION 5.14 Undertaking for Costs................................63
SECTION 5.15 Waiver of Stay or Extension Laws.....................64
SECTION 5.16 Enforcement by Holders of Preferred Securities.......64
ARTICLE VI
THE TRUSTEE................................................................65
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. ......................................65
SECTION 6.2 Notice of Defaults...................................66
SECTION 6.3 Certain Rights of Trustee............................66
SECTION 6.4 Not Responsible for Recitals or Issuance of
Debentures...........................................67
SECTION 6.5 May Hold Debentures..................................68
SECTION 6.6 Money Held in Trust..................................68
SECTION 6.7 Compensation and Reimbursement.......................68
SECTION 6.8 Disqualification; Conflicting Interests..............69
SECTION 6.9 Corporate Trustee Required; Eligibility..............69
iii
<PAGE>
SECTION 6.10 Resignation and Removal; Appointment of Successor....70
SECTION 6.11 Acceptance of Appointment by Successor...............72
SECTION 6.12 Preferential Collection of Claims Against Company....73
SECTION 6.13 Merger, Conversion Consolidation or Succession to
Business.............................................73
SECTION 6.14 Appointment of Authenticating Agent..................74
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..........................76
SECTION 7.2 Preservation of Information; Communications to
Holders..............................................76
SECTION 7.3 Reports by Trustee...................................77
SECTION 7.4. Reports by Company...................................77
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE..................................78
SECTION 8.1 Company May Consolidate, Etc. on Certain Terms.......78
SECTION 8.2 Successor Corporation Substituted....................79
ARTICLE IX
SUPPLEMENTAL INDENTURES....................................................80
SECTION 9.1 Supplemental Indentures Without Consent of Holders...80
SECTION 9.2 Supplemental Indentures with Consent of Holders......82
SECTION 9.3 Execution of Supplemental Indentures.................84
SECTION 9.4 Effect of Supplemental Indentures....................84
SECTION 9.5 Conformity with Trust Indenture Act..................85
SECTION 9.6 Reference in Debentures to Supplemental Indentures...85
ARTICLE X
COVENANTS..................................................................85
SECTION 10.1 Payment of Principal, Premium and Interest..........85
SECTION 10.2 Maintenance of Office or Agency.....................86
SECTION 10.3 Money for Debentures Payments to Be Held in Trust...87
SECTION 10.4 Limitation on Dividends; Transactions with
Affiliates..........................................89
SECTION 10.5 Covenants as to CalEnergy Trusts....................90
iv
<PAGE>
SECTION 10.6 Additional Amounts..................................90
SECTION 10.7 Existence...........................................91
SECTION 10.8 Purchase of Debentures by Company or Subsidiary.....92
SECTION 10.9 Statement by Officers as to Default.................92
SECTION 10.10 Calculation of Original Issue Discount.............92
ARTICLE XI
REDEMPTION OF DEBENTURES...................................................93
SECTION 11.1 Applicability of Article............................93
SECTION 11.2 Election to Redeem; Notice to Trustee...............93
SECTION 11.3 Selection by Trustee of Debentures to Be Redeemed...93
SECTION 11.4 Notice of Redemption................................94
SECTION 11.5 Deposit of Redemption Price.........................96
SECTION 11.6 Debentures Payable on Redemption Date...............96
SECTION 11.7 Debentures Redeemed in Part.........................97
ARTICLE XII
SINKING FUNDS..............................................................97
SECTION 12.1 Applicability of Article............................97
SECTION 12.2 Satisfaction of Sinking Fund Payments with
Debentures..........................................98
SECTION 12.3 Redemption of Debentures for Sinking Fund...........98
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES..........................................99
SECTION 13.1 Purposes for Which Meetings May be Called...........99
SECTION 13.2 Call, Notice and Place of Meetings..................99
SECTION 13.3 Persons Entitled to Vote at Meetings...............100
SECTION 13.4 Quorum; Action.....................................100
SECTION 13.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings............................102
SECTION 13.6 Counting Votes and Recording Action of Meetings....103
ARTICLE XIV
CONVERSION OF DEBENTURES..................................................103
v
<PAGE>
SECTION 14.1 Applicability of Article...........................103
SECTION 14.2 Exercise of Conversion Privilege...................104
SECTION 14.3 No Fractional Shares...............................105
SECTION 14.4 Adjustment of Conversion Price.....................106
SECTION 14.5 Notice of Certain Corporate Actions................106
SECTION 14.6 Reservation of Shares of Common Stock..............108
SECTION 14.7 Payment of Certain Taxes upon Conversion...........108
SECTION 14.8 Nonassessability...................................108
SECTION 14.9 Effect of Consolidation or Merger on Conversion
Privilege..........................................108
SECTION 14.10 Duties of Trustee Regarding Conversion............110
SECTION 14.11 Repayment of Certain Funds upon Conversion........110
ARTICLE XV
SUBORDINATION OF DEBENTURES......................................111
SECTION 15.1 Debentures Subordinate to Senior Indebtedness.....111
SECTION 15.2 Payment Over of Proceeds Upon Dissolution, Etc....111
SECTION 15.3 Prior Payment to Senior Indebtedness Upon
Acceleration of Debentures........................113
SECTION 15.4 No Payment When Senior Indebtedness in Default....113
SECTION 15.5 Payment Permitted in Certain Situations...........114
SECTION 15.6 Subrogation to Rights of Holders of Senior
Indebtedness......................................115
SECTION 15.7 Provisions Solely to Define Relative Rights.......115
SECTION 15.8 Trustee to Effectuate Subordination...............116
SECTION 15.9 No Waiver of Subordination Provisions.............116
SECTION 15.10 Notice to Trustee.................................117
SECTION 15.11 Reliance on Judicial Order or Certificate of
Liquidating Agent.................................117
SECTION 15.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness......................................118
SECTION 15.13 Rights of Trustee as Holder of Senior
Indebtedness, Pres ervation of Trustee's Rights...118
SECTION 15.14 Article Applicable to Paying Agents...............118
SECTION 15.15 Certain Conversions Deemed Payment................119
vi
<PAGE>
INDENTURE, dated as of ______ ___, 1997, between CalEnergy Company,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 302
South 36th Street, Suite 400, Omaha, Nebraska 68131, and The Bank of New York,
a New York banking corporation having its principal corporate trust office at
101 Barclay Street, Floor 21 West, New York, New York 10286, as trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its secured or
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the "Debentures"), to be issued in one or more series as in this
Indenture provided.
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of a series thereof,
as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
<PAGE>
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and,
except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United
States of America at the date of such computation; and
(d) The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Debenture, has the
meaning specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place, in connection with which the term is
used, or in the financial community of such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is payable to bearer.
2
<PAGE>
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means 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, and delivered to the Trustee.
"Book-Entry Debenture" means a Debenture bearing the legend specified
in Section 2.4, evidencing all or part of a series of Debentures, issued to
the Depository for such series or its nominee, and registered in the name of
such Depository or nominee. Book-Entry Debentures shall not be deemed to be
securities in global form for purposes of Sections 2.1 and 2.3 and Article III
of this Indenture.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debentures,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"CalEnergy Trust" means each of CalEnergy Capital Trust IV, V and VI,
each, a Delaware statutory business trust.
"Cedel S.A." means Cedel Bank, Societe Anonyme, or its successor.
"Commission" means the United States Securities and Exchange
Commission.
"Common Depository" has the meaning specified in Section 3.4.
"Common Securities" means undivided beneficial interests in the assets
of a CalEnergy Trust which rank pari passu with Preferred Securities issued by
such CalEnergy Trust; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect
to distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
3
<PAGE>
"Common Securities Guarantee" means any Guarantee that the Company
enters into with The Bank of New York or other Persons that operates directly
or indirectly for the benefit of holders of Common Securities of a CalEnergy
Trust.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
anti-dilution provisions of any convertible Debenture, however, shares of
CalEnergy Common Stock issuable on conversion of a Debenture shall include only
shares of the class designated as Common Stock of the Company at the date of
any supplemental indenture, Board Resolution or other instrument authorizing
such Debenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of the payment of dividends or the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, that if at
any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total num ber of shares of such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President, its Treasurer or its
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Coupon" means any interest coupon appertaining to a Bearer Debenture.
4
<PAGE>
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 3.5.
"Debentures" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and
delivered under this Indenture.
"Declaration", with respect to a CalEnergy Trust, means the Amended
and Restated Declaration of Trust of such CalEnergy Trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.4.
"Depository" means, with respect to the Debentures of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Debentures of such series, the clearing agency registered under the Exchange
Act specified for that purpose as contemplated by Section 3.1.
"Direct Action" means a proceeding instituted by a holder of Preferred
Securities of a CalEnergy Trust directed against the Company to enforce rights
under the Debentures issued to such CalEnergy Trust in certain circumstances,
as specified in Section 5.16.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time.
"Exchange Date" has the meaning specified in Section 3.4.
5
<PAGE>
"Guarantor" means CalEnergy Company Inc., a Delaware corporation, in
its capacity as guarantor under any Trust Securities Guarantees.
"Holder", when used with respect to any Debenture, means, in the case
of a Registered Debenture, the Person in whose name the Debenture is registered
in the Debenture Register and, in the case of a Bearer Debenture, the bearer
thereof and, when used with respect to any Coupon, the bearer thereof.
"Indenture" means 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 pursuant to the applicable provisions hereof
and shall include the terms of Debentures of any series established as
contemplated by Section 3.1.
"Interest", when used with respect to any Original Issue Discount
Debenture which by its terms bears interest only at Maturity, means interest
payable at Maturity.
"Interest Payment Date", when used with respect to any Debenture,
means the Stated Maturity of an installment of interest on such Debenture.
"Maturity", when used with respect to any Debenture, means the date on
which the principal of such Debenture or an installment of such principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Company and delivered to the Trustee. The
officer signing an Officer's Certificate given pursuant to Section 10.9 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Debenture" means any Debenture which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
6
<PAGE>
"Outstanding", when used with respect to Debentures of any series,
means, as of the date of determination, all Debentures of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures of such series theretofore cancelled by the
Trustee or any Paying Agent or delivered to the Trustee for
cancellation or that have previously been cancelled;
(ii) Debentures of such series for whose payment or redemption of
which money or United States Government Obligations in the
necessary amount has been theretofore deposited in accordance
with Article IV with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for
the Holders of Debentures of such series and any Coupons
appertaining thereto; provided that, if Debentures of such
series or portions of Debentures of such series are to be
redeemed prior to the Maturity thereof, notice of such redemption
has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Debentures of such series which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other
Debentures of such series have been authenticated and delivered
pursuant to this Indenture, other than any Debentures of such
series in respect of which there shall have been presented to the
Trustee proof satisfactory to it that Debentures of such series
are held by a bona fide purchaser in whose hands Debentures of
such series are valid obligations of the Company; and
(iv) Debentures of such series as to which Defeasance has been
effected pursuant to Section 4.4;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Debentures of such series have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder or whether a quorum is present at a meeting of Holders of Debentures
of such series (A) the principal amount of an Original Issue Discount Debenture
of such series that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of
7
<PAGE>
the Maturity thereof pursuant to Section 5.2, (B) the principal amount of a
Debenture of such series denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Debenture, of the principal amount (or, in the case of an Original Issue
Discount Debenture of such series, the U.S. dollar equivalent on the date of
original issuance of such Debenture of the amount determined as provided in (A)
above) of such Debenture, and (C) Debentures of such series owned by the
Company or any other obligor upon such Debentures, or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, or upon any such determination as to the presence of a
quorum, only Debentures of such series which the Trustee actually knows to be
so owned shall be so disregarded. Debentures of such series so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company or any
other obligor upon such Debentures or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and any premium and interest on any Debentures or any Coupons
appertaining thereto on behalf of the Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, association, joint stock company,
limited liability company, unincorporated association or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Place of Payment", when used with respect to the Debentures of any
series, means the place or places where, subject to the provisions of Section
10.2, the principal of and any premium and interest on Debentures of such
series are payable as specified as contemplated by Section 3.1.
"Predecessor Debenture" of a Debenture of any series means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such Debenture; and, for the purposes of this definition, a
Debenture of any series authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, de stroyed, lost or stolen Debenture or
a Debenture to which a mutilated, destroyed, lost or stolen Coupon appertains
shall be deemed to evidence the same debt as the muti-
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lated, destroyed, lost or stolen Debenture or the Debenture to which the
mutilated, destroyed, lost or stolen Coupon appertains, as the case may be.
"Preferred Securities" means undivided beneficial interests in the
assets of a CalEnergy Trust which rank pari passu with Common Securities issued
by such CalEnergy Trust; provided, however, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to payment in
respect to distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any Guarantee that the
Guarantor may enter into with The Bank of New York or other Persons that
operates directly or indirectly for the benefit of the holders of the
Preferred Securities of such CalEnergy Trust.
"Property Trustee" has the meaning set forth in the Declaration of the
applicable CalEnergy Trust.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is registered in the Debenture Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on Registered Debentures of any series means the date specified for that
purpose as contemplated by Section 3.1, whether or not such day is a Business
Day.
"Responsible Officer" means, when used with respect to the Trustee,
the chairman of the board of directors, the executive committee of the board
of directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a
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particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means, with respect to Debentures of any series,
in respect of the Company (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of such obligor for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by such obligor, (ii) all capital lease obligations of such
obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement of 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) above of other Persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise, and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
Persons secured by any lien on any property or asset of such obligor (whether
or not such obligation is assumed by such obligor), except for (1) any such
indebtedness issued after the date of original issuance of the Debentures of
such series that is by its terms subordinated to or pari passu with the
Debentures of such series and (2) any indebtedness (including all other debt
securities and guarantees in respect of those debt securities) initially
issued to any other trust, or a trustee of such trust, partnership, or other
entity affiliated with the Company that is, directly or indirectly, a
financing vehicle of the Company (a "Financing Entity") in connection with the
issuance by such Financing Entity of preferred securities or other securities
which by their terms rank pari passu with, or junior to, the Preferred
Securities of the CalEnergy Trust that is the holder of the Debentures of such
series.
"Special Record Date" for the payment of any Defaulted Interest on
Registered Debentures of any series means a date fixed by the Trustee pursuant
to Section 3.7.
"Stated Maturity", when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means the date specified
in such Debenture or a Coupon representing such installment of interest as the
fixed date on which the principal of such Debenture or such installment of
principal or interest is due and payable, as such date may, in the case of the
stated maturity of the principal on any Debenture, be shortened as provided
pursuant to the terms of such Debenture and, in the
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case of any installment of interest, subject to the deferral of such date in
the case of the Company's election to defer payments of interest on Debentures
of such series by extending the interest payment period.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by
such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof, directly
or indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities
of a CalEnergy Trust.
"Trust Securities Guarantees" means the Common Stock Guarantee and the
Convertible Preferred Securities Guarantee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this - Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to Debentures of any series shall mean the Trustee with respect to
Debentures of such series.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the
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members of which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a nonresident alien fiduciary
of a foreign estate or trust or a foreign partnership.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended)
as custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations
held by such custodian for the account of the holder of such depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligations or the specific payment of principal of or interest
on the U.S. Government Obligations evidenced by such depository receipt.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock," of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Yield to Maturity" means the yield to maturity on Debentures of any
series, calculated at the time of issuance of such series, or, if applicable,
at the most recent redetermination of interest on such series, and calculated
in accordance with accepted financial practice.
SECTION 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of
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this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, 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, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 10.9, shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, the
individual has made such examination or investigation as is
necessary to enable such individual 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
individual, such condition or covenant has been complied with.
SECTION 1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. If Debentures of any series are issuable as Bearer
Debentures of such series, any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this
Indenture to be given or taken by Holders of Debentures of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Debentures of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Debentures of
such series duly called and held in accordance with the provisions of Article
XIII, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Debenture of any series, shall be
sufficient for any purpose of this Indenture and (subject to Section 6.3)
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conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Debentures of
any series shall be proved in the manner provided in Section 13.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or other such
officer the execution thereof. Where such execution is by a signer acting in a
capacity other than the signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of the signer's authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee reasonably deems sufficient.
(c) The principal amount and serial numbers of Registered Debentures
of any series held by any Person, and the date of holding the same, shall be
proved by the Debenture Register.
(d) The principal amount and serial numbers of Bearer Debentures of
any series held by any Person, and the date of holding the same, may be proved
by the production of such Bearer Debentures or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Debentures therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Debentures, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Debenture continues until (i) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Debenture is produced, or (ii) such Bearer Debenture is produced to the
Trustee by some other Person, or (iii) such Bearer Debenture is surrendered in
exchange for a Registered Debenture of such series, or (iv) such Bearer
Debenture is no longer Outstanding. The principal amount and serial numbers of
Bearer Debentures held by any Person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
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(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Debenture of any series shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(f) With respect to the Debentures of any series, upon receipt by the
Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
5.1 with respect to Debentures of such series or (ii) any written demand,
request or notice with respect to any matter on which the Holders of Debentures
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, the requisite
principal amount of Outstanding Debentures of such series entitled to give such
demand, request or notice, the Trustee shall establish a record date for
determining Holders of Outstanding Debentures of such series entitled to join
in such demand, request or notice, which record date shall be the close of
business on the day the Trustee received such demand, request or notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such demand, request or notice whether or
not such Holders remain Holders after such record date; provided, however, that
unless the Holders of the requisite principal amount of Outstanding Debentures
of such series shall have joined in such demand, request or notice prior to
the day which is the ninetieth day after such record date, such demand, request
or notice shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, (i) after the expiration of such
90-day period, a new demand, request or notice identical to a demand, request
or notice which has been canceled pursuant to the proviso to the preceding
sentence or (ii) during any such 90-day period, a new demand, request or notice
which has been canceled pursuant to the proviso to the preceding sentence or
(iii) during any such 90-day period, a new demand, request or notice contrary
to or different from such demand, request or notice, in either of which events
a new record date shall be established pursuant to the provisions of this
clause.
(g) The Company may set any day as the record date for the purpose of
determining the Holders of Outstanding Debentures of any series entitled to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Deben-
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tures of such series. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Debentures of such series on such record
date (or their duly appointed agents), and only such Persons, shall be entitled
to give or take the relevant action, whether or not such Holders remain
Holders after such record date. With regard to any action that may be given or
taken hereunder only by Holders of a requisite principal amount of Outstanding
Debentures of any series (or their duly appointed agents) and for which a
record date is set pursuant to this paragraph, the Company may, at its option,
set an expiration date after which no such action purported to be given or
taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Debentures of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or different from,
any action given or taken, or purported to have been given or taken, hereunder
by a Holder on or prior to such date, in which event the Company may set a
record date in respect thereof pursuant to this clause. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this clause shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 5.1, 5.2 or 5.12.
SECTION 1.5 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Trustee Administration, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this
Indenture, to the attention of its Treasurer, or at any
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other address previously furnished in writing to the Trustee by
the Company.
SECTION 1.6 Notice to Holders of Debentures; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Debentures of any event:
(a) such notice shall be sufficiently given to Holders of
Registered Debentures of any series if in writing and mailed,
first-class postage prepaid, to each Holder of a Registered
Debenture affected by such event, at the address of such Holder
as it appears in the Debenture Register, not earlier than the
earliest date, and not later than the latest date, prescribed for
the giving of such notice; and
(b) such notice shall be sufficiently given to Holders of Bearer
Debentures of any series if published in an Authorized Newspaper
in The City of New York, The City of London and in such other
city or cities as may be specified in such Debentures on a
Business Day at least twice, the first such publication to be not
earlier than the earliest date, and the second such publication
to be not later than the latest date, prescribed for the giving
of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Debentures by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. In any case where notice to Holders
of Registered Debentures is given by mail, neither the failure to mail such
notice, nor any defect in any notice mailed to any particular Holder of a
Registered Debenture shall affect the sufficiency of such notice with respect
to other Holders of Registered Debentures or the sufficiency of any notice to
Holders of Bearer Debentures given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Debentures as provided
above, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither the failure to give
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notice by publication to Holders of Bearer Debentures as provided above, nor
any defect in any notice so published, shall affect the sufficiency of any
notice to Holders of Registered Debentures given as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7 Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
SECTION 1.8 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 1.9 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.10 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 1.11 Separability Clause.
In case any provision in this Indenture or the Debentures or Coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.12 Benefits of Indenture.
Nothing in this Indenture or the Debentures or Coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Debentures Registrar and their
successors hereunder and the Holders of Debentures and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.13 Governing Law.
THIS INDENTURE AND THE DEBENTURES AND COUPONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.14 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date, Maturity or Stated Maturity of a Debenture of any series or
the last date on which a Holder has the right to convert a Debentures of any
series shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Debentures or
Coupons other than a provision in Debentures of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or principal (and premium, if any) or conversion of the Debentures
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day (except that, if such Business Day is in the next
succeeding calendar year, such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, shall be the immediately preceding Business Day)
at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity or on such
last day for conversion, provided that no interest shall accrue on the amount
so payable for
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the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such succeeding Business Day.
SECTION 1.15 Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due on Debentures of any series
from the currency in which such sum is payable in accordance with the terms of
such Debentures (the "Required Currency") into a currency in which a judgment
will be rendered (the "Judgment Currency"), the rate of exchange used shall be
the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding that on which a final
unappealable judgment is rendered and (b) its obligations under this Indenture
to make payments in the Required Currency (i) shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection (a)), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
SECTION 1.16 Immunity of Incorporators, Shareholders, Officers, Directors and
Employees.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of a Debenture of any series, or for any claim based
thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer, director or employee, as such, past, present or future,
of the Company or of any successor corporation, either directly or through the
Company, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or other-
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wise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations of the Company, and that no
such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers, directors or employees, as such,
of the Company or of any successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations or agreements contained in this Indenture or in any of the
Debentures or implied therefrom; and that any and all such personal liability,
either at common law or in equity or by constitution or statute, of, and any
and all such rights and claims against, every such incorporator, shareholder,
officer, director or employee, as such, because of the creation of the
indebtedness hereby authorized, or under of by reason of the obligations or
agreements contained in this Indenture or in any of the Debentures or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Debentures.
All payments of interest and other amounts, if any, to be made by the
Trustee hereunder shall be made only from the money deposited with the Trustee
and only to the extent that the Trustee shall have sufficient income or
proceeds to make such payments in accordance with the terms of this Indenture,
and each Holder thereof, by its acceptance of a Debenture, agrees that it will
look solely to the income and proceeds deposited with the Trustee to the
extent available for distribution to such Holder as provided and that the
Trustee is not personally liable in any manner to such Holder for any amounts
payable or any liability under this Indenture or any Debenture.
ARTICLE II
DEBENTURE FORMS
SECTION 2.1 Forms Generally.
The Registered Debentures, if any, of each series and the Bearer
Debentures, if any, of each series and related Coupons shall be in such form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of iden-
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tification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or as may, consistently
herewith, be determined by the officers executing such Debentures or Coupons,
as evidenced by their execution of the Debentures or Coupons. If temporary
Debentures of any series are issued in global form as permitted by Section 3.4,
the form thereof shall be established as provided in the preceding sentence. If
the forms of Debentures or Coupons of any series (or any such temporary global
Debenture) are established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the
Secretary or any Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 3.3 for the authentication and delivery of such Debentures (or any such
temporary global Debenture) or Coupons.
Unless otherwise specified as contemplated by Section 3.1, Debentures
in bearer form shall have interest Coupons attached.
The definitive Debentures and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debentures or
Coupons, as evidenced by their execution of such Debentures or Coupons.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By:
---------------------------
Authorized Signatory
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SECTION 2.3 Debentures in Global Form.
If Debentures of any series are issuable in global form, as specified
as contemplated by Section 3.1, then, notwithstanding clause (e) of Section
3.1 and the provisions of Section 3.2, any such Debenture shall represent such
of the Outstanding Debentures of such series as shall be specified therein and
may provide that it shall represent the aggregate amount of Outstanding
Debentures of such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Debentures of such series represented thereby
may from time to time be reduced to reflect exchanges. Any endorsement of a
Debenture in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Debentures of such series represented thereby shall
be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or Section 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Debenture in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Debenture in global form
shall be in writing but need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Debenture represented by a Debenture in global form if such Debenture was never
issued and sold by the Company and the Company delivers to the Trustee the
Debenture in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Debentures represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of
and any premium and interest on any Debenture in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the
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Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Debentures represented by a permanent global Debenture as shall be
specified in a written statement of the Holder of such permanent global
Debenture or, in the case of a permanent global Debenture in bearer form, of
Euro-clear or Cedel S.A. which is provided to the Trustee by such Person.
SECTION 2.4 Form of Legend for Book-Entry Debentures.
Any Book-Entry Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Debenture is a Book-Entry Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. This Debenture is exchangeable for Debentures
registered in the name of a Person other than the Depository or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except
in such limited circumstances."
SECTION 2.5 Form of Conversion Notice.
The Form of conversion notice for the conversion of Debentures into
shares of Common Stock or other securities of the Company (the "Conversion
Notice") shall be in substantially the form included with the applicable form
of Debentures as shall be established pursuant to Section 2.1 hereinabove.
ARTICLE III
THE DEBENTURES
SECTION 3.1 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
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The Debentures may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Debentures of any series:
(a) the title of the Debentures of the series (which shall distinguish the
Debentures of the series from all other series of Debentures);
(b) any limit upon the aggregate principal amount of the
Debentures of the series which may be authenticated and delivered
under this Indenture (except for Debentures of the series
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Debentures of the series
pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for
any Debentures of the series which, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered hereunder);
(c) whether Debentures of the series are to be issuable as
Registered Debentures, Bearer Debentures or both, whether any
Debentures of the series are to be issuable initially in
temporary global form and whether any Debentures of the series
are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in
any such permanent global Debenture may exchange such interests
for Debentures of the series and of like tenor of any authorized
form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in
Section 3.5;
(d) the Person to whom any interest on any Registered Debenture
of the series shall be payable, if other than the Person in whose
name that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date
for such interest, the manner in which, or the Person to whom,
any interest on any Bearer Debenture of the series shall be
payable, if otherwise than upon presentation and surrender of the
coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on
a temporary global Debenture on an Interest Payment Date will be
paid if other than in the manner provided in Section 3.4;
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(e) the date or dates, or the method by which such date or dates
will be determined or extended, on which the principal of the
Debentures of the series is payable;
(f) the rate or rates at which the Debentures of the series shall
bear interest, if any, or the formula pursuant to which such
rate or rates shall be determined, the date or dates from which
any such interest shall accrue, the Interest Payment Dates on
which any such interest shall be payable, and the Regular Record
Date for any interest payable on any Registered Debentures on any
Interest Payment Date and the basis upon which interest shall be
calculated if other than that of a 360-day year consisting of
twelve 30-day months;
(g) the place or places where, subject to the provisions of
Sections 11.4 and 10.2, the principal of and any premium and
interest on Debentures of the series shall be payable, any
Registered Debentures of the series may be surrendered for
registration of transfer, Debentures of the series may be
surrendered for conversion or exchange, notices and demands to or
upon the Company in respect of the Debentures of the series and
this Indenture may be served and where notices to Holders of
Bearer Debentures of the series pursuant to Section 1.6 will be
published;
(h) the right, if any, to extend the interest payment periods in
respect of the Debentures of the series and the duration of such
extension;
(i) the period or periods within which, the price or prices at
which and the terms and conditions upon which Debentures of the
series may be redeemed, in whole or in part, at the option of the
Company;
(j) the obligation, if any, of the Company to redeem, repay or
purchase Debentures of the series, or any Debentures within the
series, pursuant to any sinking fund or analogous provisions and
the period or periods within which, the price or prices at which
and the terms and conditions upon which such Debentures shall be
redeemed, repaid or purchased, in whole or in part, pursuant to
such obligation;
(k) the terms of any right to convert or exchange Debentures of
the series, either at the election of the Holder thereof or the
Company, into or
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for shares of Common Stock of the Company or other securities or
property, including, without limitation, the period or periods
within which and the price or prices (including adjustments
thereto) at which any Debentures of the series shall be
converted or exchanged, in whole or in part and any other
provision in addition to or in lieu of those set forth in this
Indenture;
(l) the denominations in which any Registered Debentures of the
series shall be issuable, if other than denominations of $1,000
and any integral multiple thereof, and the denomination or
denominations in which any Bearer Debentures of the series shall
be issuable, if other than the denomination of $5,000;
(m) the currency or currencies, including composite currencies,
in which payment of the principal of and any premium and interest
on the Debentures of the series shall be payable if other than
the currency of the United States of America;
(n) if the principal of and any premium or interest on the
Debentures of the series are to be payable, at the election of
the Holder thereof or the Company, in a currency or currencies,
including composite currencies, other than that or those in which
the Debentures of the series are stated to be payable, the
currency or currencies in which payment of the principal of and
any premium and interest on Debentures of the series as to which
such election is made shall be payable, and the periods within
which and the terms and conditions upon which such election is to
be made;
(o) if the amount of payments of principal of and any premium or
interest on the Debentures of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(p) if other than the principal amount thereof, the portion of
the principal amount of any Debentures of the series which shall
be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.2;
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(q) the Person who shall be the Debenture Registrar, if other
than the Trustee;
(r) whether the Debentures of the series shall be issued upon
original issuance in whole or in part in the form of one or more
Book-Entry Debentures and, in such case, (a) the Depository with
respect to such Book-Entry Debenture or Debentures; and (b) the
circumstances under which any such Book-Entry Debenture may be
exchanged for Debentures registered in the name of, and any
transfer of such Book-Entry Debenture may be registered to, a
Person other than such Depository or its nominee, if other than
as set forth in Section 3.5;
(s) if the provisions of Section 4.4 or 4.5 are applicable to the
Debentures of the series;
(t) provisions, if any, granting special rights to the Holders of
Debentures of the series upon the occurrence of such events as
may be specified;
(u) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to
Debentures of the series, whether or not such Events of Default
or covenants are consistent with the Events of Default or
covenants set forth herein;
(v) whether and under what conditions additional amounts will be
payable to Holders of Debentures of the series pursuant to
Section 10.6;
(w) the terms and conditions, if any, pursuant to which
Debentures of the series are secured;
(x) the subordination terms of the Debentures of the series; and
(y) any other terms of the Debentures of the series.
All Debentures of any series and the coupons appertaining to any
Bearer Debentures of such series shall be substantially identical except, in
the case of Registered Debentures of such series, as to denomination and except
as may otherwise be provided in or pursuant to the Board Resolution referred
to above and (subject to Sec-
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tion 3.3) set forth in, or determined in the manner provided in, the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
Not all Debentures of any series need be issued at the same time, and, unless
otherwise provided, a series may be reopened for issuances of additional
Debentures of such series.
If any of the terms of the Debenture of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms, or the manner of determining the terms, of the series.
SECTION 3.2 Denominations.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, any Registered Debentures shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Debentures shall be issuable in the denomination of $5,000.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
Debentures and Coupons shall be signed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents. The signature of any of these officers on Debentures may
be manual or facsimile.
Debentures and Coupons bearing the manual or facsimile signatures of
individu als who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series, together
with any Coupons appertaining thereto executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of Debentures of such series, and the Trustee in accordance with the
Company Order shall authenticate and make Debentures of such series available
for delivery; provided, however, that, in connection with its original
issuance, no Bearer Debenture of such series shall be
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mailed or otherwise delivered to any location in the United States; and
provided, further, that a Bearer Debenture of such series may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Debenture shall have furnished a certificate in the form specified
in the Debenture of such series as to certain tax matters in respect of United
States citizens, dated no earlier than 15 days prior to the earlier of the date
on which the Bearer Debenture of such series is delivered and the date on which
any temporary global Debenture first becomes exchangeable for such Bearer
Debenture of such series in accordance with the terms of such temporary global
Debenture and this Indenture. If any Debenture of such series shall be
represented by a permanent global Bearer Debenture of such series, then, for
purposes of this Section and Section 3.4, the notation of a beneficial owner's
interest therein upon original issuance of such Debenture or upon exchange of a
portion of a temporary global Debenture shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Debenture. Except as permitted by Section 3.6, the
Trustee shall not authenticate and deliver any Bearer Debenture of such series
unless all appurtenant Coupons for interest then matured have been detached and
cancelled.
If all the Debentures of any series are not to be issued at one time
and if the Board Resolution and indenture supplement establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of Debentures of such series and determining the
terms of such series, such as interest rate, maturity date, date of issuance
and date from which interest shall accrue.
If the forms or terms of the Debentures of any series, together with
any Coupons appertaining thereto, have been established in or pursuant to one
or more Board Resolutions as permitted by Sections 2.1 and 3.1, in
authenticating Debentures of such series, and accepting the additional
responsibilities under this Indenture in relation to such Debentures of such
series, the Trustee shall be entitled to receive, and (subject to Section 6.3)
shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) that such forms have been established in conformity with the
provisions of this Indenture;
(b) that such terms, or the manner of determining such terms,
have been established in conformity with the provisions of this
Indenture;
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(c) that Debentures of such series, together with any Coupons
appertaining thereto, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights generally
and general equity principles (regardless of whether
enforceability is considered in a proceeding at law or equity);
and
(d) that all laws and requirements in respect of the execution
and delivery by the Company of Debentures of such series have
been complied with.
If such forms or terms have been so established, the Trustee shall not
be required to authenticate Debentures of such series if the issue of such
Debentures pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under such Debentures and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all Debentures of any series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 3.1 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraphs at or prior to
the time of authentication of each Debenture of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Debenture of such series to be issued.
Each Registered Debenture of any series shall be dated the date of its
authentication; and each Bearer Debenture shall be dated as of the date of
original issuance of the first Debenture of such series to be issued.
No Debenture of any series or any Coupon appertaining thereto shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on the Debenture, or the Coupon appertaining to
such Debenture, a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be
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conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Debenture shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Debenture to
the Trustee for cancellation as provided in Section 3.9 together with a written
statement (which need not comply with Section 1.2 and need not be accompanied
by an Opinion of Counsel) stating that such Debenture has never been issued
and sold by the Company, for all purposes of this Indenture such Debenture
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 3.4 Temporary Debentures.
Pending the preparation of definitive Debentures of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Debentures of such series which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Debentures of such series in lieu of which they are issued, in registered form
or, if authorized, in bearer form with one or more coupons or without coupons,
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Debentures or Coupons may determine,
as evidenced by their execution of such Debentures or Coupons. In the case of
Debentures of any series issuable as Bearer Debentures, such temporary
Debentures may be in global form. A temporary Bearer Debenture shall be
delivered only in compliance with the conditions set forth in Section 3.3.
Except in the case of temporary Debentures in global form issued in a
transaction exempt from registration under the Securities Act of 1933, as
amended, pursuant to Regulation S thereunder (a "Regulation S Debenture")(which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debentures of any series are issued, the Company
will cause definitive Debentures of such series to be prepared without
unreasonable delay. After the preparation of definitive Debentures of such
series, the temporary Debentures of such series shall be exchangeable for
definitive Debentures of such series upon surrender of the temporary Debentures
of such series at the office or agency of the Company maintained pursuant to
Section 10.2 in a Place of Payment for such series for the purpose of ex-
changes of Debentures of such series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Debentures of any
series (accompa-
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nied by any unmatured Coupons appertaining thereto) the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a like aggregate principal amount of definitive Debentures of such
series and of like tenor of authorized denominations; provided, however, that
no definitive Bearer Debenture shall be delivered in exchange for a temporary
Registered Debenture.
If temporary Regulation S Debentures of any series are issued in
global form, any such temporary global Regulation S Debenture shall, unless
otherwise provided therein, be delivered to the London office of a depositary
or common depositary (the "Common Depositary"), for the benefit of Euro-clear
and Cedel S.A., for credit to the respective accounts of the beneficial owners
of such Debentures (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Regulation S Debenture of any series (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Debentures of such series, in aggregate
principal amount equal to the principal amount of such temporary global
Regulation S Debenture, executed by the Company. On or after the Exchange Date
such temporary global Regulation S Debenture shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Debentures of
such series without charge and the Trustee shall authenticate and make
available for delivery, in exchange for each portion of such temporary global
Regulation S Debenture, a like aggregate principal amount of definitive
Debentures of such series of authorized denominations and of like tenor as the
portion of such temporary global Regulation S Debenture to be exchanged;
provided, however, that, unless otherwise specified in such temporary global
Regulation S Debenture, upon such presentation by the Common Depositary, such
temporary global Regulation S Debenture is accompanied by a certificate dated
the Exchange Date or a subsequent date and signed by Euro-clear as to the
portion of such temporary global Regulation S Debenture held for its account
then to be exchanged and a certificate dated the Exchange Date or a subsequent
date and signed by Cedel S.A. as to the portion of such temporary global
Regulation S Debenture held for its account then to be exchanged, each in the
form or in such form as shall be specified in such Regulation S Debenture. The
definitive Debentures of such series to be delivered in exchange for any such
temporary global Regulation S Debenture shall be in bearer form, registered
form, permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 3.1, and,
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if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that definitive Bearer Debentures of such
series shall be delivered in exchange for a portion of a temporary global
Regulation S Debenture of such series only in compliance with the requirements
of Section 3.3.
Unless otherwise specified in such temporary global Regulation S
Debenture, the interest of a beneficial owner of Debentures of any series in a
temporary global Regulation S Debenture shall be exchanged for definitive
Debentures of such series and of like tenor following the Exchange Date when
the account holder instructs Euro-clear or Cedel S.A., as the case may be, to
request such exchange on the Holder's behalf and delivers to Euro-clear or
Cedel S.A., as the case may be, a certificate in such form as shall be
specified in the Regulation S Debenture of such series, dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euro-clear and Cedel S.A., the Trustee, any
Authenticating Agent appointed for the Debentures of such series and each
Paying Agent. Unless otherwise specified in such temporary global Regulation S
Debenture, any such exchange shall be made free of charge to the beneficial
owners of such temporary global Regulation S Debenture, except that a Person
receiving definitive Debentures of such series must bear the cost of insurance,
postage, transportation and the like in the event that such Person does not
take delivery of such definitive Debentures of such series in person at the
offices of Euro-clear or Cedel S.A. Definitive Debentures of such series in
bearer form to be delivered in exchange for any portion of a temporary global
Regulation S Debenture of such series shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary
Regulation S Debentures of any series shall in all respects be entitled to such
benefits under this Indenture as definitive Debentures of such series and of
like tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.1, interest payable on a temporary
global Regulation S Debenture of such series on an Interest Payment Date for
Debentures of such series occurring prior to the applicable Exchange Date shall
be payable to Euro-clear and Cedel S.A. on such Interest Payment Date upon
delivery by Euro-clear and Cedel S.A. to the Trustee of a certificate or
certificates in such form as shall be specified in the Debenture of such
series, for credit without further interest on or after such Interest Payment
Date to the respective accounts of the Persons who are the beneficial owners of
such temporary global Regulation S Debenture on such Interest Payment Date and
who have each delivered to Euro-clear or Cedel S.A., as the case may be, a
certificate in such form
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as shall be specified in the Debenture of such series. Any interest so received
by Euro-clear and Cedel S.A. and not paid as herein provided shall be returned
to the Trustee immediately prior to the expiration of two years after such
Interest Payment Date in order to be repaid to the Company in accordance with
Section 10.3.
SECTION 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.2 a register (the
"Debenture Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Debentures and the registration of transfers of Registered Debentures. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of
registering Registered Debentures and transfers of Regis tered Debentures as
herein provided.
Upon due surrender for registration of transfer of any Registered
Debenture of any series at the office or agency of the Company maintained
pursuant to Section 10.2 for such purpose in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Registered Debentures of such series of any
authorized denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Debentures of any series may
be exchanged for other Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Debentures to be exchanged at any such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
the Debentures which the Holder making the exchange is entitled to receive.
Registered Debentures may not be exchanged for Bearer Debentures.
At the option of the Holder, Bearer Debentures of any series may be
exchanged for Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Debentures of such series to be exchanged at any such
office or agency, with all unmatured Coupons, and all matured Coupons in
default appertaining thereto. If the Holder of a Bearer Debenture of such
series is unable to produce any such unmatured Coupon or
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Coupons or matured Coupon or Coupons in default, such exchange may be effected
if the Bearer Debentures of such series are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Debentures of such series
shall surrender to any Paying Agent any such missing Coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 10.2, interest represented by Coupons shall be payable
only upon presentation and surrender of those Coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in case a
Bearer Debenture of any series is surrendered at any such office or agency in
exchange for a Registered Debenture of such series and of like tenor after the
close of business at such office or agency on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening
of business at such office or agency on the related proposed date for payment
of Defaulted Interest, the Bearer Debenture of such series shall be surrendered
without the Coupon relating to such Interest Payment Date or proposed date for
payment, as the case may be, and interest or Defaulted Interest, as the case
may be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Debenture of such
series issued in exchange for such Bearer Debenture, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Whenever any Debentures of any series are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery, the Debentures of such series which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Debenture of any series shall
be exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Debenture of any series are entitled to
exchange such interests for Debentures of such series and of like principal
amount and tenor of another authorized form and denomination, as specified as
contemplated by Section 3.1, then without unnecessary delay but in any event
not later than the earliest date on which such interests
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may be so exchanged, the Company shall deliver to the Trustee definitive
Debentures of such series in aggregate principal amount equal to the principal
amount of such permanent global Debenture, executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Debenture of any series shall be surrendered by the Common Depositary or
such other depositary or Common Depositary as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Debentures of such series without charge and the Trustee shall authenticate and
make available for delivery, in exchange for each portion of such permanent
global Debenture, a like aggregate principal amount of definitive Debentures
of such series of authorized denominations and of like tenor as the portion of
such permanent global Debenture of such series to be exchanged which, unless
the Debentures of such series are not issuable both as Bearer Debentures and as
Registered Debentures of such series, as specified as contemplated by Section
3.1, shall be in the form of Bearer Debentures or Registered Debentures of such
series, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no Bearer Debenture of such series
delivered in exchange for a portion of a permanent global Debenture of such
series shall be mailed or otherwise delivered to any location in the United
States. If a Registered Debenture of such series is issued in exchange for any
portion of a permanent global Debenture of such series after the close of
business at the office or agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such office or agency on the
relevant Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Debenture of such
series, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Debenture of such series is payable in
accordance with the provisions of this Indenture.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
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Every Registered Debenture presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the Trustee
or any transfer agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Debenture
Registrar or any transfer agent duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Debentures of any series during a period beginning at the
opening of business 15 days before any selection of Debentures of such series
to be redeemed and ending at the close of business on (A) if Debentures of such
series are issuable only as Registered Debentures, the day of the mailing of
the relevant notice of redemption and (B) if Debentures of such series are
issuable as Bearer Debentures, the day of the first publication of the relevant
notice of redemption or, if Debentures of such series are also issuable as
Registered Debentures and there is no publication, the mailing of the relevant
notice of redemption, (ii) to register the transfer of or exchange any
Registered Debenture so selected for redemption, in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part, or (iii) to
exchange any Bearer Debenture so selected for redemption except that such a
Bearer Debenture may be exchanged for a Registered Debenture of such series and
like tenor, provided that such Registered Debenture shall be simultaneously
surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Book-Entry Debenture shall be exchangeable
pursuant to this Section 3.5 or Sections 3.4, 9.6 and 11.7 for Debentures
registered in the name of, and a transfer of a Book-Entry Debenture of any
series may be registered to, any Person other than the Depository for such
Debenture or its nominee only if (i) such Depository notifies the Company that
it is unwilling or unable to continue as Depository for such Book-Entry
Debenture or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, (ii) the Company executes and delivers to
the Trustee a Company Order that such Book-Entry Debenture shall be so
exchangeable and the transfer thereof so registerable or (iii) there shall have
occurred and be continuing an Event of Default, or an event which after notice
or lapse of time
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would be an Event of Default, with respect to the Debentures of such series.
Upon the occurrence in respect of any Book-Entry Debenture of any series of any
one or more of the conditions specified in clauses (i), (ii) or (iii) or the
preceding sentence or such other conditions as may be specified as contemplated
by Section 3.1 for such series, such Book-Entry Debenture may be exchanged for
Debentures registered in the names of, and the transfer of such Book-Entry
Debenture may be registered to, such Persons (including Persons other than the
Depository with respect to such series and its nominees) as such Depository
shall direct. Notwithstanding any other provision of this Indenture, any
Debenture authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Book-Entry Debenture shall also be a
Book-Entry Debenture and shall bear the legend specified in Section 2.4 except
for any Debenture authenticated and delivered in exchange for, or upon
registration of transfer of, Book-Entry Debenture pursuant to the preceding
sentence.
Notwithstanding anything in this Indenture or in the terms of a
Debenture to the contrary, the exchange of Bearer Debentures for Registered
Debentures will be subject to satisfaction of the provisions of the United
States federal income tax laws in effect at the time of such exchange. None of
the Company, the Trustee or any Authenticating Agent of the Company or the
Trustee (any of which, other than the Company, shall rely on an Officers'
Certificate and an Opinion of Counsel) shall be required to exchange any Bearer
Debenture for a Registered Debenture if as a result thereof and in the
Company's reasonable judgment, the Company would incur adverse consequences
under then applicable United States federal income tax laws.
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures and Coupons.
If any mutilated Debenture of any series or a Debenture of any series
with a mutilated Coupon appertaining thereto is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and make available
for delivery in exchange therefor a new Debenture of such series and of like
principal amount and tenor and bearing a number not contemporaneously
outstanding, with Coupons corresponding to the Coupons, if any, appertaining to
the surrendered Debenture and such mutilated Debenture or a Debenture with a
mutilated Coupon, if any, shall be cancelled by the Trustee in accordance with
the Indenture.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture of any series or any Coupon appertaining thereto and (ii) such
security or indemnity as may be required
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by them, then, in the absence of notice to the Company or the Trustee that such
Debenture or Coupon has been acquired by a bona fide purchaser, the Company
shall, subject to the following paragraph, execute, and the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Debenture or in exchange for the Debenture to which a destroyed,
lost or stolen Coupon appertains (with all appurtenant Coupons not destroyed,
lost or stolen), a new Debenture of such series and of like principal amount
and tenor and bearing a number not contempora neously outstanding, with Coupons
corresponding to the Coupons, if any, appertaining to such destroyed, lost or
stolen Debenture or to the Debenture to which such destroyed, lost or stolen
Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Debenture or
Coupon appertaining thereto has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Debenture, pay
such Debenture or Coupon; provided, however, that principal of and any premium
and interest on Bearer Debentures shall, except as otherwise provided in
Section 10.2, be payable only at an office or agency located outside the United
States.
Upon the issuance of any new Debenture under this Section, the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Debenture of any series, with any Coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Debenture or in exchange for a Debenture to which a destroyed, lost or
stolen Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Debenture and any Coupons appertaining thereto, or the destroyed, lost or
stolen Coupon shall be at any time enforceable by anyone, and any such new
Debenture and Coupons, if any, shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debentures of such
series and Coupons appertaining thereto, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures or
Coupons.
SECTION 3.7 Payment of Interest; Interest Rights Preserved.
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Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, interest on any Registered Debenture which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Debenture (or one or more
Predecessor Debentures) is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, any interest on any Registered Debenture of any
series which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (a) and (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Debentures
of such series (or their respective Predecessor Debentures) 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 Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid
on each Registered Debenture of such series and the date of the
proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the 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 Re cord Date for the
payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the 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 Holder of Registered Debentures of such series
at the address of such Holder as it appears in the Debenture
Register, not less than 10 days prior to such Special Record
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Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names
the Registered Debentures of such series (or their respective
Predecessor Debentures) are registered at the close of business
on such Special Record Date and shall no longer be payable
pursuant to the following Clause (b); and
(b) The Company may make payment of any Defaulted Interest on the
Registered Debentures of any series in any other lawful manner
not inconsistent with the requirements of any securities
exchange on which such Debentures may be listed, and upon such
notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Debenture delivered under this Indenture upon registration of, transfer
of or in exchange for or in lieu of any other Debenture shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
In the case of any Debenture which is converted into Common Stock of
the Company after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Debenture whose Maturity is
prior to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly provided
in the immediately preceding sentence, in the case of any Debenture which is
converted, interest whose Stated Maturity is after the date of conversion of
such Debenture shall not be payable.
SECTION 3.8 Persons Deemed Owners.
Prior to due presentment of a Registered Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Debenture is registered as
the owner of such Registered Debenture for the purpose of receiving payment of
principal of (and pre-
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mium, if any) and (subject to Sections 3.5 and 3.7) any interest on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Debenture and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Debenture and the bearer of
any coupon as the absolute owner of such Debenture or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Debenture or coupon shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9 Cancellation.
All Debentures and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Registered Debentures and matured coupons so
delivered shall be promptly cancelled by the Trustee. All Bearer Debentures and
unmatured coupons so delivered shall be cancelled. All Bearer Debentures and
unmatured coupons held by the Trustee pending such cancellation or reissuance
shall be deemed to be delivered for cancellation for all purposes of this
Indenture and the Debentures. The Company may at any time deliver to the
Trustee for cancellation any Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Debentures previously authenticated hereunder which the
Company has not issued and sold, and all Debentures so delivered shall be
promptly cancelled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debentures and
coupons held by the Trustee shall be returned to the Company.
Notwithstanding the foregoing, with respect to any Book-Entry
Debenture, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Depository or impair, as between a
Depository and holders of
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beneficial interests in any Book-Entry Debenture, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of such Book-Entry Debenture.
SECTION 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Debentures of any series, interest on the Debentures of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 Electronic Debenture Issuance.
The Debentures may, pursuant to a Board Resolution and Officers'
Certificate complying with Section 3.1 hereof, be issued by means of an
electronic issuance system. Any such Debenture issuance instructions may
specify the name, address and taxpayer identification number of the Holder, the
principal amount and Maturity of the Debenture, the interest rate to be borne
by the Debenture and any other terms not inconsistent with such Board
Resolution and Officers' Certificate. Nothing in this Section 3.11 shall be
construed as prohibiting the Company from issuing Debentures by any means not
inconsistent with the provisions of this Indenture.
SECTION 3.12 CUSIP Numbers.
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 3.13 Right of Set Off.
Notwithstanding anything to the contrary in this Indenture, with
respect to Debentures of any series, the Company shall have the right to set
off any payment it is otherwise required to make hereunder to the extent the
Company has theretofore
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made, or is concurrently on the date of such payment making, a payment under
the Trust Securities Guarantees relating to Debentures of such series.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Debentures herein expressly provided for, and any
right to receive additional amounts, as provided in Section 10.4), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either
(1) all Debentures theretofore authenticated and delivered and
all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Debentures surrendered for
exchange for Registered Debentures and maturing after such
exchange, whose surrender is not required or has been waived as
provided in Section 3.5, (ii) Debentures and coupons which have
been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, (iii) coupons appertaining to
Debentures called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 11.6, and (iv) Debentures and coupons for whose payment
money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(2) all such Debentures and, in the case of (i) or (ii) below,
any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation,
(i) have become due and payable, or
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(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose, an amount sufficient to pay and
discharge the entire indebtedness on such Debentures and coupons
not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and any interest to the date of
such deposit (in the case of Debentures which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(2) of this
Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive .
SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 4.1 or 4.3 and all money received by the Trustee in respect of such
U.S. Government Obligations shall be held in trust and applied by it, in
accordance with the provisions of the Debentures, the Coupons and this
Indenture, to the payment, either directly or
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through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and any interest for whose payment such money and U.S.
Government Obligations has been deposited with or received by the Trustee.
Money deposited pursuant to this Section not in violation of this Indenture
shall not be subject to claims of the holders of Senior Indebtedness under
Article XV.
SECTION 4.3 Company's Option to Effect Defeasance or Covenant Defeasance.
If applicable to Debentures of any series, the Company may elect, at
its option at any time, to have Section 4.4 or Section 4.5 applied to any such
series of Debentures or any Debentures of such series, as the case may be,
designated pursuant to Section 3.1 as being defeasible pursuant to such Section
4.4 or 4.5, in accordance with any applicable requirements provided pursuant to
Section 3.1 and upon compliance with the conditions set forth below in this
Article. Any such election shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 3.1 for such Debentures.
SECTION 4.4 Discharge and Defeasance.
If this Section 4.4 is specified, as contemplated by Section 3.1, to
be applicable to Debentures of any series, then notwithstanding Section 4.1 and
upon compliance with the applicable conditions set forth in Section 4.6: (1)
the Company shall be deemed to have paid and discharged the entire indebtedness
on all the Outstanding Debentures of such series ("Defeasance"); and (2) the
provisions of this Indenture as it relates to Outstanding Debentures of such
series shall no longer be in effect (except as to the rights of Holders of
Debentures of such series to receive, solely from the trust fund described in
Section 4.6, payment of (a) the principal of (and premium, if any) and any
installment of principal of (and premium, if any) or interest on Debentures of
such series on the Stated Maturity of such principal (and premium, if any) or
installment of principal (and premium, if any) or interest or upon optional
redemption and/or (b) any mandatory sinking fund payments or analogous payments
applicable to the Debentures of such series on that day on which such payments
are due and payable in accordance with the terms of the Indenture and of
Debentures of such series, the Company's obligations with respect to Debentures
of such series under Sections 3.4, 3.5, 3.6, 10.2, 10.3, and 10.4 and the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including those under Section 6.9 hereof);
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SECTION 4.5 Covenant Defeasance.
If this Section 4.5 is specified, as contemplated by Section 3.1, to
be applicable to any series of Debentures or any Debentures of such series, as
the case may be, (a) the Company shall be released from its obligations under
Sections 10.4 through 10.7, inclusive, and any covenants provided pursuant to
Section 3.1(u) or 9.1(b) for the benefit of the Holders of Debentures of such
series that pursuant to the terms of such Debentures of such series are
defeasible pursuant to this Section 4.5 and (b) the occurrence of any event
specified in Sections 5.1(d) (with respect to any of Sections 10.3 through
10.7, inclusive, and any such covenants provided pursuant to Section 3.1(u),
9.1(b), or 9.1(f) and 5.1(g) (if pursuant to the terms of the Debentures of
such series this Section 4.5 is applicable to any such event specified in
Section 5.1(g)) shall be deemed not to be or result in an Event of Default, in
each case with respect to the Debentures of such series as provided in this
Section on and after the date the conditions set forth in Section 4.6 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to the Debentures of such series,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 5.1(d) and 5.1(g)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Debentures of such series shall be unaffected thereby.
SECTION 4.6 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
4.4 or Section 4.5 to any series of Debentures or any Debentures of such
series, as the case may be.
(a) either
(1) with respect to all Outstanding Debentures of such series or
such Debentures of such Series, as the case may be, with
reference to this Section 4.6, the Company has deposited or
caused to be deposited with the Trustee irrevocably (but subject
to the provisions of Section 4.2 and the last paragraph of
Section 10.3), as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders
of the Debentures of such series, (i) lawful money of the United
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States in an amount, or (ii) U.S. Government Obligations which
through the payment of interest and principal in respect thereof
in accordance with their terms will provide not later than the
opening of business on the due dates of any payment referred to
in clause (i) or (ii) of this subparagraph (a)(1) lawful money of
the United States in an amount, or (iii) 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 and
discharge (A) the principal of (and premium, if any) and each
installment of principal (and premium, if any) and interest on
such Debentures of such series on the Stated Maturity of such
principal or installment of principal or interest or upon
optional redemption and (B) any mandatory sinking fund payments
or analogous payments applicable to the Debentures of such series
on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of the Debentures
of such series; or
(2) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by
Section 3.1, to be applicable to the Debentures of such series;
(b) the Company has paid or caused to be paid all other sums
payable with respect to the Debentures of such series;
(c) such deposit for the benefit of Holders of Debentures of such
series will not result in a breach or violation of, or constitute
a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is
bound;
(d) no Event of Default or event which with the giving of notice
or lapse of time, or both, would become an Event of Default with
respect to the Debentures of such series shall have occurred and
be continuing on the date of such deposit and no Event of Default
under Section 5.1(e) or Section 5.1(f) or event which with the
giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.1(e) or Section 5.1(f) shall have
occurred and be continuing on the 91st day after such date;
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(e) in the event of an election to have Section 4.4 apply to the
Debentures of any series, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in applicable federal income
tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of
Debentures of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to 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;
(f) in the event of an election to have Section 4.5 apply to
Debentures of any series, the Company shall have delivered to the
Trustee an Opinion of Counsel, to the effect that the Holders of
Debentures of such series will not recognize gain or loss for
United States federal income tax purposes as a result of the
deposit and Covenant Defeasance to be effected with respect to
the Debentures of such series and will be subject to United
States federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit and
Covenant Defeasance were not to occur;
(g) if the Debentures of such series are then listed on any
domestic or foreign securities exchange, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that
such deposit, defeasance and discharge will not cause the
Debentures of such series to be delisted;
(h) no default in the payment of the principal of (and premium,
if any) or any interest on any Senior Indebtedness beyond any
applicable grace period shall have occurred and be continuing;
(i) no other default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in
the acceleration of such Senior Indebtedness; and
(j) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein
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provided for relating to the Defeasance or Covenant Defeasance
with respect to such Debentures of such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of such deposit and the related exercise of the Company's
option under this Article, registration is not required under the
Investment Company Act of 1940, as amended, by the Company, the
trust funds representing such deposit or the Trustee or (ii) all
necessary registrations under said Act have been effected.
Any deposits with the Trustee referred to in Section 4.6(a)(1) above
shall be irrevocable and shall be made under the terms of an escrow/trust
agreement in form and substance satisfactory to the Trustee. If any Outstanding
Debentures of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with
any mandatory sinking fund requirement, the applicable escrow trust agreement
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Upon Defeasance with respect to all the Debentures of any series, the
terms and conditions of the Debentures of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be
binding upon, or applicable to, the Company; provided that the Company shall
not be discharged from any payment obligations in respect of Debentures of such
series which are deemed not to be Outstanding under clause (iii) of the
definition thereof if such obligations continue to be valid obligations of the
Company under applicable law.
Notwithstanding the cessation, termination and discharge of all
obligations, cove nants and agreements (except as provided above in this
Section 4.6) of the Company under this Indenture with respect to the Debentures
of any series, the obligations of the Company to the Trustee under Section 6.7,
and the obligations of the Trustee under Section 4.2 and the last paragraph of
Section 10.3 shall survive with respect to the Debentures of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in this Section 4.6
with respect to Debentures of any series which, in the opinion of a nationally
recognized firm of in-
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dependent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to Debentures of such series.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Section 4.6 or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Debentures.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default.
"Event of Default", wherever used herein with respect to Debentures of
any series, unless otherwise provided in the applicable supplemental
indenture, means any one or more of the following events (whatever the reason
for such Event of Default and whether it shall be occasioned by the provisions
of Article XV or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of the principal of (or premium, if
any, on) any Debenture of such series as and when the same shall
become due and payable and continuance of such default for a
period of 30 days 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
(whether or not such payment is prohibited by the subordination
provisions set forth in Article XV hereof); provided, however,
that a valid extension of the maturity of the Debentures of such
series in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of principal
or premium, if any; or
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(b) default in the payment of any interest upon or any additional
amounts payable in respect of any Debenture of such series when
it becomes due and payable, and continuance of such default for a
period of 30 days (whether or not such payment is prohibited by
the subordination provisions set forth in Article XV hereof);
provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in
the payment of interest for this purpose; or
(c) if the Debentures of such series are convertible or
exchangeable into or for shares of Common Stock of the Company or
other securities, cash or other property pursuant to any
supplemental indenture, Board Resolution or other instrument
authorizing Debentures of such series, failure by the Company to
convert such Debentures (whether or not such conversion or
exchange is prohibited by the subordination provisions set forth
in Article XV); or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit
of any series of Debentures other than such series), and
continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Debentures of such series, a written notice
specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default, hereunder;
or
(e) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law
or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee,
trustee,
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sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or ordering the
winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive
days; or
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company to the entry of a decree or order for
relief in respect of itself in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by the Company to the filing
of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or the making
by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay
its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action; or
(g) in the event Debentures of any series are issued to a
CalEnergy Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such CalEnergy Trust, such
CalEnergy Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Debentures of such series to holders of Trust Securities in
liquidation of their interest in such CalEnergy Trust, (ii) the
redemption of all of the outstanding Trust Securities of such
CalEnergy Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such
CalEnergy Trust; or
(h) any other Event of Default provided with respect to
Debentures of such series.
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SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Debentures of such 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 Debentures of such
series then Outstanding hereunder (each such series voting as a separate
class), by notice in writing to the Company (and to the Trustee if given by
the Holders of Debentures of such series), may declare the entire principal
(or, if the Debentures of such series are Original Issue Discount Debentures,
such portion of the principal amount as may be specified in the terms of such
series) of all Debentures of such series and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if any Debentures are Original Issue
Discount Debentures, such portion of the principal as may be specified in the
terms thereof) of the Debentures of any series then Outstanding shall have been
so declared due and payable, and before any judgment or decree for the payment
of such moneys shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of such series and the
principal of (and premium, if any, on) the Debentures of such series which
shall have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Debentures) specified in the Debentures of such series, to the date of
such payment or deposit) and any other amounts payable in respect of all the
Debentures of such series and such amount as shall be sufficient to cover
reasonable compensation to the Trustee, and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and if any
and all Events of Default under the Indenture, other than the non-payment of
the principal of Debentures of such series (or, if any Debentures are Original
Issue Discount Debentures, such portion of the principal as may be specified in
the terms thereof) which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the Holders of a majority in aggregate principal amount of all the
Debentures of
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such series, each series voting as a separate class, then Outstanding, by
written notice to the Company and to the Trustee, may waive all such defaults
with respect to the Debentures of such and rescind and annul such declaration
and its consequence, but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of such 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 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if,
(a) default is made in the payment of any interest on any
Debenture of any series, or any payment required by any sinking
or analogous fund established with respect to Debentures of such
series as and when the same shall have become due and payable and
such default continues for a period of 30 days; provided, that a
valid extension of the interest payment period by the Company
pursuant to this Indenture shall not constitute a default in the
payment of any interest for this purpose, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Debenture of any series when the same
shall have become due and payable, whether upon maturity of the
Debentures of such series or upon redemption or upon declaration
or otherwise,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of Debentures of such series and any Coupons
appertaining thereto, the whole amount then due and payable on Debentures of
such series and Coupons for principal and any premium and interest and, to the
extent that payment of such interest shall be legally enforceable under
applicable law, interest on any overdue principal and on the premium, if any,
and overdue interest, at the rate or rates prescribed therefor in Debentures of
such series; and in addition thereto, such further amount as
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shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon Debentures of such 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 any other obligor upon Debentures of
such series, wherever situated.
If an Event of Default with respect to Debentures of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debentures of such series
and any Coupons appertaining thereto by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such
rights, either at law or in equity or in bankruptcy or otherwise whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Debentures of any series), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders of Debentures of such
series and Coupons appertaining thereto and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder of Debentures of such series and
Coupons appertaining thereto to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders of Debentures of such series and Coupons appertaining thereto, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and ad-
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vances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture of any series or any Coupon appertaining thereto any plan of
reorganization, arrangement, adjustment or composition affecting the
Debentures of such series or Coupons appertaining thereto or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder of Debentures of any series or any Coupon appertaining thereto in
any such proceeding.
SECTION 5.5 Trustee May Enforce Claims Without Possession of Debentures or
Coupons.
All rights of action and claims under this Indenture or under any of
the terms established with respect to the Debentures of any series or Coupons
appertaining thereto may be prosecuted and enforced by the Trustee without the
possession of any of the Debentures of such series or Coupons appertaining
thereto or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel due under
Section 6.7, be for the ratable benefit of the Holders of the Debentures of
such series and Coupons appertaining thereto in respect of which such judgment
has been recovered.
SECTION 5.6 Application of Money Collected.
Subject to Article XV, any money collected by the Trustee pursuant to
this Article with respect to Debentures of any series shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or interest,
upon presentation of the Debentures of such series or any Coupons appertaining
thereto, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7; and
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SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Debentures of
such series and Coupons appertaining thereto 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 Debentures of such series and
Coupons appertaining thereto for principal and any premium and
interest, respectively.
SECTION 5.7 Limitation on Suits.
No Holder of any Debenture of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless;
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Debentures of such series and of the continuance thereof with
respect to the Debentures of such series specifying such Event of
Default, as hereinbefore provided;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Debentures of such series shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Debentures of
such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this
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Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest and Convert.
Notwithstanding any other provision in this Indenture, but subject to
Article XV of this Indenture, the Holder of any Debenture of any series or any
Coupon appertaining thereto shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to (i) any right of the Company to extend interest payment periods as
provided in Section 3.1(h) and (ii) Section 3.7) interest on Debentures of such
series, and any additional amounts contemplated by Section 10.4 in respect of
Debentures of such series or payment of any Coupons appertaining thereto on the
Stated Maturity or Maturities expressed in the Debentures of such series or any
Coupons appertaining thereto (or, in the case of redemption, on the Redemption
Date) and to convert such Debenture in accordance with its terms and to
institute suit for the enforcement of any such payment and right to convert,
and such rights shall not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder of Debentures of any series or any Coupon
appertaining thereto has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders of Debentures of such
series and any Coupons appertaining thereto shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures or Coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to
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the Holders of Debentures or Coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture
or Coupon to exercise any right or remedy accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Subject to the provisions of Section 5.7, every right and remedy given by this
Article or by law to the Trustee or to the Holders of Debentures or Coupons may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Debentures or Coupons, as the case may be.
SECTION 5.12 Control by Holders of Debentures.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debentures of such series, provided that,
(a) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 Waiver of Past Defaults.
Subject to Section 9.2 hereof, the Holders of not less than a majority
in principal amount of the Outstanding Debentures of any series may on behalf
of the Holders of all the Debentures of such series and any Coupons
appertaining thereto waive any
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past default hereunder with respect to the Debentures of such series and its
consequences, except a default
(a) in the payment of the principal of (or premium, if any) or
any interest on any Debenture of such series as and when the
same shall become due by the terms of Debentures of such series
otherwise than by acceleration (unless such default has been
cured and sums sufficient to pay all matured installments of
interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 5.2); or
(b) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of
the Holder of each Outstanding Debenture of such series affected;
provided, however, that if the Debentures of such series are held by a
CalEnergy Trust or a trustee of such trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable CalEnergy Trust shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each Outstanding Debenture of such series is
required, such waiver shall not be effective until each holder of the Trust
Securities of the applicable CalEnergy Trust shall have consented to such
waiver.
Upon any such waiver, the default covered thereby shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture and the Company, the Trustee and the
holders of the Debentures 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 5.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture
or Coupon by such Holder's acceptance thereof shall be deemed to have 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, suffered 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 rea-
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sonable costs, including reasonable attorneys' fees and expenses in the manner
and to the extent provided in the Trust Indenture Act, 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; provided, that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit
instituted by the Company or the Trustee or in any suit for the enforcement of
the right to receive the principal of and interest on any Debenture or to
convert any Debenture in accordance with its terms.
SECTION 5.15 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.16 Enforcement by Holders of Preferred Securities.
Notwithstanding anything to the contrary contained herein, if the
Property Trustee of a CalEnergy Trust, as Holder of Debentures of a series
issued to such CalEnergy Trust, fails to enforce its rights under the Debentures
of such series (other than rights arising from an Event of Default described in
Section 5.16(b)) after any holder of Preferred Securities of such CalEnergy
Trust shall have made a written request to such Property Trustee to enforce
such rights, such holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce such Property Trustee's
rights as Holder of the Debentures of such series, without first instituting
any legal proceeding against such Property trustee or any other Person.
Notwithstanding anything to the contrary contained herein, if an Event
of Default with respect to a series of Debentures has occurred and is
continuing and such Event of Default is attributable to the failure of the
Company to pay interest (subject to the right of the Company, if any, to extend
the interest payment periods in
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respect of the Debentures of such series) or principal on the Debentures of
such series on the date such interest or principal is otherwise payable, the
Company acknowledges that, in such event, a holder of Preferred Securities of
the CalEnergy Trust which is the Holder of Debentures of such series may
institute a Direct Action for enforcement of payment to such holder of the
principal of or interest on the Debentures of such series having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder, on or after the respective due date specified in the Debentures of
such series, without first instituting any legal proceeding against the
Property Trustee of such CalEnergy Trust or any other Person.
Notwithstanding any payment made to such holder of Preferred
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of or interest on the Debentures of such
series held by such CalEnergy Trust or the Property Trustee of such CalEnergy
Trust and the Company shall be subrogated to the rights of the holder of such
Preferred Securities with respect to payments on the Preferred Securities to
the extent of any payments made by the Company to such holder in any Direct
Action.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior
to Default.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.
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SECTION 6.2 Notice of Defaults.
The Trustee shall give the Holders of any series of Debentures issued
hereunder notice of any default hereunder with respect to such series as and to
the extent provided by the Trust Indenture Act; provided, however, that in the
case of any default of the character specified in Section 5.1(d), no such
notice to such Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 6.3 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order or as otherwise expressly provided herein and any
resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Debentures of any
series or any Coupons appertaining thereto pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to reasonable examination of
the books, records and premises of the Company, personally or by
agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without
negligence or willful misconduct, and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
SECTION 6.4 Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures (except the
Trustee's certificates of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of any
Debentures or Coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Debentures or the
proceeds thereof.
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SECTION 6.5 May Hold Debentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Debentures and Coupons and,
subject to Section 6.10 and 6.12, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Debenture Registrar or such other agent.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7 Compensation and Reimbursement..
The Company agrees:
(a) to pay to the Trustee or any predecessor Trustee from time to
time such reasonable compensation as the Company and the Trustee
shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee or any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the
trust or trusts hereunder, includ-
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ing the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Debentures as to all
property and funds held by it hereunder for any amount owing it pursuant to
this Section 6.7, except with respect to funds held in trust for the benefit of
the Holders of the Debentures.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar laws.
The provisions of this Section 6.7 shall survive the termination of
this Indenture.
SECTION 6.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in New York, New York. If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
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SECTION 6.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Debentures
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.11 shall not have been delivered to the Trustee within 30
days after the delivery of such Act of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Debentures of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the
Company or by any Holder of a Debenture who has been a bona fide
Holder of a Debenture for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall
take charge or control of the
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Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by Company Order may remove the Trustee
with respect to all Debentures, or (ii) subject to Section 5.14 any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Debentures and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Debentures of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Debentures of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debentures of one
or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debentures of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debentures of any series shall
be appointed by Act of the Holders of a majority in principal amount of
Outstanding Debentures of such series delivered to the Company and the retiring
Trustee, the suc cessor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 6.11, become the successor Trustee with respect to the Debentures
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Debentures of any
series shall have been so appointed by the Company or the Holders of Debentures
of such series and accepted appointment in the manner required by Section 6.11,
any Holder of a Debenture of such series who has been a bona fide Holder of a
Debenture of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Debentures of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debentures of any series and each
appointment of a successor Trustee with respect to the Debentures of any
series in the manner provided in
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Section 1.6. Each notice shall include the name of the successor Trustee with
respect to the Debentures of such series and the address of its Corporate Trust
Office.
SECTION 6.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Debentures, 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 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 written
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 Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Debentures of
such series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (i) 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 Debentures of
such series to which the appointment of such successor Trustee relates, (ii) if
the retiring Trustee is not retiring with respect to all Debentures, 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 Debentures of such series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (iii)
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 as co-trustees of
the same trust and 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 upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or
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conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of such series to which
the appointment of such successor Trustee relates; but, on the written request
of the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Debentures of such
series to which the appointment of such successor Trustee relates.
(c) Upon the written 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.
SECTION 6.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.13 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 all or substantially all the corporate trust
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debentures 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 Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
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SECTION 6.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to Debentures of one or more series which shall be authorized to act on behalf
of the Trustee to authenticate Debentures of each such series issued upon
original issue or upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.6, and Debentures of such series 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. Wherever reference is made in this Indenture to the authentication
and delivery of Debentures by the Trustee or the Trustee's certificate of
authentication such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company
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and shall promptly give notice of such appointment to all Holders of Debentures
pursuant to Section 1.6. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to Debentures of one or more series is
made pursuant to this Section, the Debentures of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By
--------------------------
Authenticating Agent
By
--------------------------
Authorized Signatory
If all of the Debentures of any series may not be originally issued at
one time, and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable
of authenticating Debentures of such series upon original issuance located in a
Place of Payment where the Company wishes to have Debentures of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 1.2 and need
not be accompanied by an Opinion of Counsel), shall
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appoint in accordance with this Section an Authenticating Agent (which if so
requested by the Company, shall be such Affiliate of the Company) having an
office in a Place of Payment designated by the Company with respect to such
series of Debentures.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of a date not more than
15 days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Debenture Registrar.
SECTION 7.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Debenture Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
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(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Debentures or Coupons, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Debentures made pursuant to the Trust Indenture Act.
SECTION 7.3 Reports by Trustee.
(a) Within 60 days after May 15 of each year, the Trustee shall
transmit by mail to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act in
the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Debentures are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Debentures are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided, that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 business days after the same is so required to
be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereun der (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
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ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Company May Consolidate, Etc. on Certain Terms.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, sell, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by purchase,
conveyance, transfer or lease, all or substantially all of the
properties and assets of the Company on a consolidated basis shall be
a corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Debentures, according to their tenor, and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with Article XIV;
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(c) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
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This Section shall only apply to a merger or consolidation in which
the Company is not the surviving corporation and to conveyances, leases and
transfers by the Company as transferor or lessor.
SECTION 8.2 Successor Corporation Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, of all or substantially all of the properties and assets of the
Company on a consolidated basis in accordance with Section 8.1, and following
such an assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein. Such successor corporation may cause to be signed,
and may issue either in its own name or in the name of the Company prior to
such succession any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
securities which previously shall have been signed and delivered by the
officers of the Company, to the Trustee for authentication, and any Debentures
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Debentures so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debentures theretofore or thereafter issued in accordance with the terms
or this Indenture as though all of such Debentures had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Debentures and may be liquidated and dissolved.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Debentures or Coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Debentures; or
(b) to add to the covenants of the Company for the benefit of the
Holders of Debentures of all or any series (and if such covenants are
to be for the benefit of Debentures of less than all series, 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; or
(c) to add any additional Events of Default (and if such Events
of Default are to be for the benefit of Debentures of less than all
series, stating that such Events of Default are expressly being
included solely for the benefit of such series); or
(d) to add to or change any of the provisions of this Indenture
to provide that Bearer Debentures may be registerable as to principal,
to change or eliminate any restrictions on the payment of principal of
or any premium or interest on Bearer Debentures, to permit Bearer
Debentures to be issued in exchange for Registered Debentures, to
permit Bearer Debentures to be issued in exchange for Bearer
Debentures of other authorized denominations or to permit or
facilitate the issuance of Debentures in uncertificated form,
provided that any such action shall not adversely affect the interests
of the Holders of Debentures of any series or any related Coupons in
any material respect; or
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(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(f) to establish the form or terms of Debentures of any series
and any related coupons as permitted by Sections 2.1 and 3.1; or
(g) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures of
one or more series and to 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,
pursuant to the requirements of Section 6.11(b); or
(h) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIV, including
providing for the conversion of the Debentures into any security or
property (other than the Common Stock of the Company); or
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions
arising under this Indenture, provided that such action shall not
adversely affect the interests of the Holders of Debentures of any
series or any related Coupons or, for so long as any Preferred
Securities shall remain Outstanding, the holders of the Preferred
Securities in any material respect; or
(j) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(k) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Debentures, and all other matters required
pursuant to Section 3.5 or otherwise necessary, desirable or
appropriate in connection with the issu-
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ance of Debentures to holders of Preferred Securities in the
event of a distribution of Debentures by a CalEnergy Trust.
SECTION 9.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures of each series
affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Debentures of such series
and any related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of each Holder of each
Outstanding Debenture of the series affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture of any
series, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or change
any obligation of the Company to pay additional amounts pursuant to
Section 10.6 (except as contemplated by Section 8.1 and permitted by
Section 9.1(a)), or reduce the amount of the principal of an Original
Issue Discount Debenture that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or change the coin or currency in which any Debenture or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding
Debentures of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders
is required for any waiver of certain defaults hereunder and their
consequences provided for in this Indenture, or reduce the
requirements of Section 13.4 for quorum or voting, or
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(c) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 10.2,
or
(d) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Debenture of the
series affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder of a Debenture of
such series or Coupon appertaining thereto with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section or the deletion of this proviso, in accordance with the
requirements of Sections 6.8(b) and 9.1(h), or
(e) make any change that adversely affects the right to convert any
Debenture of any series as provided in Article XIV or pursuant to
Section 3.1 (except as permitted by Section 9.1) or decrease the
conversion rate or increase the conversion price of any such Debenture
of such series, or
(f) if the Debentures of any series are secured, change the terms and
conditions pursuant to which the Debentures of such series are secured
in a manner adverse to the Holders of the secured Debentures of such
series, or
(g) make any change in Article XV that adversely affects the rights of
any Holders of Outstanding Debentures of such series.
If the Debentures of such series are held by a CalEnergy Trust or a trustee of
such trust, such supplemental indenture shall not be effective until the
holders of a majority in liquidation preference of Trust Securities of the
applicable Trust shall have consented to such supplemental indenture;
provided, that if the consent of the Holder of each Outstanding Debenture of
such series is required, such supplemental indenture shall not be effective
until each holder of the Trust Securities of the applicable CalEnergy Trust
shall have consented to such supplemental indenture.
So long as any Preferred Securities are outstanding, no supplemental
indenture shall, without the consent of each holder of Preferred Securities,
amend Section 5.16 so as to eliminate or materially impair the right of such
holders to institute Direct Actions in the circumstances set forth therein.
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A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of Debentures of one or more series, or which modifies the rights
of the Holders of Debentures of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders of Debentures of any
series under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided, that unless such
consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record date,
any such consent previously given shall automatically and without further
action by any Holder be cancelled and of no further effect.
SECTION 9.3 Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debentures theretofore or thereafter authenticated and
delivered hereunder and of any Coupons apper-
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taining thereto shall be bound thereby. No such supplemental indenture shall
directly or indirectly modify the provisions of Article XV in any manner which
might terminate or impair the rights of the Senior Indebtedness pursuant to
such subordination provisions.
SECTION 9.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act of 1939, as amended, in
effect on such date.
SECTION 9.6 Reference in Debentures to Supplemental Indentures.
Debentures of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures of such series.
ARTICLE X
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of Debentures of any
series that it will duly and punctually pay the principal of and any premium
and interest on the Debentures of such series in accordance with the terms of
the Debentures of such series, any Coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to Debentures of such series, any interest due on Bearer Debentures of
such series on or before Maturity shall be payable only upon presentation and
surrender outside the United States of the several Coupons for such interest
installments as are evidenced thereby as they severally mature.
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SECTION 10.2 Maintenance of Office or Agency.
If Debentures of any series are issuable only as Registered
Debentures, the Company will maintain in each Place of Payment for Debentures
of such series an office or agency where Debentures of such series may be
presented or surrendered for payment, where Debentures of such series may be
surrendered for registration of transfer, exchange, or conversion and where
notices and demands to or upon the Company in respect of Debentures of such
series and this Indenture may be served. If Debentures of any series are
issuable as Bearer Debentures, the Company will maintain (a) in The City of New
York, an office or agency where any Registered Debentures of such series may
be presented or surrendered for payment, where any Registered Debentures of
such series may be surrendered for registration of transfer, where Debentures
of such series may be surrendered for conversion or exchange, where notices and
demands to or upon the Company in respect of Debentures of such series and
this Indenture may be served and where Bearer Debentures of such series and
related Coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (b)
subject to any laws or regulations applicable thereto, in a Place of Payment
for such series which is located outside the United States, an office or agency
where Debentures of such series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable
on Debentures of such series pursuant to Section 10.4); provided, however, that
if Debentures of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for Debentures of such
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as Debentures of such series are
listed on such exchange, and (c) subject to any laws or regulations applicable
thereto in a Place of Payment for Debentures of such series located outside the
United States an office or agency where any Registered Debentures of such
series may be surrendered for registration of transfer, where Debentures of
such series may be surrendered for conversion or exchange and where notices
and demands to or upon the Company in respect of the Debentures of such series
and this Indenture may be served. The Company will give prompt notice to the
Trustee and to the Holders as provided in Sections 1.5 and 1.6, respectively,
of the location and any change in the location, of any such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency in respect of Debentures of any series or shall fail to furnish the
Trustee with the address thereof, such presentations and surrenders of
Debentures of
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such series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Debentures of such
series and the related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Debentures of
such series pursuant to Section 10.4) at the office of the Trustee for such
series located outside the United States, and the Company hereby appoints the
same as its agent to receive such respective presentations, surrenders, notices
and demands.
No payment of principal, premium or interest on Bearer Debentures
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States; provided, however, that
if the Debentures of any series are denominated and payable in Dollars, payment
of principal of and any premium and interest on any Bearer Debenture of such
series (including any additional amounts payable on Debentures of such series
pursuant to Section 10.4) shall be made at the office of the Company's Paying
Agent in The City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium, interest or additional amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Debentures of
any series for such purposes. The Company will give prompt written notice to
the Trustee and the Holders of Debentures of such series of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 10.3 Money for Debentures Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to Debentures of any series, it will, on or before each due date of the
principal of and any premium or interest on any of the Debentures of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such
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Persons or otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure to act.
Whenever the Company shall have one or more Paying Agents for
Debentures of any series it will, prior to each due date of the principal of
and any premium or interest on any Debentures of such series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium 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 its action or
failure to act.
The Company will cause each Paying Agent for Debentures of any series
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of
and any premium or interest on Debentures of such series in trust
for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures of such series) in the making
of any payment of principal of and any premium or interest on the
Debentures of such series;
(c) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(d) otherwise comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any 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 trusts as those upon
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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.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and any premium or
interest on any Debenture of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of the Debenture
of such series or any Coupon appertaining thereto shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money and all liability of the Company as trustee thereof shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment, notice
that such money remains unclaimed and that after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.4 Limitation on Dividends; Transactions with Affiliates.
If Debentures of any series are issued to a CalEnergy Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such CalEnergy Trust and (a) there shall have occurred any event that would
constitute an Event of Default, (b) the Guarantor shall be in default with
respect to its payment of any obligations under the Preferred Securities
Guarantee or the Common Securities Guarantee relating to such CalEnergy Trust
or (c) the Company shall have given notice of its election to defer payments of
interest on Debentures of such series by extending the interest payment period
and such period, or any extension thereof, shall be continuing, then (y) 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 (i) purchases or acquisitions of shares of
Common Stock of the Company in connection with the satisfaction by the Company
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of capital stock of the Company, (iii) the pur chase of fractional
interests in shares of the Company's capital stock pursuant to the
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conversion or exchange provisions of such capital stock of the Company or the
security being converted or exchanged, or (iv) payment of stock dividends by
the Company which consist of stock of the same class as that on which the
dividend is being paid) or make any guarantee payments with respect to the
foregoing, other than pursuant to the Preferred Securities Guarantee and the
Common Securities Guarantee), and (z) 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 Debentures of such series.
SECTION 10.5 Covenants as to CalEnergy Trusts.
In the event Debentures of such series are issued to a CalEnergy Trust
or a trustee of such trust in connection with the issuance of Trust Securities
by such CalEnergy Trust, for so long as such Trust Securities remain
outstanding, the Company will (a) maintain 100% direct or indirect ownership of
the Common Securities of such CalEnergy Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its reasonable efforts
to cause such CalEnergy Trust (i) to remain a statutory business trust, except
in connection with a distribution of Debentures of such series to the holders
of Trust Securities in liquidation of such CalEnergy Trust, the redemption of
all of the Trust Securities of such CalEnergy Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of such
CalEnergy Trust, and (ii) to continue to be classified as a grantor trust for
United States federal income tax purposes and (c) to use its reasonable efforts
to cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Debentures of such series.
SECTION 10.6 Additional Amounts.
If the Debentures of any series provide for the payment of additional
amounts, the Company will pay to the Holder of any Debenture of such series or
any Coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of any Debenture
of any series or payment of any related Coupon or the net proceeds received on
the sale or exchange of any Debenture of any series, such mention shall be
deemed to include mention of the payment of additional amounts provided for in
this Section to the extent that, in such context additional amounts are, were
or would be payable in respect thereof pursuant to the provisions of
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this Section and express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made.
If the Debentures of any series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to Debentures of such series (or if the Debentures of such series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Debentures of such
series shall be made to Holders of Debentures of such series or any Coupons
appertaining thereto who are United States Aliens without withholding for or on
account of any tax assessment or other governmental charge described in the
Debentures of such series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Debentures of such series or
any Coupons appertaining thereto and the Company will pay to the Trustee or
such Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or willful misconduct on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.
SECTION 10.7 Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 10.8 Purchase of Debentures by Company or Subsidiary.
If and so long as the Debentures of any series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland and such stock
exchange shall so require, the Company will not, and will not permit any of its
Subsidiaries to, purchase any Debentures of such series by private treaty at a
price (exclusive of expenses and accrued interest) which exceeds 120% of the
mean of the nominal quotations of the Debentures of such series as shown in The
Stock Exchange Daily Official List for the last trading day preceding the date
of purchase.
SECTION 10.9 Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate signed by its principal executive officer, principal financial
officer or principal accounting officer stating whether or not to the best
knowledge of the signer thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company shall file with the Trustee an Officer's Certificate
specifying any default or Event of Default within five Business Days of its
becoming aware of any such default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
SECTION 10.10 Calculation of Original Issue Discount
The Company shall file with the Trustee promptly at the end of each
year a written notice specifying the amount of Original Issue Discount
(including daily rates and accrual periods) accrued on Outstanding Debentures
as of the end of such year.
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ARTICLE XI
REDEMPTION OF DEBENTURES
SECTION 11.1 Applicability of Article.
Debentures of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Debentures of any
series) in accordance with this Article.
SECTION 11.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem Debentures of any series shall
be evidenced by a Company Order. In the case of any redemption, at the
election of the Company, the Company shall, at least 60 days and no more than
90 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Debentures of such series to be
redeemed and provide a copy of the notice of redemption given to Holders of
Debentures to be redeemed pursuant to Section 11.3. In the case of any
redemption of Debentures of such series (a) prior to the expiration of any
restriction on such redemption provided in the terms of Debentures of such
series or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of Debentures of
such series, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 11.3 Selection by Trustee of Debentures to Be Redeemed.
If less than all the Debentures of any series and of like tenor are to
be redeemed (unless such redemption affects only a single Debenture), the
particular Debentures of such series to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Debentures of such series and of like tenor not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection, for redemption of portions (equal to the
minimum authorized denomination for Debentures of such series or any integral
multiple thereof) of the principal amount of Registered Debentures of such
series of a denomination larger than the minimum authorized denomination
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for Debentures of such series. If so specified in the Debentures of any series,
partial redemptions must be in an amount not less than $1,000,000 principal
amount of Debentures.
If Debentures of any series selected for partial redemption are
converted in part before termination of the conversion right with respect to
the portion of the Debentures of such series so selected, the converted
portion of the Debentures of such series shall be deemed (so far as may be) to
be the portion selected for redemption. Debentures (or portions thereof) which
have been converted during a selection of Debentures of such series to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of such
selection. In any case where more than one Debenture of such series is
registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Debenture of such series.
The Trustee shall promptly notify the Company in writing of the
Debentures of such series selected for redemption and, in the case of any
Debentures of such series selected for partial redemption, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Debenture, whether such
Debenture is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Debenture shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Debenture.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures of any series
shall relate, in the case of any Debentures of such series redeemed or to be
redeemed only in part, to the portion of the principal amount of the Debentures
of such series which has been or is to be redeemed.
SECTION 11.4 Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Debentures to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
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All notices of redemption shall identify the Debentures (including the
CUSIP or ISIN number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Debentures of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debentures
of such series to be redeemed, and a statement to the effect
that on or after the Redemption Date upon surrender of such
Debenture a new Debenture of such series in the principal amount
equal to the unredeemed portion will be issued;
(d) that on the Redemption Date the Redemption Price will become
due and payable upon each such Debenture of such series to be
redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date;
(e) the place or places where such Debentures of such series,
together in the case of Bearer Debentures of such series with all
Coupons appertaining thereto, if any maturing after the
Redemption Date, are to be surrendered for payment of the
Redemption Price;
(f) that the redemption is for a sinking fund, if such is the
case; and
(g) if applicable, the conversion rate or price, the date on
which the right to convert the Debentures of such series to be
redeemed will terminate and the place or places where such
Debentures may be surrendered for conversion.
A notice of redemption published as contemplated by Section 1.6 need
not identify particular Registered Debentures of such series to be redeemed.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
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SECTION 11.5 Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Debentures
which are to be redeemed on that date.
If any Debenture called for redemption is converted into Common Stock
of the Company, any money deposited with the Trustee or with any Paying Agent
or so segregated and held in trust for the redemption of such Debenture shall
(subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in the last paragraph of Section 3.7)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.
SECTION 11.6 Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall on the Redemption Date become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Debentures shall cease to bear interest and the Coupons for such
interest appertaining to any Bearer Debentures so to be redeemed except to the
extent provided below, shall be void. Upon surrender of any such Debenture for
redemption in accordance with said notice together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Debenture shall
be paid by the Company at the Redemption Price together with accrued interest
(including Additional Payments, if any) to the Redemption Date; provided,
however, that installments of interest on Bearer Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 10.2) and, unless otherwise specified as contemplated by
Section 3.1, only upon presentation and surrender of Coupons for such interest;
and provided, further, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest on Registered Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Debentures or one or more Predecessor Debentures, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7.
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If any Bearer Debenture surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Debenture may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Debenture shall surrender to the Trustee or any Paying Agent any such missing
Coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by Coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 10.2) and unless otherwise specified as contemplated by
Section 3.1 only upon presentation and surrender of those Coupons.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 11.7 Debentures Redeemed in Part.
Any Registered Debenture of any series which is to be redeemed only in
part shall be surrendered at a Place of Payment therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Debenture without service charge, a new
Registered Debenture or Debentures of such series and of like tenor of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debenture of such series so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.1 Applicability of Article.
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The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debentures of any series except as otherwise specified as
contemplated by Section 3.1 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures 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 Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Debentures of any series as provided for by the
terms of Debentures of such series.
SECTION 12.2 Satisfaction of Sinking Fund Payments with Debentures.
The Company (a) may deliver Outstanding Debentures of any series
(other than any previously called for redemption), together in the case of any
Bearer Debentures of such series with all unmatured Coupons appertaining
thereto, and (b) may apply as a credit Debentures of such series which have
been redeemed either at the election of the Company pursuant to the terms of
the Debentures of such series or through the application of permitted optional
sinking fund payments pursuant to the terms of the Debentures of such series,
in each case in satisfaction of all or any part of any sinking fund payment
with respect to the Debentures of such series required to be made pursuant to
the terms of the Debentures of such series; provided that the Debentures of
such series have not been previously so credited. The Debentures of such series
shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in the Debentures of such series for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.3 Redemption of Debentures for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Debentures of any series, 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 that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Debentures of such series
pursuant to Section 12.2 and will also deliver to the
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Trustee any Debentures of such series to be so delivered. Not less than 45 days
before each such sinking fund payment date the Trustee shall select the
Debentures of such series to be redeemed upon such sinking fund payment date in
the manner specified in Section 11.3 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 11.4. Such notice having been duly given, the redemption
of such Debentures of such series shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES
SECTION 13.1 Purposes for Which Meetings May be Called.
If Debentures of any series are issuable as Bearer Debentures, a
meeting of Holders of Debentures of such series may be called at any time and
from time to time pur suant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Debentures
of such series.
SECTION 13.2 Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Debentures of any series for any purpose specified in Section 13.1, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or in London as the Trustee shall determine. Notice of every meeting of
Holders of Debentures of such setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 1.6, not less than 21 nor
more than 180 days prior to the date fixed for the meeting (or, in the case of
a meeting of Holders with respect to Debentures of any series all or part of
which are represented by a Book-Entry Debenture, not less than 20 nor more than
40 days).
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding
Debentures of any series shall have requested the Trustee to call a meeting of
the Holders of Debentures of such series for any purpose specified in Section
13.1, by written request setting forth
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in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Debentures of such series in the amount above specified, as the
case may be, may determine the time and the place in the Borough of Manhattan,
The City of New York or in London for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of
this Section.
SECTION 13.3 Persons Entitled to Vote at Meetings.
Upon the calling of a meeting of Holders with respect to the
Debentures of any series all or part of which are represented by a Book-Entry
Debenture, a record date shall be established for determining Holders of
Outstanding Debentures of such series entitled to vote at such meeting, which
record date shall be the close of business on the day the notice of the meeting
of Holders is given in accordance with Section 13.2. The Holders on such record
date, and their designated proxies, and only such Persons, shall be entitled to
vote at any meeting of Holders. To be entitled to vote at any meeting of
Holders a Person shall (a) be a Holder of one or more Debentures of such series
or (b) be a Person appointed by an instrument in writing as proxy by a Holder
of one or more Debentures of such series; provided, however, that in the case
of any meeting of Holders with respect to the Debentures of any series all or
part of which are represented by a Book-Entry Debenture, only Holders, or their
designated proxies, of record on the record date established pursuant to
Section 13.3 hereof shall be entitled to vote at such meeting. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 13.4 Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Debentures of any series shall constitute a quorum for a meeting of
Holders of Debentures of such series; provided, however, that if any action is
to be taken at such meet ing with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of Outstanding Debentures of such
series that is less or greater than a majority in principal amount of the
Outstanding Debentures of such series, then, with respect to such
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action (and only such action) the Persons entitled to vote such lesser or
greater percentage in principal amount of the Outstanding Debentures of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Debentures of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 13.2 (a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the outstanding Debentures of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders with
respect to Debentures of any series which is represented in whole or in part by
a Book-Entry Debenture, shall be adjourned to a date more than 90 days after
the record date for such meeting unless the Trustee shall send out a new notice
of meeting and establish, in accordance with Section 13.3, a new record date
for Holders entitled to vote at such meeting.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Debentures of such series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of a specified percentage in aggregate
principal amount of Outstanding Debentures of such series that is less or
greater than a majority in principal amount of the Outstanding Debentures of
such series may be adopted at a meeting or an adjourned meeting duly convened
and at which a quorum is present as aforesaid only by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Debentures of such series.
Any resolution passed or decision taken at any meeting of Holders of
Debentures of any series duly held in accordance with this Section shall be
binding on all the Holders of Debentures of such series and the Coupons
appertaining thereto, whether or not present or represented at the meeting.
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SECTION 13.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Debentures of any series in regard to proof of the
holding of Debentures of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall
deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Debentures of such series shall be proved in the
manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the signature of the
person executing the proxy witnessed or guaranteed by any trust company, bank
or banker authorized by Section 1.4 to certify to the holding of Bearer
Debentures of such series. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Debentures of such series as provided in Section
13.2(b), in which case the Company or the Holders of Debentures of such series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons enti tled to vote a majority in
principal amount of the Outstanding Debentures of such series represented at
the meeting.
(c) At any meeting each Holder of a Debenture of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Debentures of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Debenture challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote, except as a Holder of a Debenture of such series or proxy.
(d) Any meeting of Holders of Debentures of any series duly called
pursuant to Section 13.2 at which a quorum is present may be adjourned from
time to time by
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Persons entitled to vote a majority in principal amount of the Outstanding
Debentures of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
SECTION 13.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Debentures of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debentures of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Debentures of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Debentures of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.2 and, if
applicable, Section 13.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE XIV
CONVERSION OF DEBENTURES
SECTION 14.1 Applicability of Article.
The provisions of this Article shall be applicable to the Debentures
of any series which are convertible into shares of Common Stock of the Company,
and the issuance of such shares of Common Stock upon the conversion of
Debentures of such series, except as otherwise specified as contemplated by
Section 3.1 for the Debentures of
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such series. The terms and provisions applicable to the conversion of
Debentures of any series into securities of the Company (other than Common
Stock) shall, if applicable, be set forth in an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the
issuance of Debentures of such series in accordance with Section 3.1.
SECTION 14.2 Exercise of Conversion Privilege.
In order to exercise a conversion privilege, the Holder of a Debenture
of any series with such a privilege shall surrender such Debenture to the
Company at the office or agency maintained for that purpose pursuant to Section
10.2, accompanied by written notice to the Company that the Holder elects to
convert such Debenture or a specified portion thereof. Such notice shall also
state, if different from the name and address of such Holder, the name or names
(with address) in which the certificate or certificates for shares of Common
Stock which shall be issuable on such conversion shall be issued. Debentures
of such series surrendered for conversion shall (if so required by the Company
or the Trustee) be duly endorsed by or accompanied by instruments of transfer
in forms satisfactory to the Company and the Trustee duly executed by the
registered Holder or its attorney duly authorized in writing; and, if expressly
specified, as contemplated by Section 3.1, to be applicable to any series of
Debentures, Debentures of such series so surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the next succeeding Interest Payment Date (excluding Debentures or
portions thereof called for redemption during such period) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
of such Debenture then being converted, and such interest shall be payable to
such registered Holder notwithstanding the conversion of such Debenture,
subject to the provisions of Section 3.7 relating to the payment of Defaulted
Interest by the Company. As promptly as practicable after the receipt of such
notice and of any payment required pursuant to a Board Resolution and, subject
to Section 3.1, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto setting forth the terms of the Debentures and the surrender of such
Debentures in accordance with such reasonable regulations as the Company may
prescribe, the Company shall issue and shall deliver, at the office or agency
at which such Debenture is surrendered, to such Holder or on its written order,
a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture (or specified portion thereof),
in accordance with the provisions of such Board Resolution, Of-
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ficers' Certificate or supplemental indenture, and cash as provided therein in
respect of any fractional share of such Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice and
such payment, if required, shall have been received in proper order for
conversion by the Company and such Debenture shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Debenture and
shall have instructed the Company to effect the conversion on a particular date
following such surrender and such Holder shall be entitled to convert such
Debenture on such date, in which case such conversion shall be deemed to be
effected immediately prior to the close of business on such date) and at such
time the rights of the Holder of such Debenture as such Debenture Holder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock of the Company shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby. Except as set forth above and subject to the
final paragraph of Section 3.7, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Debentures of such series
surrendered for conversion or on account of any dividends on the Common Stock
of the Company issued upon such conversion.
In the case of any Debenture of any series which is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Debenture or Debentures of such
series, of authorized denominations, in aggregate principal amount equal to
the unconverted portion of such Debenture.
SECTION 14.3 No Fractional Shares.
No fractional share of Common Stock of the Company shall be issued
upon conversions of Debentures of any series. If more than one Debenture of
such series shall be surrendered for conversion at one time by the same Holder,
the number of full shares which shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount of the Debentures of
such series (or specified portions thereof to the extent permitted hereby) so
surrendered. If, except for the provisions of this Section 14.3, any Holder of
a Debenture or Debentures of such series would be entitled to a fractional
share of Common Stock of the Company upon the conversion of such Debenture or
Debentures, or specified portions thereof, the Company shall pay to such Holder
an amount in cash equal to the current market value of such frac-
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tional share computed, (a) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange, on the basis of
the last reported sale price regular way on such exchange on the last trading
day prior to the date of conversion upon which such a sale shall have been
effected, or (b) if such Common Stock is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange, on the basis
of the average of the bid and asked prices of such Common Stock in the
over-the-counter market, on the last trading day prior to the date of
conversion, as reported by the National Quotation Bureau, Incorporated or
similar organization if the National Quotation Bureau, Incorporated is no
longer reporting such information, or if not so available, the fair market
price as determined by the Board of Directors. For purposes of this Section,
"trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
other than any day on which the Common Stock is not traded on the New York
Stock Exchange, or if the Common Stock is not traded on the New York Stock
Exchange, on the principal exchange or market on which the Common Stock is
traded or quoted.
SECTION 14.4 Adjustment of Conversion Price.
The conversion price of Debentures of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassification, combinations or similar transactions in
accordance with the terms of the sup plemental indenture or Board Resolutions
setting forth the terms of the Debentures of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate shall
forthwith be filed at each office or agency maintained for the purpose of
conversion of Debentures of such series pursuant to Section 10.2 and, if
different, with the Trustee. The Company shall forthwith cause a notice setting
forth the adjusted conversion price to be mailed, first class postage prepaid,
to each Holder of Debentures of such series at its address appearing on the
Debenture Register and to any conversion agent other than the Trustee.
SECTION 14.5 Notice of Certain Corporate Actions.
In case:
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(a) Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its
retained earnings (other than a dividend for which approval of
any shareholders of the Company is required); or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
other rights (other than any such grant for which approval of any
shareholders of the Company is required); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding
shares of Common Stock or a change in par value, or from par
value to no par value, or from no par value to par value) or of
any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the
Company is required, or of the sale of all or substantially all
of the assets of the Company or of any compulsory share exchange
whereby the Common Stock is converted into other securities, cash
or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; then the Company shall cause to be
filed with the Trustee, and, if any Preferred Securities are
outstanding, shall cause to be filed with the transfer agent for
the Preferred Securities and shall cause to be mailed to all
Holders at their last addresses as they shall appear in the
Debenture Register, at least 15 days (or 10 days in any case
specified in clause (a) or (b) above) prior to the applicable
record date hereinafter specified, a notice stating (i) the date
on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined,
or (ii) the date on which such reclassification, consolidation,
merger, share exchange, sale, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification,
consolidation,
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merger, share exchange, sale, dissolution, liquidation or winding
up (but no failure to mail such notice or any defect therein or
in the mailing thereof shall affect the validity of such
corporate action required to be specified in such notice). If at
any time the Trustee shall not be the conversion agent, a copy of
such notice shall also forthwith be filed by the Company with the
Trustee.
SECTION 14.6 Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Debentures, the full
number of shares of Com mon Stock of the Company then issuable upon the
conversion of all outstanding Debentures of any series that has conversion
rights.
SECTION 14.7 Payment of Certain Taxes upon Conversion.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Stock on conversion of
Debentures pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Debenture or Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
SECTION 14.8 Nonassessability.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 14.9 Effect of Consolidation or Merger on Conversion Privilege.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, in case of any consolidation of the Company with,
or merger of the Company into or with any other Person, or in case of any sale
of all or substantially all of the assets of the Company, the Company or the
Person formed by such consoli-
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dation or the Person into which the Company shall have been merged or the
Person which shall have acquired such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the Holder
of each Debenture then outstanding of any series that is convertible into
Common Stock shall have the right, which right shall be the exclusive
conversion right thereafter available to said Holder (until the expiration of
the conversion right of such Debenture), to convert such Debenture into the
kind and amount of shares of stock or other securities or property (including
cash) receivable upon such consolidation, merger or sale by a holder of the
number of shares of Common Stock into which such Debenture might have been
converted immediately prior to such consolidation, merger or sale, subject to
compliance with the other provisions of this Indenture, such Debenture and such
supplemental indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in such Debenture. The above provisions of this
Section shall similarly apply to successive consolidations, mergers or sales.
Unless otherwise provided as contemplated by Section 3.1 with respect to
Debentures of any series, it is expressly agreed and understood that anything
in this Indenture to the contrary notwithstanding, if, pursuant to such
merger, consolidation or sale, holders of outstanding shares of Common Stock do
not receive shares of common stock of the surviving corporation but receive
other securities, cash or other property or any combination thereof, Holders of
Debentures shall not have the right to thereafter convert their Debentures into
common stock of the surviving corporation or the corporation which shall have
acquired such assets, but rather, shall have the right upon such conversion to
receive the other securities, cash or other property receivable by a holder of
the number of shares of Common Stock into which the Debentures held by such
Holder might have been converted immediately prior to such consolidation,
merger or sale, all as more fully provided in the first sentence of this
Section 14.9. Anything in this Section 14.9 to the contrary notwithstanding,
the provisions of this Section 14.9 shall not apply to a merger or
consolidation of another corporation with or into the Company pursuant to which
both of the following conditions are applicable: (i) the Company is the
surviving corporation and (ii) the outstanding shares of Common Stock are not
changed or converted into any other securities or property (including cash) or
changed in number or character or reclassified pursuant to the terms of such
merger or consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Debentures may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and
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may accept the certificate or opinion of an independent certified public
accountant with respect thereto; and, in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely thereon, and shall not be
responsible or accountable to any Holder of Debentures for any provision in
conformity therewith or approved by such independent certified accountant which
may be contained in said supplemental indenture.
SECTION 14.10 Duties of Trustee Regarding Conversion.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Debentures of any series that
is convertible into Common Stock to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed, whether herein or in any supplemental indenture (or whether a
supplemental indenture need be entered into), any resolutions of the Board of
Directors or written instrument executed by one or more officers of the Company
provided to be employed in making the same. Neither the Trustee nor any
conversion agent shall be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debentures and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion or
to comply with any of the covenants of the Company contained in this Article
XIV or in the applicable supplemental indenture, resolutions of the Board of
Directors or written instrument executed by one or more duly authorized
officers of the Company. All Debentures delivered for conversion shall be
delivered to the Trustee to be cancelled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 3.9.
SECTION 14.11 Repayment of Certain Funds upon Conversion.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Debentures (including
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funds deposited for the sinking fund referred to in Article III hereof) and
which shall not be required for such purposes because of the conversion of such
Debentures as provided in this Article XIV shall after such conversion be
repaid to the Company by the Trustee upon the Company's written request.
ARTICLE XV
SUBORDINATION OF DEBENTURES
SECTION 15.1 Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Debenture, by
the Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Debenture and the payment of the principal of
(and premium, if any) and interest on each and all of the Debentures are hereby
expressly made subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter incurred. No provision of this Article
shall prevent the occurrence of any default or Event of Default hereunder.
SECTION 15.2 Payment Over of Proceeds Upon Dissolution, Etc.
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 (including
Additional Payments) on the 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 Debentures or the
Trustee would be entitled to receive from the Company, except for the
provisions of this Article, 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 Debentures or by the Trustee
under the Indenture if received by them
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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 the 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 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 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, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, 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 only, 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 which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater
extent than, the Debentures are so subordinated as provided in this Article;
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
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions
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set forth in Article VIII shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer such properties
and assets substantially as an entirety, as the case may be, shall, as a part
of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article VIII.
SECTION 15.3 Prior Payment to Senior Indebtedness Upon Acceleration of
Debentures.
In the event that any Debentures are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness or provision shall be
made for such payment in cash, before the Holders of the Debentures are
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Debentures) by the Company on account of the
principal of (or premium, if any) or interest on the Debentures or on account
of the purchase or other acquisition of Debentures; provided, however, that
nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article XII by delivering and crediting pursuant to
Section 12.2 Debentures which have been acquired (upon redemption or
otherwise) prior to such declaration of acceleration or which have been
converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
SECTION 15.4 No Payment When Senior Indebtedness in Default.
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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, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company, as the case may be, has been accelerated
because of a default, or in the event and during the continuation of any
default under the New Credit Agreement or any refinancing of the New Credit
Agreement in the bank credit market (including institutional participants
therein) that would permit the lenders under the New Credit Agreement or such
refinancing to accelerate the maturity thereof or demand payment in full, then,
in any such 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 Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.4, 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 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 in writing 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 15.5 Payment Permitted in Certain Situations.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Debentures shall prevent (a) the Company, at any time except during
the pendency of any dissolution, winding-up, liquidation or reorganization of
the Company, whether voluntary or involuntary or any bankruptcy, insolvency,
receivership or other proceedings of the Company referred to in Section 15.2 or
under the conditions described in Section 15.3 or 15.4, from making payments
at any time of principal of, or premium, if any, or interest on the Debentures,
or (b) the application by the Trustee of any money deposited with it hereunder
to the payment of or on account of the principal of, or premium, if any, or
interest on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have
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knowledge that such payment would have been prohibited by the provisions of
this Article.
SECTION 15.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders
of Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Debentures
are subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to or
for the benefit of the holders of Senior Indebtedness by Holders of Debentures
or the Trustee, shall, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of Debentures, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
SECTION 15.7 Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defin ing the relative rights of the Holders of Debentures on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Debentures, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of Debentures the principal of (and premium, if any) and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of
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Debentures and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 15.8 Trustee to Effectuate Subordination.
Each Holder of a 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 and appoints the Trustee such Holder's attorney-in-fact for any
and all such purposes.
SECTION 15.9 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of Debentures,
without incurring responsibility to the Holders of Debentures and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of Debentures to the holders of Senior
Indebtedness do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.
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SECTION 15.10 Notice to Trustee.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the making
of any payment to or by the Trustee in respect of any Debentures pursuant to
the provisions of this Article. Notwithstanding the provisions of this Article
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of any Debentures pursuant to the
provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust
Office of the Trustee from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 6.3,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall have not received the notice provided for in
this Section 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 Debentures), 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.
Subject to the provisions of Section 6.3, the Trustee 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 (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of 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, 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 15.11 Reliance on Judicial Order or Certificate of Liquidating Agent.
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Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.3, and
the Holders of Debentures shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Debentures, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and shall not be
liable to any such holders or creditors if it shall in good faith pay over or
distribute to Holders of Debentures or to the Company or to any other Person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 15.13 Rights of Trustee as Holder of Senior Indebtedness, Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 15.14 Article Applicable to Paying Agents.
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In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 14.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 15.15 Certain Conversions Deemed Payment.
For the purposes of this Article only, (a) the issuance and delivery
of junior securities (or cash paid in lieu of fractional shares) upon
conversion of Debentures in accordance with Article XIV, or pursuant to the
terms set forth in an Officers' Certificate or established in one or more
indentures supplemental hereto in accordance with Section 3.1, shall not be
deemed to constitute a payment or distribution on account of the principal of
or premium or interest on Debentures or on account of the purchase or other
acquisition of Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Debenture shall be deemed to constitute
payment on account of the principal of such Debenture. For the purposes of this
Section, the term "junior securities" means (i) shares of any stock of any
class of the Company and (ii) securities of the Company which are subordinated
in right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Debentures are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Debentures is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of Debentures, the right, which is absolute and unconditional, of the
Holder of any Debenture to convert such Debenture in accordance with Article
XIV.
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
CALENERGY COMPANY, INC.
By
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Name:
Title:
THE BANK OF NEW YORK
By
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Name:
Title:
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DECLARATION OF TRUST
CalEnergy Capital Trust VI
Dated as of September 16, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions................................................. 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name........................................................ 4
SECTION 2.2 Office...................................................... 4
SECTION 2.3 Purpose..................................................... 4
SECTION 2.4 Authority................................................... 4
SECTION 2.5 Title to Property of the Trust.............................. 5
SECTION 2.6 Powers of the Trustees...................................... 5
SECTION 2.7 Filing of Certificate of Trust.............................. 6
SECTION 2.8 Duration of Trust........................................... 6
SECTION 2.9 Responsibilities of the Sponsor............................. 6
SECTION 2.10 Declaration Binding on Holders of Securities................ 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.................................................... 7
SECTION 3.2 Delaware Trustee............................................ 8
SECTION 3.3 Execution of Documents...................................... 9
SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration.. 9
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation................................................. 9
SECTION 4.2 Fiduciary Duty.............................................. 10
SECTION 4.3 Indemnification............................................. 11
SECTION 4.4 Outside Businesses.......................................... 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.................................................. 15
SECTION 5.2 Termination of Trust........................................ 15
SECTION 5.3 Governing Law............................................... 15
SECTION 5.4 Headings.................................................... 15
SECTION 5.5 Successors and Assigns...................................... 16
SECTION 5.6 Partial Enforceability...................................... 16
SECTION 5.7 Counterparts................................................ 16
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DECLARATION OF TRUST
OF
CALENERGY CAPITAL TRUST VI
September 16, 1997
DECLARATION OF TRUST ("Declaration") dated and effective as of
September 16, 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;
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Business Trust Act (as defined herein) for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute 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
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified;
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(e) a reference to the singular includes the plural and vice versa;
(f) a reference to any Person shall include its successors and
assigns;
(g) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended and
restated in effect from time to time; and
(h) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person,
any successor, statute, law, rule or regulation.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or in Wilmington, Delaware are authorized or
required by any applicable law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or the Trust's
Affiliates.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Issuer" means the Parent in its capacity as the issuer of
the Debentures under the Indenture.
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"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
4.3(b).
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the indenture to be entered into between the Parent
and the Debenture Trustee and any indenture supplemental thereto pursuant to
which the Debentures are to be issued.
"Indenture Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Parent" means CalEnergy Company, Inc., a Delaware corporation or any
successor entity in a merger.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Property Trustee" has the meaning set forth in Section 3.1.
"Regular Trustee" means any Trustee other than the Delaware Trustee
and Property Trustee.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the Trust.
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"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "CalEnergy Capital
Trust VI." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o CalEnergy
Company, Inc., 302 South 36th Street, Suite 400, Omaha, Nebraska 68131
Attention: General Counsel. On ten Business Days written notice to the holders
of Securities, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In dealing with
the Regular Trustees acting on behalf of the Trust, no person shall be required
to inquire into the authority of the Regular Trustees to bind the Trust.
Persons dealing with the
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Trust are entitled to rely conclusively on the power and authority of the
Regular Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there
shall be no interests in the Trust other than the Securities;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor, to be necessary in order
to qualify or register all or part of the Preferred Securities in any
State or foreign jurisdiction in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing or quotation of the Preferred
Securities;
(iv) execute and deliver letters, documents, or instruments with
the Depository Trust Company relating to the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registra-
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tion of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(vi) execute and enter into an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
(d) to incur expenses that are necessary or incidental to carry out
any of the purposes of this Declaration, which expenses shall be paid for
by the Sponsor in all respects; and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Section
5.2, shall have existence for thirty-five (35) years from the date hereof.
SECTION 2.9 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:
(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 and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions
which must be taken by 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
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necessary or advisable in order to comply with the applicable laws
of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Holders of Securities.
Every Person by virtue of having become a holder of a Security or any
interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Sponsor. The Sponsor is entitled to appoint
or remove without cause any Trustee at any time; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further
that (1) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); and (2) there shall be at least one Regular Trustee who is
an employee or officer of, or is affiliated with, the Sponsor.
Except as expressly set forth in this Declaration, if there are more
than two Regular Trustees, any power of such Regular Trustees may be exercised
by, or with the consent of, a majority of such Regular Trustees; provided that
if there are two Regular Trustees, any power of such Regular Trustees shall be
exercised by both Regular Trustees; provided further that if there is only one
Regular Trustee, all powers of the Regular Trustees shall be exercised by such
one Regular Trustee.
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The initial Regular Trustee(s) shall be:
Steven A. McArthur
Craig Hammett
Douglas L. Anderson
The initial Delaware Trustee shall be:
The Bank of New York, Delaware
Prior to the issuance of the Securities, the Sponsor shall appoint
another trustee (the "Property Trustee") meeting the requirements of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Property Trustee
and the Delaware Trustee.
SECTION 3.2 Delaware Trustee.
Notwithstanding any other provision of this Declaration, the Delaware
Trustee shall not be entitled to exercise any of the powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust or of the Regular Trustees, except such acts as the Delaware Trustee is
expressly obligated or authorized to undertake under this Declaration or the
Business Trust Act and except for the gross negligence or willful misconduct of
the Delaware Trustee.
SECTION 3.3 Execution of Documents.
(a) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is, or if
there are more than two Regular Trustees, any two Regular Trustees are,
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6, provided, that the registration statement referred to in Section
2.6(b)(i), including any amendment thereto, shall be signed by all of the
Regular Trustees; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 2.6.
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SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration 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.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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 negligence or willful
misconduct with respect to such acts or omissions; and
(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 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise
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existing at law or in equity, 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
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 term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(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.
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SECTION 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of
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any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law,
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section
4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the holder of the Common Securities.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 4.3(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
holder of the Common Securities, that, based upon the facts known to the
Regular Trustees, counsel or the holder of the Common Securities at the
time such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal
counsel or holder of the Common Securities reasonably determine that such
person deliberately breached
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his duty to the Trust or the holder of the Common Securities or the
holders of the Preferred Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 4.3(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or holders of Preferred Securities of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
4.3(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 4.3(a) is in effect. Any repeal or modification
of this Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 4.3(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the
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Delaware Trustee (each of the Persons in (i) through (iii) being referred to as
a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 4.3(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by all of the Regular
Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or effect:
14
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(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; or
(v) 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 of Securities in accordance with the terms of
the Securities.
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 ITS PRINCIPLES OF CONFLICT OF LAWS.
SECTION 5.4 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 5.5 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 5.6 Partial Enforceability.
15
<PAGE>
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 5.7 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.
16
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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/ Steven A. McArthur
-----------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
/s/ Craig Hammett
-----------------------------------
Name: Craig Hammett
Title: Regular Trustee
/s/ Douglas L. Anderson
-----------------------------------
Name: Douglas L. Anderson
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By: /s/ Walter N. Gitlin
--------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
CALENERGY COMPANY, INC.,
as Sponsor
By: /s/ Steven A. McArthur
--------------------------------
Name: Steven A. McArthur
Title: Senior Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of CalEnergy Capital Trust VI, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
ss. 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "CalEnergy Capital Trust VI".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
The Bank of New York, Delaware
23 White Clay Center Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September __, 1997
----------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
----------------------------------
Name: Craig Hammett
Title: Regular Trustee
----------------------------------
Name: Gregory Abel
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By:
--------------------------------
Name:
Title:
<PAGE>
CERTIFICATE OF TRUST
The undersigned, the trustees of CalEnergy Capital Trust VI, desiring
to form a business trust pursuant to Delaware Business Trust Act,
12 Del. C. ss. 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "CalEnergy Capital Trust VI".
2. The name and business address of the trustee of the Trust which
has its principal place of busi- ness in the State of Delaware is
as follows:
The Bank of New York, Delaware
23 White Clay Center
Route 273
Newark, Delaware 19711
3. This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 16, 1997
/s/ Steven A. McArthur
----------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
/s/ Craig Hammett
----------------------------------
Name: Craig Hammett
Title: Regular Trustee
/s/ Douglas L. Anderson
----------------------------------
Name: Douglas L. Anderson
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By: /s/ Walter N. Gitlin
-------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
<PAGE>
================================
DECLARATION OF TRUST
CalEnergy Capital Trust IV
Dated as of August 4, 1997
================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................. 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name......................................................... 4
SECTION 2.2 Office....................................................... 4
SECTION 2.3 Purpose...................................................... 4
SECTION 2.4 Authority.................................................... 4
SECTION 2.5 Title to Property of the Trust............................... 5
SECTION 2.6 Powers of the Trustees....................................... 5
SECTION 2.7 Filing of Certificate of Trust............................... 6
SECTION 2.8 Duration of Trust............................................ 6
SECTION 2.9 Responsibilities of the Sponsor.............................. 6
SECTION 2.10 Declaration Binding on Holders of Securities................. 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees..................................................... 7
SECTION 3.2 Delaware Trustee............................................. 8
SECTION 3.3 Execution of Documents....................................... 9
SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration... 9
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.................................................. 9
SECTION 4.2 Fiduciary Duty............................................... 10
SECTION 4.3 Indemnification.............................................. 11
SECTION 4.4 Outside Businesses........................................... 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments................................................... 15
SECTION 5.2 Termination of Trust......................................... 15
SECTION 5.3 Governing Law................................................ 15
SECTION 5.4 Headings..................................................... 15
SECTION 5.5 Successors and Assigns....................................... 16
SECTION 5.6 Partial Enforceability....................................... 16
SECTION 5.7 Counterparts................................................. 16
i
<PAGE>
DECLARATION OF TRUST
OF
CALENERGY CAPITAL TRUST IV
August 4, 1997
DECLARATION OF TRUST ("Declaration") dated and effective as of August
4, 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;
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Business Trust Act (as defined herein) for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute 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
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified;
<PAGE>
(e) a reference to the singular includes the plural and vice versa;
(f) a reference to any Person shall include its successors and
assigns;
(g) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended and
restated in effect from time to time; and
(h) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person,
any successor, statute, law, rule or regulation.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or in Wilmington, Delaware are authorized or
required by any applicable law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or the Trust's
Affiliates.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Issuer" means the Parent in its capacity as the issuer of
the Debentures under the Indenture.
2
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
4.3(b).
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the indenture to be entered into between the Parent
and the Debenture Trustee and any indenture supplemental thereto pursuant to
which the Debentures are to be issued.
"Indenture Trustee" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Parent" means CalEnergy Company, Inc., a Delaware corporation or any
successor entity in a merger.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Property Trustee" has the meaning set forth in Section 3.1.
"Regular Trustee" means any Trustee other than the Delaware Trustee
and Property Trustee.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the Trust.
3
<PAGE>
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "CalEnergy Capital
Trust IV." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o CalEnergy
Company, Inc., 302 South 36th Street, Suite 400, Omaha, Nebraska 68131
Attention: General Counsel. On ten Business Days written notice to the holders
of Securities, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In dealing with
the Regular Trustees acting on behalf of the Trust, no person shall be required
to inquire into the authority of the Regular Trustees to bind the Trust.
Persons dealing with the
4
<PAGE>
Trust are entitled to rely conclusively on the power and authority of the
Regular Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there
shall be no interests in the Trust other than the Securities;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor, to be necessary in order
to qualify or register all or part of the Preferred Securities in any
State or foreign jurisdiction in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing or quotation of the Preferred
Securities;
(iv) execute and deliver letters, documents, or instruments with
the Depository Trust Company relating to the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registra-
5
<PAGE>
tion of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(vi) execute and enter into an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
(d) to incur expenses that are necessary or incidental to carry out
any of the purposes of this Declaration, which expenses shall be paid for
by the Sponsor in all respects; and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Section
5.2, shall have existence for thirty-five (35) years from the date hereof.
SECTION 2.9 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:
(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 and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions
which must be taken by 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
6
<PAGE>
necessary or advisable in order to comply with the applicable laws
of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Holders of Securities.
Every Person by virtue of having become a holder of a Security or any
interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Sponsor. The Sponsor is entitled to appoint
or remove without cause any Trustee at any time; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further
that (1) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); and (2) there shall be at least one Regular Trustee who is
an employee or officer of, or is affiliated with, the Sponsor.
Except as expressly set forth in this Declaration, if there are more
than two Regular Trustees, any power of such Regular Trustees may be exercised
by, or with the consent of, a majority of such Regular Trustees; provided that
if there are two Regular Trustees, any power of such Regular Trustees shall be
exercised by both Regular Trustees; provided further that if there is only one
Regular Trustee, all powers of the Regular Trustees shall be exercised by such
one Regular Trustee.
7
<PAGE>
The initial Regular Trustee(s) shall be:
Steven A. McArthur
Craig Hammett
Gregory Abel
The initial Delaware Trustee shall be:
The Bank of New York, Delaware
Prior to the issuance of the Securities, the Sponsor shall appoint
another trustee (the "Property Trustee") meeting the requirements of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Property Trustee
and the Delaware Trustee.
SECTION 3.2 Delaware Trustee.
Notwithstanding any other provision of this Declaration, the Delaware
Trustee shall not be entitled to exercise any of the powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust or of the Regular Trustees, except such acts as the Delaware Trustee is
expressly obligated or authorized to undertake under this Declaration or the
Business Trust Act and except for the gross negligence or willful misconduct of
the Delaware Trustee.
SECTION 3.3 Execution of Documents.
(a) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is, or if
there are more than two Regular Trustees, any two Regular Trustees are,
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6, provided, that the registration statement referred to in Section
2.6(b)(i), including any amendment thereto, shall be signed by all of the
Regular Trustees; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 2.6.
8
<PAGE>
SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration 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.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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 negligence or willful
misconduct with respect to such acts or omissions; and
(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 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise
9
<PAGE>
existing at law or in equity, 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
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 term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(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.
10
<PAGE>
SECTION 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of
11
<PAGE>
any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law,
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section
4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the holder of the Common Securities.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 4.3(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
holder of the Common Securities, that, based upon the facts known to the
Regular Trustees, counsel or the holder of the Common Securities at the
time such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal
counsel or holder of the Common Securities reasonably determine that such
person deliberately breached
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his duty to the Trust or the holder of the Common Securities or the
holders of the Preferred Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 4.3(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or holders of Preferred Securities of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
4.3(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 4.3(a) is in effect. Any repeal or modification
of this Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 4.3(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the
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Delaware Trustee (each of the Persons in (i) through (iii) being referred to as
a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 4.3(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by all of the Regular
Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or effect:
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(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; or
(v) 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 of Securities in accordance with the terms of
the Securities.
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 ITS PRINCIPLES OF CONFLICT OF LAWS.
SECTION 5.4 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 5.5 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 5.6 Partial Enforceability.
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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 5.7 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/ Steven H. McArthur
----------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
/s/ Craig Hammett
----------------------------------
Name: Craig Hammett
Title: Regular Trustee
/s/ Gregory Abel
----------------------------------
Name: Gregory Abel
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By: /s/ Walter N. Gitlin
-------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
CALENERGY COMPANY, INC.,
as Sponsor
By: /s/ Steven A. McArthur
-------------------------------
Name: Steven A. McArthur
Title: Senior Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of CalEnergy Capital Trust IV, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
ss. 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "CalEnergy Capital Trust IV".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
The Bank of New York, Delaware
23 White Clay Center
Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: August 4, 1997
----------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
----------------------------------
Name: Craig Hammett
Title: Regular Trustee
----------------------------------
Name: Gregory Abel
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By:
-------------------------------
Name:
Title:
<PAGE>
================================
DECLARATION OF TRUST
CalEnergy Capital Trust V
Dated as of August 4, 1997
================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................. 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name......................................................... 4
SECTION 2.2 Office....................................................... 4
SECTION 2.3 Purpose...................................................... 4
SECTION 2.4 Authority.................................................... 4
SECTION 2.5 Title to Property of the Trust............................... 5
SECTION 2.6 Powers of the Trustees....................................... 5
SECTION 2.7 Filing of Certificate of Trust............................... 6
SECTION 2.8 Duration of Trust............................................ 6
SECTION 2.9 Responsibilities of the Sponsor.............................. 6
SECTION 2.10 Declaration Binding on Holders of Securities................. 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees..................................................... 7
SECTION 3.2 Delaware Trustee............................................. 8
SECTION 3.3 Execution of Documents....................................... 9
SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration... 9
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.................................................. 9
SECTION 4.2 Fiduciary Duty............................................... 10
SECTION 4.3 Indemnification.............................................. 11
SECTION 4.4 Outside Businesses........................................... 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments................................................... 15
SECTION 5.2 Termination of Trust......................................... 15
SECTION 5.3 Governing Law................................................ 15
SECTION 5.4 Headings..................................................... 15
SECTION 5.5 Successors and Assigns....................................... 16
i
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SECTION 5.6 Partial Enforceability....................................... 16
SECTION 5.7 Counterparts................................................. 16
ii
<PAGE>
DECLARATION OF TRUST
OF
CALENERGY CAPITAL TRUST V
August 4, 1997
DECLARATION OF TRUST ("Declaration") dated and effective as of August
4, 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;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Business Trust Act (as defined herein) for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute 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
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or amended
from time to time;
<PAGE>
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified;
(e) a reference to the singular includes the plural and vice versa;
(f) a reference to any Person shall include its successors and
assigns;
(g) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended and
restated in effect from time to time; and
(h) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person,
any successor, statute, law, rule or regulation.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or in Wilmington, Delaware are authorized or
required by any applicable law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or the Trust's
Affiliates.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
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"Debenture Issuer" means the Parent in its capacity as the issuer of
the Debentures under the Indenture.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
4.3(b).
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the indenture to be entered into between the Parent
and the Debenture Trustee and any indenture supplemental thereto pursuant to
which the Debentures are to be issued.
"Indenture Trustee" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Parent" means CalEnergy Company, Inc., a Delaware corporation or any
successor entity in a merger.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Property Trustee" has the meaning set forth in Section 3.1.
"Regular Trustee" means any Trustee other than the Delaware Trustee
and Property Trustee.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
3
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"Sponsor" means the Parent in its capacity as sponsor of the Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "CalEnergy Capital
Trust V." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o CalEnergy
Company, Inc., 302 South 36th Street, Suite 400, Omaha, Nebraska 68131
Attention: General Counsel. On ten Business Days written notice to the holders
of Securities, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In
4
<PAGE>
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there
shall be no interests in the Trust other than the Securities;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor, to be necessary in order
to qualify or register all or part of the Preferred Securities in any
State or foreign jurisdiction in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing or quotation of the Preferred
Securities;
(iv) execute and deliver letters, documents, or instruments with
the Depository Trust Company relating to the Preferred Securities;
5
<PAGE>
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registration of the Preferred Securities under Section 12(b) of
the Exchange Act; and
(vi) execute and enter into an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
(d) to incur expenses that are necessary or incidental to carry out
any of the purposes of this Declaration, which expenses shall be paid for
by the Sponsor in all respects; and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Section
5.2, shall have existence for thirty-five (35) years from the date hereof.
SECTION 2.9 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:
(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 and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do
6
<PAGE>
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 and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and pricing
agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Holders of Securities.
Every Person by virtue of having become a holder of a
Security or any interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Sponsor. The Sponsor is entitled to appoint
or remove without cause any Trustee at any time; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further
that (1) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); and (2) there shall be at least one Regular Trustee who is
an employee or officer of, or is affiliated with, the Sponsor.
Except as expressly set forth in this Declaration, if there are more
than two Regular Trustees, any power of such Regular Trustees may be exercised
by, or with the consent of, a majority of such Regular Trustees; provided that
if there are two
7
<PAGE>
Regular Trustees, any power of such Regular Trustees shall be exercised by both
Regular Trustees; provided further that if there is only one Regular Trustee,
all powers of the Regular Trustees shall be exercised by such one Regular
Trustee.
The initial Regular Trustee(s) shall be:
Steven A. McArthur
Craig Hammett
Gregory Abel
The initial Delaware Trustee shall be:
The Bank of New York, Delaware
Prior to the issuance of the Securities, the Sponsor shall appoint
another trustee (the "Property Trustee") meeting the requirements of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Property Trustee
and the Delaware Trustee.
SECTION 3.2 Delaware Trustee.
Notwithstanding any other provision of this Declaration, the Delaware
Trustee shall not be entitled to exercise any of the powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust or of the Regular Trustees, except such acts as the Delaware Trustee is
expressly obligated or authorized to undertake under this Declaration or the
Business Trust Act and except for the gross negligence or willful misconduct of
the Delaware Trustee.
SECTION 3.3 Execution of Documents.
(a) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is, or if
there are more than two Regular Trustees, any two Regular Trustees are,
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6, provided, that the registration statement referred to in Section
2.6(b)(i), including any amendment thereto, shall be signed by all of the
Regular Trustees; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural
8
<PAGE>
person over the age of 21 his or her power for the purposes of signing any
documents which the Regular Trustees have power and authority to cause the
Trust to execute pursuant to Section 2.6.
SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration 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.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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 negligence or willful
misconduct with respect to such acts or omissions; and
(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 4.2 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
9
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Person, an Indemnified Person acting under this Declaration shall not be liable
to the Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, 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
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 term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(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.
10
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SECTION 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement
11
<PAGE>
of an action without admission of liability) in defense of any action,
suit or proceeding referred to in paragraphs (i) and (ii) of this Section
4.3(a), or in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section
4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the holder of the Common Securities.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 4.3(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
holder of the Common Securities, that, based upon the facts known to the
Regular Trustees, counsel or the holder of the Common Securities at the
time such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal
counsel or holder of the Common Securities reasonably determine that such
person deliberately breached
12
<PAGE>
his duty to the Trust or the holder of the Common Securities or the
holders of the Preferred Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 4.3(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or holders of Preferred Securities of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
4.3(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 4.3(a) is in effect. Any repeal or modification
of this Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 4.3(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the
13
<PAGE>
Delaware Trustee (each of the Persons in (i) through (iii) being referred to as
a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 4.3(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by all of the Regular
Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
14
<PAGE>
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; or
(v) 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 of Securities in accordance with the terms of
the Securities.
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 ITS PRINCIPLES OF CONFLICT OF LAWS.
SECTION 5.4 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 5.5 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 5.6 Partial Enforceability.
15
<PAGE>
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 5.7 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.
16
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ Steven A. McArthur
---------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
/s/ Craig Hammett
---------------------------------
Name: Craig Hammett
Title: Regular Trustee
/s/ Gregory Abel
---------------------------------
Name: Gregory Abel
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By: /s/ Walter N. Gitlin
------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
CALENERGY COMPANY, INC.,
as Sponsor
By: /s/ Steven A. McArthur
------------------------------
Name: Steven A. McArthur
Title: Senior Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of CalEnergy Capital Trust V, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
ss. 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "CalEnergy Capital Trust V".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
The Bank of New York, Delaware
23 White Clay Center
Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: August 4, 1997
---------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
---------------------------------
Name: Craig Hammett
Title: Regular Trustee
---------------------------------
Name: Gregory Abel
Title: Regular Trustee
THE BANK OF NEW YORK, DELAWARE, as
Delaware Trustee
By:
------------------------------
Name:
Title:
<PAGE>
=======================================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
CALENERGY CAPITAL TRUST ___
Dated as of ________ __, 1997
=======================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions............................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.......................... 10
SECTION 2.2 Lists of Holders of Securities............................ 10
SECTION 2.3 Reports by the Property Trustee........................... 11
SECTION 2.4 Periodic Reports to Property Trustee...................... 11
SECTION 2.5 Evidence of Compliance with Conditions Precedent.......... 12
SECTION 2.6 Events of Default; Waiver................................. 12
SECTION 2.7 Event of Default; Notice.................................. 14
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...................................................... 15
SECTION 3.2 Office.................................................... 15
SECTION 3.3 Purpose................................................... 15
SECTION 3.4 Authority................................................. 16
SECTION 3.5 Title to Property of the Trust............................ 16
SECTION 3.6 Powers and Duties of the Regular Trustees................. 17
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...... 20
SECTION 3.8 Powers and Duties of the Property Trustee................. 21
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee................................................... 25
SECTION 3.10 Certain Rights of Property Trustee....................... 27
SECTION 3.11 Delaware Trustee......................................... 30
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities... 30
SECTION 3.13 Duration of Trust........................................ 30
SECTION 3.14 Mergers.................................................. 31
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities................... 33
SECTION 4.2 Responsibilities of the Sponsor........................... 33
ARTICLE V
TRUSTEES
<PAGE>
Page
SECTION 5.1 Number of Trustees........................................ 34
SECTION 5.2 Delaware Trustee.......................................... 34
SECTION 5.3 Property Trustee; Eligibility............................. 35
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally................................................. 36
SECTION 5.5 Initial Trustees.......................................... 36
SECTION 5.6 Appointment, Removal and Resignation of Trustees.......... 37
SECTION 5.7 Vacancies among Trustees.................................. 39
SECTION 5.8 Effect of Vacancies....................................... 39
SECTION 5.9 Meetings.................................................. 39
SECTION 5.10 Delegation of Power...................................... 40
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business................................................. 41
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................. 41
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities................... 41
SECTION 7.2 Execution and Authentication.............................. 42
SECTION 7.3 Form and Dating........................................... 43
SECTION 7.4 Registrar, Paying Agent and Conversion Agent.............. 44
.............................................................. 45
SECTION 7.6 Replacement Securities.................................... 45
SECTION 7.7 Outstanding Preferred Securities.......................... 46
SECTION 7.8 Preferred Securities...................................... 46
SECTION 7.9 Temporary Securities...................................... 46
SECTION 7.10 Cancellation............................................. 47
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust...................... 47
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 General................................................... 49
SECTION 9.2 Transfer of Securities.................................... 50
SECTION 9.3 Deemed Security Holders................................... 52
SECTION 9.4 Book Entry Interests...................................... 53
SECTION 9.5 Notices to Clearing Agency................................ 53
SECTION 9.6 Appointment of Successor Clearing Agency.................. 54
SECTION 9.7 Definitive Preferred Security Certificates................ 54
<PAGE>
Page
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................ 55
SECTION 10.2 Exculpation.............................................. 55
SECTION 10.3 Fiduciary Duty........................................... 56
SECTION 10.4 Indemnification.......................................... 57
SECTION 10.5 Outside Businesses....................................... 61
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.............................................. 62
SECTION 11.2 Certain Accounting Matters............................... 62
SECTION 11.3 Banking.................................................. 63
SECTION 11.4 Withholding.............................................. 63
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................... 64
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent.......................................... 67
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee....... 69
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................. 71
SECTION 14.2 Governing Law............................................ 72
SECTION 14.3 Intention of the Parties................................. 73
SECTION 14.4 Headings................................................. 73
SECTION 14.5 Successors and Assigns................................... 73
SECTION 14.6 Partial Enforceability................................... 73
SECTION 14.7 Counterparts............................................. 74
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)..................................................... 5.3(a)
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(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(a)
316(a)..................................................... Annex I
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.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALENERGY CAPITAL TRUST ___
________ __, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ________ __, 1997, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), CalEnergy
Company, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the Trust
issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established CalEnergy Capital
Trust ___ (the "Trust"), a trust under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated as of ________ __, 1997 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on ________ __, 1997, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures (as defined herein) of the Debenture Issuer (as defined
herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided
<PAGE>
beneficial interests in the assets of the Trust issued hereunder, subject to
the provisions of this Declaration.
2
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" means if the Trust is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority,
such amounts as shall be required so that the net amounts received and retained
by the Trust after paying such taxes, duties, assessments and governmental
charges will not be less than the amounts the Trust would have received had no
such taxes, duties, assessments or governmental charges been imposed.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
3
<PAGE>
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person provided, however that the Authorized Officer signing an
Officer's Certificate given pursuant to section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"Book Entry Interest" means a beneficial interest in a Global
Preferred Security, ownership and transfers of which shall be maintained and
made through book entries by a Depositary as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in the City of New York or in Wilmington, Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means ________ __, 1997.
"Code" means the Internal Revenue Code of 1986 as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning set forth in Section 7.1(a).
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
4
<PAGE>
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Conversion Agent" has the meaning set forth in Section 7.4.
"Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Securities" means any Preferred Securities in
definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Depositary" means The Depository Trust Company, the initial Clearing
Agency or any Clearing Agency appointed as successor to The Depository Trust
Company pursuant to Section 9.4.
"Direct Action" has the meaning set forth in Section 3.8(c).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
5
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Preferred Security" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture, dated as of ________ __, 1997,
between the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in the terms of
the Securities as set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
6
<PAGE>
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken upon which the statements or opinions
contained in such Certificate are based;
(c) a statement that, in such officer's opinion, such officer has
made or caused to be made such examination or investigation as is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Participants" means members of, or participants in, the Depositary.
"Paying Agent" has the meaning set forth in Section 7.4.
7
<PAGE>
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Securities" has the meaning set forth in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement dated
as of ________ __, 1997, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant
or as an indirect participant, in each case in accordance with the rules of
such Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Registration Statement" has the meaning set forth in Section 3.6(b).
"Registrar" has the meaning set forth in Section 7.4.
"Regular Trustee" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or
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indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"Securities Custodian" means the custodian with respect to the Global
Preferred Security and any other Preferred Security in global form.
"Sponsor" means CalEnergy Company, Inc., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(c).
"Successor Entity" has the meaning set forth in Section 3.14(b)(i).
"Successor Property Trustee" has the meaning set forth in Section
5.6(b).
"Successor Securities" has the meaning set forth in Section
3.14(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"Tax Event" means that the Debenture Issuer shall have obtained an
opinion of nationally recognized independent tax counsel (reasonably acceptable
to the Regular Trustees) experienced in such matters to the effect that, 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 such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after __________,
1997), which amendment or change is effective, is enacted or which
interpretation or pronouncement is announced on or after __________, 1997
(collectively, a "Change In Tax Law"), there is more than an insubstantial risk
that (i) the Trust is or will be subject to United States federal income tax
with respect to interest received on the Debentures, (ii) interest payable to
the Trust on the Debentures is not or will not be deductible for United States
federal income tax purposes or (iii) the Trust is or will be subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges of whatever nature imposed by the United States, or any
other taxing authority. Notwithstanding anything in the previous sentence to
the contrary, a Tax Event shall not include any Change in Tax Law that requires
the Debenture Issuer for United States federal income tax purposes to defer
taking a deduction for any original issue discount ("OID") that accrues with
respect to the Debentures until the interest payment related to such OID is
paid by the Debenture Issuer in money; provided, that such Change in Tax Law
does not create more than an insubstantial risk that the Debenture Issuer will
be prevented from taking a deduction for OID accruing with respect to the
Debentures at a date that is no later than the date the interest payment
related to such OID is actually paid by the Debenture Issuer in money.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
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"Trust" means CalEnergy Capital Trust ___, a trust created under the
Business Trust Act.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" shall have the meaning set forth in Section
7.3.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration, which are
incorporated by reference in and made part of this Declaration and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
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(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request from the
Property Trustee for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing ______ __, ____,
the Property Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by ss. 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss. 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the requirements of ss. 313(d) of the
Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by ss. 314 of the Trust Indenture Act (if any) and the compliance
certificate required by ss. 314 of the Trust Indenture Act in the form, in the
manner and at the times required by ss. 314 of the Trust Indenture Act.
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority")
to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Preferred Securities that
the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of
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the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf
of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of
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the Trust Indenture Act are hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be
an Event of Default as defined in the Indenture, not including any periods of
grace provided for therein and irrespective of the giving of any notice
provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in
the payment of any sinking fund installment established for the Debentures, the
Property Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
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(i) a default under Sections 501(1) and 501(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "CalEnergy Capital Trust ___," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o CalEnergy
Company, Inc., 302 South 36th Street, Suite 400, Omaha, Nebraska 68131,
Attention: Chief Financial Officer, with a copy to: General Counsel. On 10
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
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SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may
be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of the Regular Trustees; and
(d) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
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Holders shall not have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there shall
be no interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date and any other date
Preferred Securities and Common Securities are sold pursuant to the
over-allotment option granted in the Underwriting Agreement;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration statement
filed on Form S-3 (the "Registration Statement") prepared by the
Sponsor, including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any
State or foreign jurisdiction in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market for listing or quotation of
the Preferred Securities;
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(iv) to execute and deliver letters, documents, or instruments
with the Depositary relating to the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registration of the Preferred Securities under Section 12(b) of
the Exchange Act; and
(vi) execute and enter into the Underwriting Agreement and other
related agreements providing for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss.316(c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"),
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unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power
to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under
the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or
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desirable in carrying out the activities of the Trust as set out in this
Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided that such action does not materially adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust
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shall not and the Trustees (including the Property Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I
hereto, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless, in the case of each action described in Clause (A), (B), (C)
or (D), the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property
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Trustee in trust for the benefit of the Holders of the Securities. The right,
title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures
have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds
made in respect of the Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and make payments
to the Holders of the Preferred Securities and Holders of the Common
Securities from the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Property Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned to the Preferred
Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(ii) engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as so directed as shall be necessary or
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appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which a Responsible Officer of
the Property Trustee has actual knowledge or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act; provided,
however, that if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Sponsor to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder
of Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Securities having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Securities. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of Preferred Securities to the extent of any payment made by the
Sponsor to such Holder of Preferred Securities in such Direct Action. In
addition, if the Property Trustee fails to enforce its rights under the
Securities (other than rights arising from an Event of Default described in the
immediately preceding sentence) after any Holder of Preferred Securities shall
have made a written request to the Property Trustee to enforce such rights,
such Holder of Preferred Securities may, to the fullest extent permitted by
law, institute a Direct Action to enforce the Property Trustee's rights as
holder of the Debentures, without first instituting any legal proceeding
against the Property Trustee or any other Person. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
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(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the Property Trustee shall, for the
benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities. In no event, however, shall the Property Trustee, in its capacity
as holder of the Debentures, have the power to convert the Debentures.
(h) The Property Trustee will act as Paying Agent and Registrar in New
York to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may
be removed by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
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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 no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) of which a Responsible
Officer of the Property Trustee has actual knowledge, the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent
individual would exercise or use under the circumstances in the conduct of his
or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable except
for the performance of such duties and 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
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required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Declaration or
indemnity reasonably satisfactory to the Property Trustee against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of
the Debentures or the
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payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in
writing with the Sponsor. Money held by the Property Trustee need not
be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant
to Section 3.8(c)(i) and except to the extent otherwise required by
law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the Property
Trustee be liable for any default or misconduct of the Regular
Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officer's Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officer's Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
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(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice
or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Property Trustee
shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee adequate security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the Property Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Property Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion,
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may make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration;
and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it
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to be authorized or within the discretion or rights or powers
conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.13 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall exist until _____________ __, ____.
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SECTION 3.14 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity or body, except
as described in Section 3.14(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State of the United States; provided,
that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities with respect
to Distributions, assets and payments upon liquidation,
redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor
Securities) to be downgraded
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by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Preferred Securities (including any Successor
Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee; and
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust reasonably acceptable to
the Property Trustee experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement
will not adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to
any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will be treated
as a grantor trust for United States federal income tax purposes.
(c) Notwithstanding Section 3.14(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Common Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other
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entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date and on any other date Preferred Securities are
sold pursuant to the over-allotment option granted in the Underwriting
Agreement, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities, as applicable:
(a) to prepare for filing by the Trust with the Commission the
Registration Statement, including any amendments thereto;
(b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions that must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities;
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(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and other
related agreements providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders
of the Common Securities;
provided, however, that the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, the Delaware Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware; (2) there shall be at least one
Regular Trustee who is an employee or officer of, or is affiliated with the
Sponsor; and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
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(a) a natural person who is resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-5 and to the extent Rule
3a-5 requires a trustee having certain qualifications to hold title to
the "eligible assets" of the trust, the Property Trustee shall possess
those qualifications.
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(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be set forth in Section 5.5
hereof.
SECTION 5.4 Qualifications of Regular Trustees and 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 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Steven A. McArthur
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Craig Hammett
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
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Gregory Abel
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
Corporate Trust Trustee Administration
Floor 21 West
New York, New York 10286
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a successor Property Trustee possessing
the qualifications to act as Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.6(a) until
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a successor Trustee possessing the qualifications to act as Delaware Trustee
under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(d) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities.
(ii) No such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the
Sponsor and the resigning Delaware Trustee.
(e) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
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(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation or removal, the Property Trustee or Delaware Trustee resigning
or being removed, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to
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time upon the call of any Regular Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile or
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action of
such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
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SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such Person shall
be otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture), and Additional Interest),
premium and/or principal on the Debentures held by the Property Trustee (the
amount of any such payment being a "Payment Amount"), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
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(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities, representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), having such
terms (the "Terms") as are set forth in Annex I and one class of convertible
common securities, representing undivided beneficial interests in the assets of
the Trust (the "Common Securities"), having such terms as are set forth in
Annex I. The Trust shall issue no securities or other interests in the assets
of the Trust other than the Preferred Securities and the Common Securities. The
Trust shall issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable.
(d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
a Regular Trustee. In case any Regular Trustee of the Trust who shall have
signed any of the Securities shall cease to be such Regular Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Regular Trustee; and any Securities may be signed on
behalf of the Trust by such persons who, at the actual date of execution of
such Security, shall be the Regular Trustees of the Trust, although at the date
of the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature
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shall, in the case of Common Securities, be a manual signature.
A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Preferred Securities for original issue
by executing the Property Trustee's certificate of authentication contained in
the Preferred Securities. The aggregate number of Preferred Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex I hereto except as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Securities may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as evidenced
by their execution thereof. The Securities may have letters, numbers, notations
or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the
Trust is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction
of the Sponsor shall furnish any such legend not contained in Exhibit A-1 to
the Property Trustee in writing. Each Preferred Security shall be dated the
date of its authenti-
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cation. The terms and provisions of the Securities set forth in Annex I and the
forms of Securities set forth in Exhibits A-1 and A-2 are part of the terms of
this Declaration and to the extent applicable, the Property Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree
to such terms and provisions and to be bound thereby.
The Preferred Securities are being offered and sold by the Trust
pursuant to an Underwriting Agreement relating to the Preferred Securities,
dated ________ __, 1997, among the Trust, the Sponsor and the underwriters
named therein (the "Underwriting Agreement").
SECTION 7.4 Registrar, Paying Agent and Conversion Agent.
The Trust shall maintain in the Borough of Manhattan, City of New
York, State of New York, (i) an office or agency where Preferred Securities may
be presented for registration of transfer or for exchange ("Registrar"), (ii)
an office or agency where Preferred Securities may be presented for payment
("Paying Agent") and an office or agency where Securities may be presented for
conversion ("Conversion Agent"). The Registrar shall keep a register of the
Preferred Securities and of their transfer and exchange. The Trust may appoint
the Registrar, the Paying Agent and the Conversion Agent and may appoint one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents in such other locations as it shall determine. The
term "Paying Agent" includes any additional paying agent and the term
"Conversion Agent" includes any additional conversion agent. The Trust may
change any Paying Agent, Registrar, co-registrar or Conversion Agent without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Regular Trustees. The Trust
shall notify the Property Trustee of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Property Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar, or Conversion Agent. The Trust shall act as Paying Agent, Registrar,
co-registrar, and Conversion Agent for the Common Securities.
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The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of principal or distribution on the Securities, and will notify
the Property Trustee if there are insufficient funds. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the
Trust) shall have no further liability for the money. If the Trust or the
Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If the holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property Trustee
or the Trust, an indemnity bond must be sufficient in the judgment of both to
protect the Trustees, the Property Trustee, the Sponsor or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Sponsor may charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by
the Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
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Every replacement Security is an additional obligation of the Trust.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be
fully protected in relying on any such direction, waiver or consent, only
Securities which the Property Trustee knows are so owned shall be so
disregarded.
SECTION 7.9 Temporary Securities.
(a) Until definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Preferred Securities, the Property Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and deliver to the Property Trustee
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Preferred Securities in certificated form (other than in the case of Preferred
Securities in global form) and thereupon any or all temporary Preferred
Securities (other than any such Preferred Securities in global form) may be
surrendered in exchange therefor, at the office of the Registrar, and the
Property Trustee shall authenticate and deliver an equal aggregate liquidation
amount of definitive Preferred Securities in certificated form in exchange for
temporary Preferred Securities (other than any such Preferred Securities in
global form). Such exchange shall be made by the Trust at its own expense and
without any charge therefor. Until so exchanged, temporary Securities shall in
all respects be entitled to the same benefits and subject to the same
limitations under this Declaration as Securities in definitive certificated
form authenticated (in the case of Preferred Securities) and delivered
hereunder.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent
shall forward to the Property Trustee any Preferred Securities surrendered to
them for registration of transfer, redemption, conversion, exchange or payment.
The Property Trustee shall promptly cancel all Preferred Securities,
surrendered for registration of transfer, redemption, conversion, exchange,
payment, replacement or cancellation and shall dispose of cancelled Preferred
Securities as the Trust directs. The Trust may not issue new Preferred
Securities to replace Preferred Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any holder has
converted.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, upon the consent of at least a
Majority in
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liquidation amount of the Securities, voting together as a single
class, to file a certificate of cancellation with respect to the
Trust, or the revocation of the charter of the Sponsor and the
expiration of 90 days after the date of revocation without a
reinstatement thereof, except, in each case, to the extent permitted
by Article Eight of the Indenture;
(iii) following the distribution of Debentures having a principal
amount equal to the liquidation amount of the Securities to the
Holders, provided that, the Property Trustee has received written
notice from the Holder of all of the Outstanding Common Securities
directing the Property Trustee to terminate the Trust (which direction
is optional, and except as otherwise expressly provided below, within
the discretion of such Holder) and provided, further, that such
direction and such distribution is conditioned on the Sponsors'
receipt of an opinion of counsel to the effect that such distribution
will not be a taxable event to the Holders of Preferred Securities;
(iv) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(v) 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;
(vi) upon the occurrence and continuation of an Investment
Company Event pursuant to which the Sponsor causes the Regular
Trustees to dissolve the Trust in accordance with the terms of the
Securities;
(vii) upon the distribution of the common stock of the Sponsor to
Holders of all outstanding Securities upon conversion of all such
Securities;
(viii) the expiration of the term of the Trust on ________ __,
____; or
(ix) before the issuance of any Securities, with the consent of
all the Regular Trustees and the Sponsor.
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(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), and upon the completion of the winding up of the
Trust, one of the Trustees (each of whom is hereby authorized to take such
action) shall file a certificate of cancellation with the Secretary of State of
the State of Delaware thereby terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 General.
(a) When Preferred Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers and
exchanges, the Trust shall issue and the Property Trustee shall authenticate
Preferred Securities at the Registrar's request.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(d) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
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(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Securities.
(a) The Regular Trustees shall provide for the registration of
Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Securities, the Regular Trustees shall cause one or more new Securities to be
issued in the name of the designated transferee or transferees. Every Security
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Security surrendered for registration of transfer shall be canceled in
accordance with Section 7.10. A transferee of a Security shall be entitled to
the rights and subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Security. By acceptance of a Security, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
(c) Obligations with respect to Transfers and Exchanges of Preferred
Securities.
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Property Trustee shall authenticate definitive
Preferred
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Securities and Global Preferred Securities at the Registrar's or
co-Registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the
Trust or the Sponsor may require) in respect of any tax or other
governmental charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any definitive Preferred
Security selected for redemption in whole or in part pursuant to
Article III, except the unredeemed portion of any definitive Preferred
Security being redeemed in part, or (b) any Preferred Security for a
period beginning 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Preferred Securities or 15 Business Days
before a quarterly distribution date.
(iv) Prior to the due presentation for registrations of transfer
of any Preferred Security, the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person
in whose name a Preferred Security is registered as the absolute owner
of such Preferred Security for the purpose of receiving Distributions
on such Preferred Security and for all other purposes whatsoever, and
none of the Trust, the Property Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this
Declaration as the Preferred Securities surrendered upon such transfer
or exchange.
(d) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, any
Participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of
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any Participant thereof, with respect to any ownership interest
in the Preferred Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Preferred Securities
shall be given or made only to or upon the order of the registered
Holders (which shall be the Depositary or its nominee in the case of a
Global Preferred Security). The rights of beneficial owners in any
Global Preferred Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the
Depositary or any agent thereof with respect to its Participants and
any beneficial owners.
(ii) The Property Trustee and Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under
applicable law with respect to any transfer of any interest in any
Preferred Security (including any transfers between or among
Depositary Participants or beneficial owners in any Global Preferred
Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to
do so if and when expressly required by, the terms of this
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Security represented by such Certificate for purposes of
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
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Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities, on original issuance, will be issued in the form of
one or more, fully registered, global Preferred Security certificates (each a
"Global Preferred Security"), to be delivered to the Depositary, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Preferred
Securities shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of the Depositary, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests
in such Global Preferred Securities, except as provided in Section 9.7. Unless
and until definitive, fully registered Preferred Securities Certificates have
been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this Declaration (including the payment of
Distributions on the Global Preferred Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Preferred Securities and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such Preferred Security Beneficial Owners and the
Depositary and/or the Participants and receive and transmit payments of
Distributions on the Global Cer-
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tificates to such Participants. The Depositary will make book entry transfers
among the Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Regular Trustees shall, in the
case of any Global Preferred Security, give all such notices and communications
specified herein to be given to the Preferred Security Holders to the
Depositary, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If the Depository elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to
the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Securities by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Preferred Security
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Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the Clearing Agency.
The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Preferred Securities may
be listed, or to conform to usage.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not
be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable as principal
obligor, jointly and severally with the Trust, for all of the debts and
obligations of the Trust (other than with respect to the Securities).
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability
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extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust
Indenture Act), are agreed
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by the parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
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SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
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adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding.
Notwithstanding the foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly made (i) by the
Regular Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common Security Holder of
the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful.
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(v) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall require the consent of the
Regular Trustees and not affect any rights or obligations then existing.
(vi) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has
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ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability
or expense including taxes (other than taxes based on the income of such
Fiduciary Indemnified Person) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the satisfaction
and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent
ventures or the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not be
deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, 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.
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Any Covered Person, the Delaware Trustee and the Property Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, books of account, records and
supporting documents, which shall reflect in reasonable detail, each material
transaction of the Trust. The books of account shall be maintained in
accordance with generally accepted accounting principles consistently applied.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a
balance sheet of the Trust as of the end of such Fiscal Year, and the related
statements of income or loss, which shall be examined by and reported upon as
of the end of each Fiscal Year by a firm of independent certified public
accountants selected by the Regular Trustees.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is 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 30 days after the end of each Fiscal Year
of the Trust.
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(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to
each Holder, and any representations and forms as shall reasonably be requested
by the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to the Holder. In the
event of any claimed overwithholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officer's Certificate from each
of the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
(A) an Officer's Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of 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
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terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
which is required to be registered under the Investment Company
Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(d) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
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SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms
of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of
at least a Majority in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Regular Trustees one or more
calls in a writing stating that the signing Holders of Securities wish to call
a meeting and indicating the general or specific purpose for which the meeting
is to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by the Certificates so
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange or
over the counter market on which the Preferred Securities are listed
or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Secu-
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rities having a right to vote thereon were present and voting, but in
no event less than a Majority in liquidation amount of the outstanding
Securities. Prompt notice of the taking of action without a meeting
shall be given to the Holders of Securities entitled to vote who have
not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Security Holders for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the
Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Preferred Securities are then listed or
trading provide otherwise, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration and at
the Closing Date, and each Successor Property Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
State of New York, with trust power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) At the Closing Date, the Property Trustee will be the record
holder of the Debentures and the Property Trustee has not knowingly created any
liens or encumbrances on such Debentures.
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(e) No consent, approval or authorization of, or registration with or
notice to, any New York State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration and at
the Closing Date, and each Successor Delaware Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration.
(b) The execution, delivery and performance by the Delaware Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this
Declaration.
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(e) The Delaware Trustee is a natural person who is a resident of the
State of Delaware, or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: General Counsel
(b) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Securities):
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Department
(c) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Holders of the Securities):
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The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: General Counsel
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to the principles of conflict of laws of the State of Delaware or any
other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration any
provision of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate, in a manner inconsistent with the terms
hereof (i) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the
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necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding or investing trust assets, or (vii) the establishment of
fiduciary or other standards of responsibility or limitations on the acts or
powers of trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees as set forth or referenced in this
Declaration. Section 3540 of Title 12 of the Delaware Code shall not apply to
the Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention
of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or cir-
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cumstances other than those to which it is held invalid, shall not be affected
thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-----------------------------------
Steven A. McArthur
as Trustee
-----------------------------------
Craig Hammett
as Trustee
-----------------------------------
Gregory Abel
as Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
--------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
--------------------------------
Name:
Title:
CALENERGY COMPANY, INC.
as Sponsor
By:
--------------------------------
Name:
Title:
<PAGE>
ANNEX I
TERMS OF SECURITIES
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
<PAGE>
Certificate Number of Preferred
Number:___ Securities:_________
CUSIP No.: ____________
Convertible Preferred Securities
of
CalEnergy Capital Trust [ ]
__% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
CalEnergy Capital Trust [ ], a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that CEDE &
CO. (the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6 1/2% Convertible Preferred Securities (liquidation preference
$50 per Convertible Preferred Security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. 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 __________, 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 Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Preferred Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Trust at its principal place
of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
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By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __th
day of _________, 1997.
CALENERGY CAPITAL TRUST [ ]
By:
--------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ___________,1997
THE BANK OF NEW YORK,
as Property Trustee
By:
--------------------------------
Authorized Signatory
<PAGE>
REVERSE OF SECURITY
Distributions payable on each Preferred Security will be fixed at a
rate per annum of ___% (the "Coupon Rate") of the stated liquidation preference
of $50 per Preferred Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor.
The amount of Distributions payable for any period will be computed for any
full quarterly Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full quarterly Distribution
period for which Distributions are computed, Distributions will be computed on
the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from ____________, 1997 or from the
most recent distribution date to which interest has been paid or duly provided
for and will be payable quarterly in arrears, on March 1, June 1, September 1
and December 1 of each year, commencing on __________, 1997, to Holders of
record fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for successive periods not exceeding 20 consecutive quarters (each
an "Extension Period") during which Extension Periods no interest shall be due
and payable on the Debentures; provided, that no Extension Period shall extend
beyond the date of maturity of the Debentures, as then in effect, or any
earlier redemption date. As a consequence of such extension, Distributions will
also be deferred. Despite such extension, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during the Extension Periods. Prior to the
termination of any Extension Period, the Debenture Issuer may elect to continue
to defer payments of interest for another consecutive Extension Period;
provided, that any such continued Extension Period, together with all such
previous and consecutive Extension Periods, may not exceed 20 consecutive
quarters. 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,
4
<PAGE>
the Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common
Stock of CalEnergy Company, Inc., through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock of CalEnergy Company, Inc., in the manner and
according to the terms set forth in the Declaration.
5
<PAGE>
CONVERSION REQUEST
To: THE BANK OF NEW YORK,
as Property Trustee of
CalEnergy Capital Trust VI
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion
below designated, into Common Stock of CALENERGY COMPANY, INC. (the "CalEnergy
Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of ____________, 1997, by
Steven A. McArthur, Craig Hammett and Gregory Abel as Regular Trustees, The
Bank of New York (Delaware), as Delaware Trustee, The Bank of New York, as
Property Trustee, CalEnergy Company, Inc., as Sponsor, and by the Holders, from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into CalEnergy Common Stock (at the conversion rate specified in
the terms of the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
6
<PAGE>
Dated: ______________
in whole __ in part __
Number of Preferred Securities to
be converted: ___________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of CalEnergy
Common Stock are to be issued,
along with the address or addresses
of such person or persons
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
-----------------------------------
-----------------------------------
-----------------------------------
Signature Guarantee:*
--------------
- --------------
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
7
<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.
Dated:
----------------------------
Signature:
------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
---------------------------------------------------------
- --------------
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
8
<PAGE>
SCHEDULE A
The original number of Preferred Securities represented by this Global
Preferred Security shall be _________. The following increases or decreases in
the number of Preferred Securities represented by this Global Preferred
Security have been made:
<TABLE>
<CAPTION>
Date of Amount of Number of Securities Signature of
increase/ Amount of increase in decrease in number following such authorized
decrease number of Securities of Securities increase/decrease officer of Trustee
- -------- -------------------- ------------- ----------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
A-1
<PAGE>
Certificate Number: Number of Common Securities:
------- --------
Convertible Common Securities
of
CalEnergy Capital Trust ____
__% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
CalEnergy Capital Trust ___, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
CALENERGY COMPANY, INC. (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the __% Convertible Common Securities
(liquidation amount $50 per Convertible 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 _____________, 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 Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits
of the Common Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Reference is hereby made to select provisions of the Common Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
<PAGE>
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __th
day of ______, 1997.
CalEnergy Capital Trust ___
By:
------------------------------
Name: Steven A. McArthur
Title: Regular Trustee
<PAGE>
REVERSE OF SECURITY
Distributions payable on each Common Security will be fixed at a rate
per annum of ___% (the "Coupon Rate") of the stated liquidation amount of $50
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor.
The amount of Distributions payable for any period will be computed for any
full quarterly Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full quarterly Distribution
period for which Distributions are computed, Distributions will be computed on
the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from __________, 1997 or from the
most recent distribution date to which interest has been paid or duly provided
for and will be payable quarterly in arrears, on March 1, June 1, September 1
and December 1 of each year, commencing on __________, 1997, to Holders of
record fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for successive periods not exceeding 20 consecutive quarters (each
an "Extension Period") during which Extension Periods no interest shall be due
and payable on the Debentures; provided, that no Extension Period shall last
beyond the date of maturity of the Debentures, as then in effect, or any
earlier redemption date. As a consequence of such extension, Distributions will
also be deferred. Despite such extension, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during the Extension Periods. Prior to the
termination of any Extension Period,
4
<PAGE>
the Debenture Issuer may elect to continue to defer payments of interest for
another consecutive Extension Period; provided, that any such continued
Extension Period, together with all such previous and consecutive Extension
Periods, may not exceed 20 consecutive quarters. 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.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of Common Stock
of CalEnergy Company, Inc., through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock of CalEnergy Company, Inc., in the manner and according to
the terms set forth in the Declaration.
5
<PAGE>
CONVERSION REQUEST
To: THE BANK OF NEW YORK
CalEnergy Capital Trust ___
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of CALENERGY COMPANY, INC. (the "CalEnergy Common
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ____________, 1997, by ________________,
______________ and _______________, as Regular Trustees, The Bank of New York
(Delaware), as Delaware Trustee, The Bank of New York, as Property Trustee,
CalEnergy Company, Inc., as Sponsor, and by the Holders, from time to time, of
individual beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent
(as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into
CalEnergy Common Stock (at the conversion rate specified in the terms of the
Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
6
<PAGE>
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Common Securities, agrees to be bound
by the terms of the Registration Rights Agreement relating to the CalEnergy
Common Stock issuable upon conversion of the Common Securities.
Dated: ________________
in whole __ in part __
Number of Common Securities to be
converted:
-----------------------------------
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of CalEnergy
Common Stock are to be issued,
along with the address or addresses
of such person or persons
-----------------------------------
-----------------------------------
-----------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other
Identifying Number
-----------------------------------
-----------------------------------
-----------------------------------
Signature Guarantee:*
--------------
- --------------
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
7
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------------
Signature:
------------------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guarantee**:
---------------------------------------------------------
- --------------
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
8
<PAGE>
CALENERGY COMPANY, INC.
__% Convertible Junior Subordinated
Debenture Due ____
No._________ $
CUSIP No.
CALENERGY COMPANY, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called "the Company", which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to THE BANK OF NEW
YORK, AS PROPERTY TRUSTEE OF CALENERGY CAPITAL TRUST ___, or registered
assigns, the principal sum of __________________________ Dollars ($_________)
on ______ 1, ____, provided that the Company may shorten the maturity of the
principal of this Security to a date not earlier than _________, ____, as
described on the reverse hereof.
Interest Payment Dates: _____ 1, _____ 1,_____ 1 and
_____ 1, commencing ______ 1,
Regular Record Dates: the close of business on the
15th day immediately preceding
each Interest Payment Date,
commencing ______ __, ____
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officer.
Dated:
------------------------
CALENERGY COMPANY, INC.
By:
------------------------------
Name:
Title:
<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
------------------------
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
<PAGE>
REVERSE OF SECURITY
CALENERGY COMPANY, INC.
___% Convertible Junior Subordinated
Debenture Due ____1
1. Interest. CalEnergy Company, Inc., a Delaware corporation (the
"Company"), is the issuer of this ___% Convertible Junior Subordinated
Debenture Due ____ (the "Security") limited in aggregate principal amount to
$________, issued under the Indenture hereinafter referred to. The Company
promises to pay interest on the Securities in cash from ______ __, ____ or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral for up to 20 consecutive quarters
as described in Section 3 hereof) in arrears on _____ 1, _____ 1,_____ 1 and
_____ 1 of each year (each such date, an "Interest Payment Date"), commencing
______ __, ____, at the rate of ___% per annum (subject to increase as provided
in Section 13 hereto) plus Additional Interest, if any, until the principal
hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. To the extent lawful, the
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without regard
to any applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Interest as set forth in this Security.
2. Additional Interest. The Company shall pay to CalEnergy Capital
Trust ___ (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount
of dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any additional taxes,
- --------------
1 All terms used in this Security which are defined in the Indenture or in
the Declaration attached as Annex A thereto shall have the meanings
assigned to them in the Indenture or the Declaration, as the case may be.
4
<PAGE>
duties and other governmental charges of whatever nature (other than
withholding stamp or transfer taxes) imposed by the United States or any other
taxing authority.
3. Extension of Interest Payment Period. The Company shall have the
right, at any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such Security
for up to 20 consecutive quarters (an "Extended Interest Payment Period")
during which Extended Interest Payment Period no interest shall be due and
payable; provided, that no Extended Interest Payment Period may extend beyond
the Maturity Date, as then in effect, or any earlier Redemption Date. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period, will bear
interest thereon at ___% compounded quarterly 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 then accrued and
unpaid on the Securities, including any Additional Payments that shall be
payable to the Holders of the Securities in whose names the Securities are
registered in the Security Registrar on the first Regular Record Date after the
end of the Extended Interest Payment Period. Before the expiration of any
Extended Interest Payment Period, the Company may elect to continue to defer
payments of interest for another consecutive Extended Interest Payment Period;
provided, that any such Extended Interest Payment Period, together with all
such previous and consecutive Extended Interest Payment Periods, shall not
exceed 20 consecutive quarters and shall not extend beyond the Maturity Date,
as then in effect. Upon the expiration of any Extended Interest Payment Period
and upon the payment of all Additional Payments, if any, then due, the Company
may commence 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.
If the Property Trustee is the sole holder of the Securities at the
time the Company selects an Extended Interest Payment Period, the Company shall
give notice to the Regular Trustees, the Property Trustee and the Trustee of
its selection of such Extended Interest Payment Period at least one Business
Day prior to the earlier of (i) the next succeeding Interest Payment Date or
(ii) if the Preferred Securities are listed on the New York Stock Exchange or
other stock exchange or quotation system, the date the Trust is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities on the record date or
the date
5
<PAGE>
such distributions are payable, but in any event not less than ten Business
Days prior to such record date.
If the Property Trustee is not the sole holder of the Securities at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of these Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date or (ii)
if the Preferred Securities are listed on the New York Stock Exchange or other
stock exchange or quotation system, the date the Company is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Securities on the record date or the date
such distributions are payable, but in any event not less than two Business
Days prior to such record date.
The quarter in respect of which any notice is given pursuant to the
second and third paragraphs of this Section 3 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under the first paragraph of this Section 3.
4. Method of Payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) 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 15th day immediately preceding each Interest Payment Date (the "Regular
Record Date"), commencing ______ __, ____. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in New York,
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and
6
<PAGE>
private debts; provided, however, that, at the option of the Company, payment
of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
5. Paying Agent and Security Registrar. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such
capacity.
6. Indenture. The Company issued the Securities under an indenture,
dated as of ______ __, ____ (the "Indenture"), between the Company and The Bank
of New York, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb)
("TIA") as in effect on the date of the Indenture. The Securities are subject
to, and qualified by, all such terms, certain of which are summarized hereon,
and holders are referred to the Indenture and the TIA for a statement of such
terms. The Securities are unsecured general obligations of the Company limited
to $_________ in aggregate principal amount (or up to $_________ if the
over-allotment option is exercised) and subordinated in right of payment to all
existing and future Senior Indebtedness of the Company. No reference herein to
the Indenture and no provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture.
7. Optional Redemption. The Securities are redeemable at the Company's
option at any time and from time to time after ______ __, ____, upon not less
than 20 or more than 60 days' notice, at a Redemption Price equal to $___ per
$__ principal amount of the Securities to be redeemed plus any accrued and
unpaid interest, including Additional Payments, if any, to the $___ per $__
principal amount of the Security, if redeemed during the 12-month period begin
ning ______ __, ____ and thereafter at $___ per $__ principal amount of the
Securities plus, in each case, accrued and
7
<PAGE>
unpaid interest, including Additional Payments, if any, to the Redemption Date.
On or after the Redemption Date, interest will cease to accrue on the
Securities, or portion thereof, called for redemption.
8. Conditional Right to Shorten Maturity; Optional Redemption Upon Tax
Event. If a Tax Event shall occur and be continuing and in the opinion of
counsel to the Company experienced in such matters, there would in all cases,
after effecting the termination of the Trust and the distribution of the
Securities to the holders of the Preferred Securities in exchange therefor, be
more than an insubstantial risk that an Adverse Tax Consequence would continue
to exist, then the Company shall have the right:
(a) to shorten the Stated Maturity of the Securities to the minimum
extent required, but in any event to a date not earlier than ______ __, ____
(the action referred to in this clause (a) being referred to herein as a
"Maturity Advancement"), such that, in the opinion of counsel to the Company
experienced in such matters, after advancing the Stated Maturity, interest paid
on the Securities will be deductible for federal income tax purposes; provided,
however, that there shall be delivered to the trustees of the Trust an opinion
of counsel (which counsel shall be satisfactory to the trustees of the Trust)
that such change in the Stated Maturity will not (i) cause the Trust to fail to
be classified as a grantor trust or (ii) result in a taxable event to the
holders of the Preferred Securities, or
(b) if in the opinion of counsel to the Company experienced in such
matters, there would in all cases, after effecting a Maturity Advancement, be
more than an insubstantial risk that an Adverse Tax Consequence would continue
to exist, to redeem the Securities, prior to ______ __, ____, in whole but not
in part for cash, upon not less than 30 nor more than 60 days' notice and
within 90 days following the occurrence of the Tax Event, at 100% of the
principal amount thereof plus accrued and unpaid interest, including Additional
Payments, if any, and following such redemption, all the Preferred Securities
will be redeemed by the Trust at the liquidation preference of $50 per each
Preferred Security plus accrued and unpaid distributions.
In lieu of the foregoing, the Company also shall have the option of
causing the Securities to remain outstanding and pay Additional Interest on the
Securities.
9. Notice of Redemption. Notice of redemption will be mailed at least
30 (or in the case of a redemption at the election of the Company, at least 20)
but not more than 60 days before the Redemption Date to each Holder of
8
<PAGE>
the Securities to be redeemed at his address of record. The Securities in
denominations larger than $__ may be redeemed in part but only in integral
multiples of $__. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest
ceases to accrue on the Securities or portions of them called for redemption.
If this Security is redeemed subsequent to a Regular Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Security is registered at the close of business on such record
date.
10. Mandatory Redemption. The Securities will mature on ______ __,
____, provided that the Company may shorten the maturity of the principal of
this Security to a date not earlier than ______ __, ____, as described in
paragraph 8 above, and may be redeemed, in whole or in part, at any time after
______ __, ____ or at any time in certain circumstances upon the occurrence of
a Tax Event. Upon the repayment of the Securities, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously be
applied to redeem Trust Securities having an aggregate liquidation amount of
the Securities so repaid or redeemed at the applicable redemption price
together with accrued and unpaid distributions through the date of redemption;
provided, that holders of the Trust Securities shall be given not less than 30
nor more than 60 days notice of such redemption. Upon the repayment of the
Securities at maturity or upon any acceleration, earlier redemption or
otherwise, the proceeds from such repayment will be applied to redeem the
Preferred Securities, in whole, upon not less than 30 nor more than 60 days'
notice. There are no sinking fund payments with respect to the Securities.
11. Subordination. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Indebtedness (as defined below) of the Company, as
described in the Indenture. Each holder, by accepting a Security, agrees to
such subordination and authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee as its attorney-in-fact for such purpose.
Senior Indebtedness shall mean in respect of the Company (i) the
principal, premium, if any, and interest in
9
<PAGE>
respect of (A) indebtedness of such obligor for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by such obligor, (ii) all capital lease obligations of such
obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement of 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) above of other Persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise, and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of such obligor (whether
or not such obligation is assumed by such obligor), except for (1) any such
indebtedness issued after the date of original issuance of the Securities that
is by its terms subordinated to or pari passu with the Securities and (2) any
indebtedness (including all other debt securities and guarantees in respect of
those debt securities) initially issued to any other trust, or a trustee of
such trust, partnership, or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle of the Company (a "Financing
Entity") in connection with the issuance by such Financing Entity of preferred
securities or other securities which by their terms rank pari passu with, or
junior to, the Preferred Securities. The Preferred Securities shall rank pari
passu with the 6 1/4% Term Income Deferrable Equity Securities of the Company
and the 6-1/4% Trust Convertible Preferred Securities of the Company. The
Securities shall rank pari passu with the 6 1/4% Convertible Junior
Subordinated Interest Debentures Due 2016 of the Company and the 6-1/4%
Convertible Junior Subordinated Debentures Due 2012 of the Company.
12. Conversion. The Holder of any Security has the right, exercisable
at any time beginning 60 days following ______ __, ____ and prior to the close
of business (New York time) on the date of the Security's maturity, to convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $__) into shares of Common Stock at an initial conversion rate of
____ shares of Common Stock for each Security (equivalent to a conversion price
of $____ per share of Common Stock of the Company), subject to adjustment under
certain circumstances, except that if a Security is called for redemption, the
10
<PAGE>
conversion right will terminate at the close of business on the Redemption Date.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or
transfer documents if required by the Security Registrar or Conversion Agent
and (4) pay any transfer or similar tax, if required. Upon conversion, no
adjustment or payment will be made for interest or dividends, but if any Holder
surrenders a Security for conversion after the close of business on the Regular
Record Date for the payment of an installment of interest and prior to the
opening of business on the next Interest Payment Date, then, notwithstanding
such conversion, the interest payable on such Interest Payment Date will be
paid to the registered Holder of such Security on such Regular Record Date. In
such event, such Security, when surrendered for conversion, need not be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the portion so converted. The number of shares
issuable upon conversion of a Security is determined by dividing the principal
amount of the Security converted by the conversion price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Security shall be reduced by the portion of the principal amount
thereof converted into shares of Common Stock.
13. Registration, Transfer, Exchange and Denominations. As provided in
the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in New York, New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $__ and integral multiples thereof. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Prior to due presentment of this
Security for registration of transfer, the Company, the Trustee and any agent
of the
11
<PAGE>
Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
14. Persons Deemed Owners. Except as provided in Section 4 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.
15. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
16. Defaults and Remedies. The Securities shall have the Events of
Default as set forth in Section 5.1 of the Indenture. If an Event of Default
occurs and is continuing, the Trustee by notice to the Company or the holders
of at least 25% in aggregate principal amount of the then outstanding
Securities by notice to the Company and the Trustee may declare all the
Securities to be due and payable immediately.
The holders of a majority in principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Securities issued under
the Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
17. Amendments, Supplements and Waivers. The Indenture permits, with
certain exceptions as therein pro-
12
<PAGE>
vided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
18. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
19. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
20. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
21. Authentication. The Securities shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee
or an authenticating agent.
22. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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<PAGE>
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention of: General Counsel
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<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
----------------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Date:
--------------------------------------------------------
Signature Guarantee:*
----------------------------------------
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
- --------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
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<PAGE>
ELECTION TO CONVERT
To: CalEnergy Company, Inc.
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion below designated, into
Common Stock of CALENERGY COMPANY, INC. in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Security, agrees to be bound by the
terms of the Registration Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Dated: ___________
in whole _____
Portions of Security to be
converted ($__ or integral
multiples thereof):
$
-------------------------
-----------------------------------
Signature (for conversion only)
Please Print or Typewrite Name
and Address, Including Zip
Code, and Social Security or
Other Identifying Number
-----------------------------------
-----------------------------------
-----------------------------------
Signature Guarantee:*
-------------
- --------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
A-1
<PAGE>
===================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
CALENERGY COMPANY, INC.
Dated as of __________, 1997
===================================
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of _____________, 1997, is executed and
delivered by CalEnergy Company, Inc., a Delaware corporation (the "Guarantor"),
and The Bank of New York, a New York banking corporation, as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
CalEnergy Capital Trust ___, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _____________, 1997, among the trustees of the
Issuer named therein, 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 _________ Preferred Securities, having an
aggregate stated liquidation preference of $___________, designated the _____%
Convertible Preferred Securities (plus up to an additional _______ Convertible
Preferred Securities, having an aggregate liquidation preference of
$__________, to cover over-allotments) (the "Preferred Securities");
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 Preferred Securities Guarantee, 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; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein) except that if an Event of Default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of
<PAGE>
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
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 Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee 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 Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
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<PAGE>
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Person" of a Person means any Person that is authorized to
bind such Person; provided, however that the Authorized Officer signing an
Officer's Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"Common Securities" means the convertible common securities
representing common undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of convertible junior subordinated debt
securities of the Guarantor designated the _____% Convertible Junior
Subordinated Debentures Due ____ held by the Property Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"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 such Preferred
Securities to the extent the Issuer shall have funds available therefore, (ii)
the amount payable upon redemption 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
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation preference
and all accrued and unpaid
3
<PAGE>
Distributions on the Preferred Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders upon liquidation of
the Issuer (in either case, the "Liquidation Distribution"). If an event of
default under the Indenture has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments.
"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" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture, dated as of _____________, 1997,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the Property Trustee of the Issuer.
"Majority in liquidation preference of the Securities" means, except
as provided by the Trust Indenture Act, Holder(s) of Preferred Securities,
voting separately as a class, representing more than 50% of the stated
liquidation preference (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities then outstanding.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
pro-
4
<PAGE>
vided for in this Preferred Securities Guarantee shall include:
(a) a statement that the officer signing the 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 upon which the statements or opinions contained in
such Certificate are based;
(c) a statement that, in such officer's opinion, such officer has made
or caused to be made such examination or investigation as is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Guarantee Trustee" means The Bank of New York until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, the chairman of the board of directors, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other
5
<PAGE>
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee, which are incorporated by reference hereto, and shall, to
the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control;
SECTION 2.2 Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee Trustee (i)
within 14 days after February 15 and August 15 of each year, commencing _______
15, ____, a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date, 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 Preferred Guarantee Trustee, provided that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee
6
<PAGE>
by the Guarantor or the Preferred Securities are represented by one or more
Global Securities (as defined in the Indenture). The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee 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 Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, commencing _______, ____,
the Preferred 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 Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred 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 Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee 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.
7
<PAGE>
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation preference 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 Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have
been cured before the giving of such notice, provided, that, the Preferred
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 Preferred 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 Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Preferred Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of the Declaration shall have obtained
actual knowledge.
SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
8
<PAGE>
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee
Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The
right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred 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 Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
(c) The Preferred 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 Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, 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.
9
<PAGE>
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred 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 Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred 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
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
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Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Preferred 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 preference 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 Preferred Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred 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 the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred 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, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
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(ii) any direction or act of the Preferred Securities Guarantor
contemplated by this Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred 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 Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of the
Guarantor's employees. The Preferred Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee
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Trustee such adequate security and indemnity reasonably satisfactory
to the Preferred Guarantee Trustee, 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 Preferred Guarantee Trustee; provided
that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve
the Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it
by this Preferred Securities Guarantee;
(vii) the Preferred 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, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Preferred 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 Preferred 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 Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred 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 Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of
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which shall be conclusively evidenced by the Preferred Guarantee
Trustee's or its agent's taking such action; and
(x) whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of the Preferred Securities or the
Guarantor, (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 Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred 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 Preferred 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
authority available to the Preferred 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 Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representations as to the validity or sufficiency of
this Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred 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 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining 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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.
(a) Subject to ss. 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with ss. 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of removal or resignation, the Preferred
Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Preferred Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee
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all amounts accrued and payable to the Preferred Guarantee Trustee to the date
of such termination, removal or resignation.
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.
SECTION 5.2 Subordination
If an Event of Default (as defined in the Indenture), has occurred and
is continuing, the rights of Holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to
the rights of Holders of Preferred Securities to receive Guarantee Payments
under this Preferred Securities Guarantee.
SECTION 5.3 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee 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 5.4 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by
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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, the amount payable upon redemption, 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, the amount payable upon
redemption, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures or any extension of
the maturity date of the 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;
(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 5.4 that the obligations of the Guarantor hereun-
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der shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other Person to
give notice to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.5 Rights of Holders.
(a) The Holders of a Majority in liquidation preference of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may directly institute
a legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person.
(c) If an Event of Default with respect to the Debentures (an
"Indenture Event of Default"), constituting the failure to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of any redemption, the redemption date) has occurred
and is continuing, then a Holder of Preferred Securities may directly, at any
time, institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder on
or after the respective due date (or redemption date) specified in the
Debentures.
SECTION 5.6 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
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SECTION 5.7 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 Preferred Securities
Guarantee; 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 Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. 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 5.8 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.4 hereof.
SECTION 5.9 Conversion
The Guarantor acknowledges its obligation to issue and deliver common
stock upon the conversion of the Preferred Securities.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if at such
time (i) the Guarantor has exercised its option to defer interest payments on
the Debentures and such deferral is continuing, (ii) the Guarantor
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shall be in default with respect to its payment or other obligations under this
Preferred Securities Guarantee or (iii) there shall have occurred and be
continuing any event that, with the giving of notice or the lapse of time or
both, would constitute an Event of Default under the Indenture, then the
Guarantor shall not (a) 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 (1) purchases or
acquisitions of shares of common stock in connection with the satisfaction by
the Guarantor of its obligations under any employee benefit plans, (2) as a
result of a reclassification of capital stock of the Guarantor or the exchange
or conversion of one class or series of the Guarantor's capital stock for
another class or series of capital stock of the Guarantor, (3) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock of the Guarantor or the
security being converted or exchanged or (4) stock dividends paid by the
Guarantor which consist of stock of the same class as that on which the
dividend is being paid), (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Guarantor after the date hereof that ranks pari passu with or junior to
the Debentures and (c) make any guarantee payments with respect to the
foregoing (other than pursuant to this Preferred Securities Guarantee).
SECTION 6.2 Ranking.
This Preferred Securities Guarantee 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, except any liabilities
that may be made pari passu expressly by their terms, (ii) pari passu with the
most senior preferred or preference 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 or preference stock or preferred security of any
Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the amount payable upon redemption of all Preferred Securities, (ii)
the distribution of the Guarantor's common stock to the Holders in respect of
the conversion of the Preferred Securities into the Guarantor's common stock or
the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under 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 Preferred
Securities Guarantee 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 Preferred Securities Guarantee 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
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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 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) The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability
or expense including taxes (other than taxes based on the income of such
Indemnified Person) incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the 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).
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee 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. Except in connection with any
merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of all or substantially all of the Guarantor's assets
to another entity as permitted under Article Eight of the Indenture, the
Guarantor may not assign its rights or delegate its obligations under the
Preferred Securities Guarantee without the prior approval of the Holders of a
Majority in liquidation preference of the Preferred Securities then
outstanding.
SECTION 9.2 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 Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation preference
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred
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Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
The Bank of New York
101 Barclay Street
21 West
Attention: Corporate Trust
Trustee Administration
New York, New York 10286
(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):
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: Chief Financial Officer
with a copy to: General Counsel
(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 pre-paid, 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 9.4 Benefit.
This Preferred Securities Guarantee 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 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CALENERGY COMPANY, INC.,
as Guarantor
By:
-------------------------------
Name: Steven A. McArthur
Title: Senior Vice President and
General Counsel
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By:
-------------------------------
Name:
Title:
<PAGE>
=================================
COMMON SECURITIES GUARANTEE AGREEMENT
CALENERGY COMPANY, INC.
Dated as of __________, 1997
=================================
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common Securities
Guarantee"), dated as of __________, 1997, is executed and delivered by
CalEnergy Company, Inc., a Delaware corporation (the "Guarantor"), for the
benefit of the Holders (as defined herein) from time to time of the Common
Securities (as defined in the Declaration) of CalEnergy Capital Trust ___, a
Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1997, among the Trustees of the Issuer
named therein, 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 _______ Common Securities, having an aggregate
stated liquidation amount of $_________ (plus up to an additional ______ Common
Securities, having an aggregate liquidation amount of $_________, to meet the
capital requirements of the Trust in the event of an issuance of Additional
Preferred Securities (as such term is defined in the Declaration)), designated
the _____% Convertible Common Securities;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement in substantially identical terms to this Common Securities Guarantee
for the benefit of the holders of the _____% Convertible Preferred Securities
(the "Preferred Securities") (the "Preferred Securities Guarantee") except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under this Common Securities Guarantee are subordinated to the rights
of
<PAGE>
Holders of Preferred Securities to receive Guarantee Payments under the
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
SECTION 1.1. In this Common Securities Guarantee, unless the context
otherwise requires, the terms set forth below shall have the following
meanings.
(a) Capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this
Common Securities Guarantee unless otherwise defined in this Common
Securities Guarantee.
(c) A term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;
(d) All references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or amended from time to time;
(e) All references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee
unless otherwise specified; and
(f) A reference to the singular includes the plural and vice versa.
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"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions which are required to be paid on such Common Securities to the
extent the Issuer shall have funds available therefore, (ii) the amount payable
upon redemption to the extent the Issuer has funds available therefor, with
respect to any Common 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 Debentures to the
Holders in exchange for Common Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Common Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities.
ARTICLE II
SECTION 2.1. 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 which 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.
SECTION 2.2. If an Event of Default (as defined in the Indenture), has
occurred and is continuing, the rights of Holders of the Common Securities to
receive Guarantee Payments under this Common Securities Guarantee are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under the Preferred Securities Guarantee.
3
<PAGE>
SECTION 2.3. The Guarantor hereby waives notice of acceptance of this
Common Securities Guarantee 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 2.4. The obligations, covenants, agreements and duties of the
Guarantor under this Common Securities Guarantee 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 Common 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, amount payable upon redemption, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of Distributions,
amount payable upon redemption, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the 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 Common
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,
4
<PAGE>
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 Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 2.3 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 or any other Persons to give notice
to, or obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 2.5. The Guarantor expressly acknowledges that any Holder of
Common Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Common Securities Guarantee, without
first instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.6. This Common Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 2.7. The Guarantor shall be subrogated to all (if any)
rights of the Holders of Common Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Common Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Common Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Common Securities Guarantee.
If any amount shall be paid to the Guarantor
5
<PAGE>
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 2.8. The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.4 hereof.
SECTION 2.9. The Guarantor acknowledges its obligation to issue and
deliver common stock upon the conversion of the Common Securities.
ARTICLE III
SECTION 3.1. So long as any Common Securities remain outstanding, if
(i) the Guarantor shall be in default with respect to its Guarantee Payments or
other obligations hereunder, (ii) there shall have occurred and be continuing
any event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Indenture or (iii) the Guarantor shall
have given notice of its selection of an Extended Interest Payment Period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then the Guarantor shall not (a) 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 (1)
purchases or acquisitions of shares of common stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (2) as a result of a reclassification of capital stock of the Guarantor
or the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of capital stock of the Guarantor, (3) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged
6
<PAGE>
or (4) stock dividends paid by the Guarantor which consist of stock of the same
class as that on which the dividend is being paid), (b) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Guarantor after the date hereof that ranks pari
passu with or junior to the Debentures and (c) make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee).
SECTION 3.2. This Common Securities Guarantee 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, except any
liabilities that may be made pari passu expressly by their terms, (ii) pari
passu with the most senior preferred or preference 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 or preference stock or preferred
security of any Affiliate of the Guarantor, and (iii) senior to the Guarantor's
common stock.
ARTICLE IV
SECTION 4.1. This Common Securities Guarantee shall terminate upon (i)
full payment of the amount payable upon redemption of the Common Securities,
(ii) the distribution of the Guarantor's common stock to the Holders in respect
of the conversion of the Preferred Securities into the Guarantor's common stock
or the distribution of the Debentures to the Holders of all of the Common
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.
7
<PAGE>
ARTICLE V
SECTION 5.1. All guarantees and agreements contained in this Common
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Common Securities then outstanding. Except in connection with
any merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of all or substantially all of the Guarantor's assets
to another entity as permitted under Article Eight of the Indenture, the
Guarantor may not assign its rights or delegate its obligations under the
Common Securities Guarantee without the prior approval of the Holders of at
least a Majority of the aggregate stated liquidation amount of the Common
Securities then outstanding.
SECTION 5.2. Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Common Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount of all the
outstanding Common Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
SECTION 5.3. All notices provided for in this Common Securities
Guarantee 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 Issuer, in care of the Regular Trustees at the
Issuer's mailing address set forth below (or such other address
as the Issuer may give notice of to the Holders of the Common
Securities):
8
<PAGE>
Steven A. McArthur
Craig Hammett
Gregory Abel
CalEnergy Capital Trust
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
(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 Common Securities):
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: Chief Financial Officer
with a copy to: General Counsel
(c) if given to any Holder of Common 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 pre-paid, 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 5.4. This Common Securities Guarantee is solely for the
benefit of the Holders and is not separately transferable from the Common
Securities.
SECTION 5.5. THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
9
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year
first above written.
CALENERGY COMPANY,
INC., as Guarantor
By:
-------------------------------
Name: Steven A. McArthur
Title: Senior Vice President
and General Counsel
<PAGE>
EXHIBIT 5.1
[Willkie Farr & Gallagher Letterhead]
September 18, 1997
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Re: CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel in connection with the
Company's Registration Statement on Form S-3 (the "Registration Statement")
filed with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, for the registration of the sale by CalEnergy
Company, Inc. (the "Company") from time to time of up to $1,500,000,000
aggregate principal amount of (i) senior debt securities, subordinated debt
securities and convertible junior subordinated debt securities (collectively,
the "Debt Securities"), (ii) preferred stock, no par value (the "Preferred
Stock"), of the Company, (iii) common stock, par value $0.0675 per share (the
"Common Stock"), of the Company, (iv) convertible preferred securities (the
"Convertible Preferred Securities") of CalEnergy Capital Trust IV, CalEnergy
Capital Trust V and CalEnergy Capital Trust VI, each a statutory business
trust created under the Business Trust Act of the State of Delaware (each, a
"Trust" and, collectively, the "Trusts") and (v) guarantees of the Convertible
Preferred Securities by the Company (the "Guarantees"). The senior Debt
Securities are to be issued pursuant to an Indenture (the "Senior Debt
Indenture") between the Company and IBJ Schroder Bank & Trust Company, as
trustee. The subordinated Debt Securities are to be issued
<PAGE>
CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
September 18, 1997
page 2
pursuant to an Indenture (the "Subordinated Debt Indenture") between the
Company and The Bank of New York, as trustee. The convertible junior
subordinated Debt Securities are to be issued pursuant to an Indenture (the
"Convertible Junior Subordinated Debt Indenture") between the Company and The
Bank of New York, as trustee. The Senior Debt Indenture, the Subordinated Debt
Indenture and the Convertible Junior Subordinated Debt Indenture are referred
to herein collectively as the "Indentures".
The Convertible Preferred Securities are to be issued
pursuant to an Amended and Restated Declaration of Trust among the Company, as
sponsor, The Bank of New York, as property trustee, The Bank of New York
(Delaware), as Delaware trustee, and certain individuals named therein as the
initial regular trustees.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates, and other instruments as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In connection with the opinions expressed above, we have
assumed that, at or prior to the time of the delivery of any such security,
(i) the Company or the relevant Trust, as the case may be, shall have duly
established the terms of such security and duly authorized the issuance and
sale of such security and such authorization shall not have been modified or
rescinded; (ii) such parties other than the Company or the relevant Trust
shall have the power, corporate or other, to enter into and perform all
obligations in accordance with the documents to be executed by such parties
and we have also assumed that upon the execution and delivery by such parties
of such documents that such documents shall constitute valid and binding
obligations of such parties; (iii) the Registration Statement shall have been
declared effective and such effectiveness shall not have been terminated or
rescinded; and (iv) there shall not have occurred any change in law affecting
the validity or enforceability of such security. We have also assumed that
none of the terms of any security to be established subsequent to the date
hereof, nor the issuance and delivery of such security, nor the compliance by
the Company with the terms of such security will violate any applicable law or
will result in a violation of any provision of any instrument or agreement
then binding upon the Company or the relevant Trust, or any restriction
imposed by any court or governmental body having jurisdiction over the Company
or the relevant Trust.
<PAGE>
CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
September 18, 1997
Page 3
Based on and subject to the foregoing and to the other
qualifications and limitations set forth herein, we are of the opinion that:
1. When the Indentures and any supplemental indenture to be
entered into in connection with the issuance of any Debt Security
have been duly authorized, executed and delivered by the relevant
trustee and the Company, the specific terms of a particular Debt
Security have been duly authorized and established in accordance with
the applicable Indenture and such Debt Security has been duly
authorized, executed, authenticated, issued and delivered in
accordance with the applicable Indenture and the applicable
underwriting or other agreement, such Debt Security will constitute a
valid and binding obligation of the Company, enforceable in
accordance with its terms, except as to the extent that enforcement
may be limited by (a) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar other laws now or hereinafter
in effect relating to or affecting the enforcement of creditors'
rights generally and (b) of general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
2. Upon designation of the relative rights, preferences and
limitations of any series of Preferred Stock by the Board of
Directors of the Company and the proper filing with the Secretary of
State of the State of Delaware of a Certificate of Designation
relating to such series of Preferred Stock, all necessary corporate
action on the part of the Company will have been taken to authorize
the issuance and sale of such series of Preferred Stock proposed to
be sold by the Company, and when such shares of Preferred Stock are
issued and delivered in accordance with the applicable underwriting
or other agreement, such shares of Preferred Stock will be validly
issued, fully paid and non-assessable and enforceable in accordance
with their terms, except as to the extent that enforcement may be
limited by (a) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereinafter
in effect relating to or affecting the enforcement of creditors'
rights generally and (b) of general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
3. When all necessary corporate action on the part of the
Company has been taken to authorize the issuance and sale of such
shares of Common Stock proposed to be sold by the Company under the
Registration Statement, including upon conversion of the Debt
Securities, the Preferred Stock or
<PAGE>
CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
September 18, 1997
Page 4
the Convertible Preferred Securities, and when such shares of Common
Stock are issued and delivered in accordance with the applicable
underwriting or other agreement, such shares of Common Stock will be
validly issued, fully paid and non-assessable.
4. When the Guarantees have been duly authorized by the
Company, the Guarantees have been duly executed and delivered by the
Company and the Preferred Securities have been duly issued and
delivered by the applicable Trust as contemplated by the Registration
Statement and any prospectus supplement relating thereto, the
Guarantees will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except to the
extent that enforcement may be limited by (a) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar other
laws now or hereinafter in effect relating to or affecting the
enforcement of creditors' rights generally and (b) general principles
of equity (regardless of whether considered in a proceeding at law or
in equity).
The opinions expressed herein are limited to the laws of the
State of New York, the General Corporation Law of the State of Delaware and
the federal laws of the United States of America, and we express no opinion
with respect to the laws of any other country, state or jurisdiction.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement and to the use of our
name under the heading "Legal Matters" in the Registration Statement and in
the related prospectus or any supplemental prospectus thereto.
This opinion is rendered solely to you in connection with
the above matter. This opinion may not be relied upon by you for any other
purpose or relied upon by or furnished to any other person without our prior
written consent.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE>
Exhibit 5.2
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Telephone: (402) 341-4500
Facsimile (402) 231-1598
September 18, 1997
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Re: CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
Registration Statement on Form S-3
Ladies and Gentlemen:
I am the Senior Vice President and General Counsel of CalEnergy Company, Inc.,
a Delaware corporation (the "Company"). This opinion is being furnished in
connection with the Company's Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended, for the
registration of the sale by the Company from time to time of up to
$1,500,000,000 aggregate principal amount of (i) senior debt securities,
subordinated debt securities and convertible junior subordinated debt
securities (the "Convertible Junior Subordinated Debentures") (collectively,
the "Debt Securities"), (ii) preferred stock, no par value (the "Preferred
Stock"), of the Company, (iii) common stock, par value $0.0675 per share (the
"Common Stock"), of the Company and (iv) convertible preferred securities (the
"Convertible Preferred Securities") of CalEnergy Capital Trust IV, CalEnergy
Capital Trust V and CalEnergy Capital Trust VI, each a statutory business
trust created under the Business Trust Act of the State of Delaware (each, a
"Trust" and, collectively, the "Trusts") and (v) guarantees of the Convertible
Preferred Securities by the Company (the "Guarantees"). The senior Debt
Securities are to be issued pursuant to an Indenture (the "Senior Debt
Indenture") between the Company and IBJ Schroder Bank & Trust Company, as
trustee. The subordinated Debt Securities are to be issued pursuant to an
Indenture (the "Subordinated Debt Indenture") between the Company and The Bank
of New York, as trustee. The Convertible Junior Subordinated Debentures are to
be issued pursuant to an Indenture (the " Convertible Junior Subordinated Debt
Indenture") between the Company and The Bank
<PAGE>
CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
September 18, 1997
Page 2
of New York, as trustee. The Senior Debt Indenture, the Subordinated Debt
Indenture and the Convertible Junior Subordinated Debt Indenture are referred
to herein collectively as the "Indentures".
The Convertible Preferred Securities are to be issued pursuant to an Amended
and Restated Declaration of Trust (the "Declaration") among the Company, as
sponsor, The Bank of New York (Delaware), as Delaware trustee, The Bank of New
York, as property trustee, and certain individuals who shall be named therein
as the initial regular trustees. Upon issuance, the Convertible Preferred
Securities will be guaranteed by the Company as to the payment of
distributions and will be guaranteed as to payments on liquidation, redemption
and otherwise pursuant to the Guarantees between the Company and The Bank of
New York, as trustee. The proceeds from the sale by the applicable Trust of
the Convertible Preferred Securities will be invested in Convertible Junior
Subordinated Debentures, which will be issued pursuant to the Convertible
Junior Subordinated Debt Indenture.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement; (ii) the form of the Declaration filed as an exhibit to the
Registration Statement; (iii) the form of the Common Stock certificate filed
as an exhibit to the Registration Statement and a specimen certificate
thereof; (iv) the Restated Certificate of Incorporation of the Company as
currently in effect; (v) the By-laws of the Company as currently in effect;
(vi) the form of the Guarantee filed as an exhibit to the Registration
Statement; (vii) the form of Convertible Preferred Securities filed as an
exhibit to the Registration Statement and a specimen certificate thereof;
(viii) the form of the Convertible Junior Subordinated Debentures filed as an
exhibit to the Registration Statement and a specimen certificate thereof; and
(ix) the forms of the Indentures.
In my examination, I have assumed the legal capacity of all natural persons,
the genuineness of all signatures, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. In making my examination of documents, I have
assumed that such parties other than the Company or the relevant Trust shall
have the power, corporate or other, to enter into and perform all obligations
in accordance with the documents to be executed by such parties and have also
assumed that upon the execution and delivery by such parties of such documents
that
<PAGE>
CalEnergy Company, Inc.
CalEnergy Capital Trust IV
CalEnergy Capital Trust V
CalEnergy Capital Trust VI
September 18, 1997
Page 3
such documents shall constitute valid and binding obligations of such parties.
In addition, I have assumed that the shares of Common Stock to be issued under
the Registration Statement, including upon conversion of the Debt Securities,
the Preferred Stock or the Convertible Preferred Securities, will be in the
form reviewed by me. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon oral
or written statements and representations of officers, trustees and other
representatives of the Company, the Trusts and others.
The opinions expressed herein are limited to the Federal laws of the United
States of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and I express no opinion with
respect to the laws of any other country, state or jurisdiction.
Based upon and subject to the foregoing, I am of the opinion that the shares
of Common Stock, when issued under the Registration Statement, including upon
conversion of the Debt Securities, the Preferred Stock or the Convertible
Preferred Securities, shall be duly authorized and, where applicable, reserved
for issuance upon conversion and, when certificates representing the Common
Stock in the form of the specimen certificate examined by me have been signed
by an authorized officer of the transfer agent and registrar for the Common
Stock and are issued under the Registration Statement, including upon
conversion of the Debt Securities, the Preferred Stock or the Convertible
Preferred Securities, such shares of Common Stock will be validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. I also consent to the reference to me
under the heading "Legal Matters" in the Registration Statement, and in the
related Prospectus and any supplement thereto. In giving this consent, I do
not thereby admit that I am included in the category of persons whose consent
is required under Section 7 of the Act or the rules and regulations of the
Commission.
Sincerely,
/s/ Steven A. McArthur
Steven A. McArthur
Senior Vice President
and General Counsel
<PAGE>
[Letterhead of Morris, Nichols, Arsht & Tunnell]
September 18, 1997
The CalEnergy Trusts
(as defined below)
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Re: The CalEnergy Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy Capital Trust IV,
each a Delaware statutory business trust (collectively referred to herein as
the "CalEnergy Trusts" and each individually as a "CalEnergy Trust"), in
connection with certain matters of Delaware law relating to the registration
of Preferred Securities pursuant to Registration Statement No. 333-32821 on
Form S-3 as filed with the Securities and Exchange Commission on August 4,
1997 and Pre-Effective Amendment No. 1 thereto as filed on the date hereof (as
so amended, the "Registration Statement"). Capitalized terms used herein and
not otherwise herein defined are used as defined in the form of the Amended
and Restated Declaration of Trust attached as an exhibit to the Registration
Statement.
In rendering this opinion, we have examined copies of the
following documents in the forms provided to us: the Certificates of Trust of
CalEnergy Capital Trust IV and CalEnergy Capital Trust V, each as filed in the
Office of the Secretary of State of Delaware (the "State Office") on August 4,
1997, and the Certificate of Trust of CalEnergy Capital Trust VI, as filed in
the State Office on September 16, 1997 (the Certificate of Trust of each
CalEnergy Trust is referred to herein as a "Certificate"); the Declaration of
Trust of CalEnergy Capital Trust IV and CalEnergy Capital Trust V, each dated
as of August 4, 1997, and the Declaration of Trust of CalEnergy Capital Trust
VI, dated as of September 16, 1997 (the Declaration of Trust of each CalEnergy
Trust is referred to herein as an "Original Governing Instrument"); the form
of Amended and Restated Declaration of Trust attached as an exhibit to the
Registration Statement; and the Registration Statement. In such examinations,
we have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal
<PAGE>
The CalEnergy Trusts
c/o CalEnergy Company, Inc.
September 18, 1997
Page 2
capacity of natural persons to complete the execution of documents. We have
further assumed for purposes of this opinion: (i) the due authorization,
organization or creation, valid existence and good standing of the CalEnergy
Trusts and each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation, organization
or creation; (ii) the due authorization, execution and delivery by, or on
behalf of, each of the parties thereto of the above referenced documents with
respect to each CalEnergy Trust; (iii) that CalEnergy Company, Inc., The Bank
of New York, The Bank of New York (Delaware) and the appropriate Regular
Trustees will duly authorize, execute and deliver an amended and restated
declaration of trust for each CalEnergy Trust in the form of the Amended and
Restated Declaration of Trust attached as an exhibit to the Registration
Statement (each a "Governing Instrument") and all other documents contemplated
thereby or by the Registration Statement to be executed in connection with the
creation of each CalEnergy Trust and the issuance by each such CalEnergy Trust
of Preferred Securities, in each case prior to the first issuance of Preferred
Securities; (iv) that the Preferred Securities of each CalEnergy Trust will be
offered and sold pursuant to a prospectus and a prospectus supplement thereto
(collectively, the "Prospectus") that will be consistent with, and accurately
describe, the terms of the applicable Governing Instrument relating to each
such CalEnergy Trust and all other relevant documents; (v) that no event has
or will occur subsequent to the filing of any Certificate that would cause a
dissolution or liquidation of any CalEnergy Trust under the applicable
Original Governing Instrument or the applicable Governing Instrument; (vi)
that the activities of each CalEnergy Trust have been and will be conducted in
accordance with its Original Governing Instrument or Governing Instrument, as
applicable, and the Delaware Business Trust Act, 12 Del. C. Section 3801 et
seq. (the "Delaware Act"); (vii) that each Holder of Preferred Securities of
each CalEnergy Trust will make payment of the required consideration therefor
and receive a Preferred Securities Certificate in consideration thereof in
accordance with the terms and conditions of the applicable Governing
Instrument and as described in the Prospectus, and that the Preferred
Securities of each CalEnergy Trust are otherwise issued and sold to the
Preferred Securities Holders of such CalEnergy Trust in accordance with the
terms, conditions, requirements and procedures set forth in the applicable
Governing Instrument and as described in the Prospectus; and (viii) that the
documents examined by us, or contemplated hereby, express the entire
understanding of the parties thereto with respect to the subject matter
thereof and have not been, and, prior to the issuance of Preferred Securities
by each CalEnergy Trust, will not be, modified, supplemented or otherwise
amended, except as herein referenced. No opinion is expressed with respect to
the requirements of, or compliance with, federal or state securities or blue
sky laws. Further, we express no opinion with respect to
<PAGE>
The CalEnergy Trusts
c/o CalEnergy Company, Inc.
September 18, 1997
Page 3
the Registration Statement or any other offering materials relating to the
Preferred Securities offered by any CalEnergy Trust and we assume no
responsibility for their contents. As to any fact material to our opinion,
other than those assumed, we have relied without independent investigation on
the above referenced documents and on the accuracy, as of the date hereof, of
the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that, upon issuance,
the Preferred Securities of each CalEnergy Trust will constitute validity
issued and, subject to the terms of the applicable Governing Instrument, fully
paid and non-assessable beneficial interests in the assets of such CalEnergy
Trust. We note that pursuant to Section 11.4 of the applicable Governing
Instrument, each CalEnergy Trust may withhold amounts otherwise distributable
to a Holder of Securities in such CalEnergy Trust and pay over such amounts to
the applicable jurisdictions in accordance with federal, state and local law
and any amounts withheld will be deemed to have been distributed to such
Holder and that, pursuant to the applicable Governing Instrument, the
Preferred Security Holders of each CalEnergy Trust may be obligated to make
payments or provide indemnity or security under the circumstances set forth
therein.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
heading "LEGAL MATTERS" in the Prospectus forming a part thereof. In giving
this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and our
review of the above referenced documents and the application of Delaware law
as the same exist on the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of any person
or entity with respect to any facts or circumstances that may hereafter come
to our attention or any changes in facts or law that may hereafter occur or
take effect. This opinion is intended solely for the benefit of the addresses
hereof in connection with the matters contemplated hereby and may not be
relied upon by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS,
ARSHT & TUNNELL
--------------------------------
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
Exhibit 12.1
CALENERGY COMPANY, INC.
Ratio of Earnings to Fixed Charges
(Dollars in Thousands, Except Ratio)
<TABLE>
<CAPTION>
Six Months Ended
June 30 Year Ended December 31
--------------------------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Pre-tax income from
continuing operations..................... $117,528 $49,270 $135,713 $97,051 $55,838 $81,258 $50,732
--------- ------- -------- ------- ------- ------- -------
Loss on equity investment in
unconsolidated subsidiary................. 3,957 2,774 5,221 382 -- -- --
----- ----- ----- --- -- -- --
Capitalized interest,
net of amortization....................... (21,150) (22,701) (37,476) (31,160) (9,198) (6,174) (5,202)
-------- -------- -------- -------- ------- ------- -----
100,335 29,343 103,458 66,253 46,640 55,084 45,530
Fixed Charges: ------- ------ ------- ------ ------ ------ ------
Interest expense and amortization of
deferred finance charges on all
indebtness............................ 142,266 71,504 165,900 134,637 62,837 30,205 20,459
------- ------ ------- ------- ------ ------ ------
Interest portion of lease rentals........ 30 30 60 60 109 247 253
-- -- -- -- --- --- ---
Dividends on convertible preferred
securities.............................. 7,154 -- 4,691 -- -- -- --
----- -- ----- -- -- -- --
Preferred stock dividends of
subsidiaries, gross of tax.............. 1,339 -- -- -- -- -- --
----- -- -- -- -- -- --
Total fixed charges...................... 150,789 71,534 170,851 134,897 62,946 30,452 20,712
------- ------ ------- ------- ------ ------ ------
Earnings before income
and fixed charges......................... $251,124 $100,877 $274,108 $200,850 109,586 85,536 86,242
-------- -------- -------- -------- ------- ------ ------
Ratio of earnings to fixed charges........... 1.665 1.410 1.606 1.492 1,741 2.809 3.198
----- ----- ----- ----- ----- ----- -----
--------------------------------------------------------------------------------------
</TABLE>
<PAGE>
[Deloitte & Touche LLP letterhead]
September 17, 1997
CalEnergy Company, Inc.
302 South 36th Street - Suite 400
Omaha, Nebraska 68131
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of CalEnergy Company, Inc. and subsidiaries for the periods ended
March 31, 1997 and 1996 and June 30, 1997 and 1996, as indicated in our reports
dated April 29, 1997 and August 12, 1997, respectively; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, are being used in this Amendment No. 1 to Registration Statement No.
333-32821 on Form S-3.
We also are aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
<PAGE>
17 September 1997
The Board of Directors
Northern Electric plc
Carliol House
Market Street
Newcastle upon Tyne
NE1 6NE
Dear Sirs
We are aware of the incorporation by reference in Amendment No. 1 to the
Registration Statement (Form S-3 No. 333-32821) of CalEnergy Company, Inc. for
the registration of its Senior Debt Securities and Subordinated Debt
Securities, Preferred Stock and Common Stock and CalEnergy Capital Trust IV,
CalEnergy Capital Trust V and CalEnergy Capital Trust VI for the registration
of their Convertible Preferred Securities, in aggregate amount of
$1,500,000,000 of our report dated November 29, 1996 relating to the unaudited
condensed interim financial statements of Northern Electric plc that are
included in the Current Report on Form 8-K/A dated February 18, 1997 of
CalEnergy Company, Inc.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not part of
the registration statement prepared or certified by accountants within the
meaning of Sections 7 or 11 of the Securities Act of 1933.
Yours faithfully
/s/ Ernst & Young
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-32821 of CalEnergy Company, Inc., CalEnergy
Capital Trust IV, CalEnergy Capital Trust V, and CalEnergy Capital Trust VI on
Form S-3 of our reports dated January 31, 1997 (February 27, 1997 as to Notes 6
and 20 to the consolidated financial statements), appearing in and incorporated
by reference in the Annual Report on Form 10-K of CalEnergy Company, Inc. for
the year ended December 31, 1996, and to the reference to us under the heading
"Experts" in the Prospectus, which is a part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
September 17, 1997
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-32821) of
CalEnergy Company, Inc. for the registration of its Senior Debt Securities and
Subordinated Debt Securities, Preferred Stock and Common Stock and CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy Capital Trust VI for
the registration of their Convertible Preferred Securities, in aggregate amount
of $1,500,000,000 and to the incorporation by reference therein of our report
dated June 20, 1996 with respect to the consolidated financial statements of
Northern Electric plc included in the Current Report on Form 8-K/A dated
February 18, 1997 of CalEnergy Company, Inc. filed with the Securities and
Exchange Commission.
/s/ Ernst & Young
Ernst & Young
Chartered Accountants
Newcastle Upon Tyne
England
17 September 1997
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement of CalEnergy Company, Inc. (the "Company"), CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy Capital Trust VI on
Form S-3 of our report dated March 10, 1995 on our audit of the consolidated
financial statements of Magma Power Company and subsidiaries for the year ended
December 31, 1994 which report is included in the Company's Form 10-K for the
year ended December 31, 1996. We also consent to the reference to our Firm
under the caption "Experts".
/s/ Coopers & Lybrand LLP
San Diego, California
September 17, 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (B) (2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Barbara McCluskey, Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
CALENERGY COMPANY, INC.
(Exact name of obligor as specified in its charter)
Delaware 94-2213782
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
(Address of principal executive office) (Zip code)
SENIOR DEBT SECURITIES
(Title of Indenture Securities)
1
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate
trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of September 16, 1997
Col. A Col. B
Title of class Amount Outstanding
Not Applicable
2
<PAGE>
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under each such
other indenture
Not Applicable
(b) A brief statement of the facts relied upon as a
basis for the claim that no conflicting interest
within the meaning of Section 310 (b) (1) of the
Act arises as a result of the trusteeship under any
such other indenture, including a statement as to
how the indenture securities will rank as compared
with the securities issued under such other
indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers
of the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person
having any such connection and state the nature of each such
connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or
its officials.
Furnish the following information as to the voting
securities of the trustee owned beneficially by the obligor
and each director, partner, and executive officer of the
obligor:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or
their officials.
3
<PAGE>
Furnish the following information as to the voting
securities of the trustee owned beneficially by each
underwriter for the obligor and each director, partner and
executive officer of each such underwriter:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security
for obligations in default by the trustee:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given
obligations in default in Col. C
Not Applicable
4
<PAGE>
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of an
underwriter for the obligor, furnish the following
information as to each class of securities of such
underwriter any of which are so owned or held by the
trustee:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given
obligations in default in Col. C
Not Applicable
Item 10. Ownership or holdings by the trustee of voting
securities of certain affiliates or Securityholders of the
obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default voting securities of a
person who, to the knowledge of the trustee (1) owns 10
percent or more of the voting securities of the obligor or
(2) is an affiliate, other than a subsidiary, of the
obligor, furnish the following information as to the voting
securities of such person:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given
obligations in default in Col. C
Not Applicable
Item 11. Ownership or holdings by the trustee of any securities of
a person owning 50 percent or more of the voting securities
of the obligor.
5
<PAGE>
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of a
person who, to the knowledge of the trustee, owns 50 percent
or more of the voting securities of the obligor, furnish the
following information as to each class of securities of such
any of which are so owned or held by the trustee:
As of September 16, 1997
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is
indebted to the trustee, furnish the following information:
As of September 16, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given
obligations in default in Col. C
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Not Applicable
(b) If the trustee is a trustee under another indenture
under which any other securities, or certificates
of interest or participation in any other
securities, of the obligor are outstanding, or is
trustee for more than one outstanding series of
securities under the indenture, state whether there
has been a default under any such indenture or
series, identify the indenture or series affected,
and explain the nature of any such default.
6
<PAGE>
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe
each such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign
trustee is authorized to act as sole trustee under
indentures qualified or to be qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
*4. A copy of the existing By-Laws of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
7
<PAGE>
5. A copy of each Indenture referred to in Item 4, if
the Obligor is in default. Not Applicable.
6. The consent of the United States institutional
trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2,
the answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee
as indicated in Item 13, the obligor is not in default under any
indenture under which the applicant is trustee.
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, IBJ Schroder Bank & Trust
Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City
of New York, and State of New York, on the 16th day of
September, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Barbar McCluskey
-----------------------------------
Barbara McCluskey
Vice President
9
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the
proposed issue of Calenergy Company Inc. Senior Debt
Securities, we hereby consent that reports of examinations
by Federal, State, Territorial, or District authorities may
be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Barbara McCluskey
------------------------------------
Barbara McCluskey
Vice President
Dated: September 16, 1997
10
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, IBJ Schroder Bank & Trust
Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City
of New York, and State of New York, on the 16th day of
September, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Barbara McCluskey
---------------------------------
Barbara McCluskey
Vice President
11
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the
proposed issue of Calenergy Company Inc. Senior Debt
Securities, we hereby consent that reports of examinations
by Federal, State, Territorial, or District authorities may
be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Barbara McCluskey
---------------------------------
Barbara McCluskey
Vice President
Dated: September 16, 1997
12
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
OF NEW YORK, NEW YORK
AND FOREIGN AND DOMESTIC SUBSIDIARIES
REPORT AS OF JUNE 30, 1997
<TABLE>
DOLLAR AMOUNTS
IN THOUSANDS
<CAPTION>
ASSETS
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin .........................................................$ 41,319
Interest-bearing balances.....................................................................................$ 314,579
Securities: Held-to-maturity securities........................................................................$ 180,111
Available-for-sale securities......................................................................$ 47,600
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold and Securities purchased under agreements to resell........................................$ 694,859
Loans and lease financing receivables:
Loans and leases, net of unearned income....................................................$ 1,955,686
LESS: Allowance for loan and lease losses...................................................$ 62,876
LESS: Allocated transfer risk reserve.......................................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve..............................................$ 1,892,810
Trading assets held in trading accounts...........................................................................$ 603
Premises and fixed assets (including capitalized leases)..........................................................$ 3,709
Other real estate owned...........................................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies...............................................$ -0-
Customers' liability to this bank on acceptances outstanding......................................................$ 81
Intangible assets.................................................................................................$ -0-
Other assets......................................................................................................$ 67,092
TOTAL ASSETS......................................................................................................$ 3,242,965
<PAGE>
LIABILITIES
Deposits:
In domestic offices...........................................................................................$ 1,694,675
Noninterest-bearing ....................................................................$ 263,641
Interest-bearing .......................................................................$ 1,431,034
In foreign offices, Edge and Agreement subsidiaries, and IBFs.................................................$ 1,121,075
Noninterest-bearing ....................................................................$ 17,535
Interest-bearing ...................................................................... $ 1,103,540
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and
in IBFs:
Federal Funds purchased and Securities sold under agreements to repurchase....................................$ 25,000
Demand notes issued to the U.S. Treasury..........................................................................$ 60,000
Trading Liabilities...............................................................................................$ 140
Other borrowed money:
a) With a remaining maturity of one year or less..............................................................$ 38,369
b) With a remaining maturity of more than one year............................................................$ 1,763
c) With a remaining maturity of more than three years.........................................................$ 2,242
Bank's liability on acceptances executed and outstanding..........................................................$ 81
Subordinated notes and debentures.................................................................................$ -0-
Other liabilities.................................................................................................$ 69,908
TOTAL LIABILITIES.................................................................................................$ 3,013,253
Limited-life preferred stock and related surplus..................................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................$ -0-
Common stock......................................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)..........................................................$ 217,008
Undivided profits and capital reserves............................................................................$ (17,000)
Net unrealized gains (losses) on available-for-sale securities....................................................$ 55
Cumulative foreign currency translation adjustments...............................................................$ -0-
TOTAL EQUITY CAPITAL..............................................................................................$ 229,712
TOTAL LIABILITIES AND EQUITY CAPITAL..............................................................................$ 3,242,965
</TABLE>
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------------
CALENERGY CAPITAL TRUST IV
CALENERGY CAPITAL TRUST V
CALENERGY CAPITAL TRUST VI
(Exact name of obligor as specified in its charter)
Delaware Application pending
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
(Address of principal executive offices) (Zip code)
----------------------
Convertible Preferred Securities
(Title of the indenture securities)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of September, 1997.
THE BANK OF NEW YORK
By: /S/WALTER N. GITLIN
-----------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10266
And Foreign and Domestic Subsidiaries
a member of the Federal Reserve System, at the close of business March 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...... $8,249,820
Interest-bearing balances............................... 1,031,026
Securities:
Held-to-maturity securities............................. 1,118,463
Available-for-sale securities........................... 3,005,838
Federal funds sold and Securities purchased under
agreements to resell.................................... 3,100,281
Loans and lease financing receivables:
Loans and leases net of unearned income.......32,895,077
LESS: Allowance for loan and lease losses........633,877
LESS: Allocated transfer risk reserve................429
Loans and leases, net of unearned income, allowance
and reserve............................................ 32,260,771
Assets held in trading accounts............................ 1,715,214
Premises and fixed assets (including capitalized leases)... 684,704
Other real estate owned.................................... 21,738
Investments in unconsolidated subsidiaries and associated
companies............................................... 195,761
Customers' liability to this bank on acceptances
outstanding.............................................. 1,152,899
Intangible assets.......................................... 683,503
Other assets............................................... 1,526,113
------------
Total assets............................................... $64,746,131
=============
LIABILITIES
Deposits:
In domestic offices...................................... $25,614,951
Noninterest-bearing............................10,564,652
Interest-bearing...............................15,050,309
In foreign offices: Edge and Agreement subsidiaries and
IBFs .................................................. 15,103,615
Noninterest-bearing...............................560,944
Interest-bearing...............................14,542,671
Federal funds purchased and Securities sold under
agreements to repurchase.................................. 2,093,286
Demand notes issued to the U.S. Treasury.................... 239,354
Trading liabilities......................................... 1,399,064
Other borrowed money:
With remaining maturity of one year or less................ 2,075,092
With remaining maturity of more than one year.............. 28,879
Bank's liability on acceptances executed and outstanding...... 1,160,120
Subordinated notes and debentures............................ 1,014,400
Other liabilities............................................ 1,840,245
-----------
Total liabilities............................................ 50,560,708
===========
EQUITY CAPITAL
Common stock................................................. 942,284
Surplus...................................................... 731,319
Undivided profits and capital reserves........................ 2,544,303
Net unrealized holding gains (losses) on available-for-sale
securities................................................. ( 19,449)
Cumulative foreign currency transaction adjustments.......... ( 13,034)
-----------
Total equity capital......................................... 4,185,423
-----------
Total liabilities and equity capital......................... $54,746,131
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct
Allan R. Griffith
J. Carter Basot Directors
Thomas A. Renyl
<PAGE>
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
CALENERGY COMPANY, INC.
(Exact name of obligor as specified in its charter)
Delaware 94-2213782
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Convertible Preferred Securities of
CalEnergy Capital Trust VI
(Title of the indenture securities)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 28th day of August, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
-------------------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, NY 10266
And Foreign and Domestic Subsidiaries
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
in Thousands
ASSETS
Cash and balances due from depostary institutions:
Noninterest-bearing balances and currency and con ...... $ 8,249,820
Interest-bearing balances .............................. 1,031,026
Securities:
Held-to-maturity securities ............................ 1,118,463
Avbailable-for-sale securities ......................... 3,005,838
Federal funds sold and Securities purchased under
agreements to lease .................................... 3,100,281
Loans and lease financing receivables:
Loans and leases net of unearned income ......32,895,077
LESS: Allowance for loan and lease losses .......633,877
LESS: Allocated transfer risk reserve ...............429
Loans and leases net of unearned income allowance and
reserve ............................................... 32,260,771
Assets held on trading accounts ......................... 1,715,214
Premises and fixed assets (including capitalized leases). 684,704
Other real estate owned ................................. 21,738
Investments in unconsoldated subsidiaries and associated
companies .............................................. 195,761
Customers liability to this bank on acceptances
outstanding ............................................ 1,152,899
Intangible be assets .................................... 683,503
Other assets ............................................ 1,525,113
------------
Total assets ............................................ $54,745,131
============
LIABILTIE:
Deposits
In domestic offices .................................... $25,614,951
Non-interest-bearing .........................10,564,652
Interest-bearing .............................15,050,309
In foreign offices Edge and Agreement subsidiaries
and IBFs .............................................. 15,103,615
Non-interest-bearing ............................560,944
Interest-bearing .............................14,542,671
Federal funds purchased and Securities sold under
agreements to repurchase ............................... 2,093,256
Demand notes issued to the US Treasury .................. 239,354
Trading liabilities ..................................... 1,399,064
Other borrowed money
With remaining maturity of one year or less ............ 2,075,092
With remaining maturity of more than one year .......... 20,679
Banks liability on acceptances executed and outstanding . 1,160,012
Subordinated notes and debentures ....................... 1,014,400
Other liabilities ....................................... 1,840,245
------------
Total liabilities ....................................... 50,560,708
============
EQUITY CAPITAL
Common stock ........................................... 942,284
Surplus ................................................ 731,319
Undivided profits and capital reserves ................. 2,544,303
Net unrealized holding gains (losses) on available-
for-sale securities ................................... (19,449)
Cumulative foreign currency translation adjustments .... (13,034)
------------
Total equity capital ................................... 4,155,423
------------
Total liabilities and equity capital ................... $54,746,131
============
I, Robert E. Keilman, Senior Vice President and Comptroller of the above
named bank do hereby declare that this Report of Condition has been prepared
in conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors attest to the correctness of this Report of
Condition and declare that it has been examined by us and is the best of
our knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and as true
and correct.
Alan R. Griffin
J. Cane Bacot Directors
Thomans A Fenyi
