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EXHIBIT 4.9
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALPINE CAPITAL TRUST III
AUGUST 9, 2000
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TABLE OF CONTENTS
ARTICLE I
Interpretation and Definitions
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Section 1.01 Definitions ................................................... 2
ARTICLE II
Trust Indenture Act
Section 2.01 Trust Indenture Act; Application .............................. 11
Section 2.02 Lists of Holders of Securities ................................ 12
Section 2.03 Reports by the Property Trustee ............................... 12
Section 2.04 Periodic Reports to Property Trustee .......................... 12
Section 2.05 Evidence of Compliance with Conditions Precedent .............. 13
Section 2.06 Events of Default; Waiver ..................................... 13
Section 2.07 Event of Default; Notice ...................................... 15
ARTICLE III
Organization
Section 3.01 Name .......................................................... 15
Section 3.02 Office ........................................................ 15
Section 3.03 Purpose ....................................................... 15
Section 3.04 Authority ..................................................... 16
Section 3.05 Title to Property of the Trust ................................ 16
Section 3.06 Powers and Duties of the Administrative Trustees .............. 16
Section 3.07 Prohibition of Actions by the Trust and the Trustees .......... 19
Section 3.08 Powers and Duties of the Property Trustee ..................... 20
Section 3.09 Certain Duties and Responsibilities of the Property Trustee ... 22
Section 3.10 Certain Rights of Property Trustee ............................ 24
Section 3.11 Delaware Trustee .............................................. 26
Section 3.12 Execution of Documents ........................................ 26
Section 3.13 Not Responsible for Recitals or Issuance of Securities ........ 26
Section 3.14 Duration of Trust ............................................. 26
Section 3.15 Mergers ....................................................... 27
ARTICLE IV
Depositor
Section 4.01 Depositor's Purchase of Common Securities ................... 28
Section 4.02 Responsibilities of the Depositor ........................... 29
Section 4.03 Guarantee of Payment of Trust Obligations ................... 29
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ARTICLE V
Trustees
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Section 5.01 Number of Trustees ............................................ 30
Section 5.02 Delaware Trustee .............................................. 30
Section 5.03 Property Trustee; Eligibility ................................. 31
Section 5.04 Qualifications of Administrative Trustees and Delaware
Trustee Generally ........................................... 31
Section 5.05 Initial Trustees .............................................. 31
Section 5.06 Appointment, Removal and Resignation of Trustees .............. 32
Section 5.07 Vacancies among Trustees ...................................... 35
Section 5.08 Effect of Vacancies ........................................... 35
Section 5.09 Meetings ...................................................... 35
Section 5.10 Delegation of Power ........................................... 36
Section 5.11 Merger, Conversion, Consolidation or Succession to Business ... 36
ARTICLE VI
Distributions
Section 6.01 Distributions ................................................. 37
ARTICLE VII
Issuance of Securities
Section 7.01 General Provisions Regarding Securities ....................... 37
Section 7.02 Execution and Authentication .................................. 38
Section 7.03 Form and Dating ............................................... 38
Section 7.04 Registrar, Paying Agent, Conversion Agent and Tender Agent .... 41
Section 7.05 Paying Agent to Hold Money in Trust ........................... 42
Section 7.06 Replacement Securities ........................................ 42
Section 7.07 Outstanding Preferred Securities .............................. 43
Section 7.08 Preferred Securities in Treasury .............................. 43
Section 7.09 Temporary Securities .......................................... 43
Section 7.10 Cancellation .................................................. 43
ARTICLE VIII
Termination of Trust
Section 8.01 Dissolution of Trust .......................................... 44
ARTICLE IX
Transfer and Exchange
Section 9.01 General ....................................................... 45
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Section 9.02 Transfer Procedures and Restrictions .......................... 46
Section 9.03 Deemed Security Holders ....................................... 50
Section 9.04 Notices to Depositary ......................................... 50
Section 9.05 Appointment of Successor Depositary ........................... 50
ARTICLE X
Limitation of Liability of Holders of Securities, Trustees or Others
Section 10.01 Liability .................................................... 51
Section 10.02 Exculpation .................................................. 51
Section 10.03 Fiduciary Duty ............................................... 51
Section 10.04 Indemnification .............................................. 52
Section 10.05 Outside Businesses ........................................... 53
ARTICLE XI
Accounting
Section 11.01 Fiscal Year .................................................. 54
Section 11.02 Certain Accounting Matters ................................... 54
Section 11.03 Banking ...................................................... 54
Section 11.04 Withholding .................................................. 55
ARTICLE XII
Amendments and Meetings
Section 12.01 Amendments ................................................... 55
Section 12.02 Meetings of the Holders of Securities; Action
by Written Consent ......................................... 56
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
Section 13.01 Representations and Warranties of Property Trustee ........... 57
Section 13.02 Representations and Warranties of Delaware Trustee ........... 58
ARTICLE XIV
Registration Rights
Section 14.01 Registration Rights .......................................... 59
ARTICLE XV
Miscellaneous
Section 15.01 Notices ...................................................... 59
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Section 15.02 Governing Law ................................................ 60
Section 15.03 Intention of the Parties ..................................... 61
Section 15.04 Headings ..................................................... 61
Section 15.05 Successors and Assigns ....................................... 61
Section 15.06 Partial Enforceability ....................................... 61
Section 15.07 Counterparts ................................................. 61
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CALPINE CAPITAL TRUST III
AUGUST 9, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated and
effective as of August 9, 2000, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Calpine
Corporation, a Delaware corporation, as trust Depositor (the "Depositor"), and
by the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (as defined below) issued pursuant to this Declaration;
WHEREAS, the Trustees and the Depositor established Calpine Capital Trust
III (the "Trust") under the Business Trust Act (as hereinafter defined) pursuant
to a Declaration of Trust dated as of June 28, 2000 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on June 28, 2000, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (as hereinafter defined);
WHEREAS, pursuant to a Removal and Appointment of Trustees of Calpine
Capital Trust III, dated as of July 19, 2000, the Depositor removed The Bank of
New York as Property Trustee (as defined below) and The Bank of New York
(Delaware) as Delaware Trustee (as defined below) and appointed Wilmington Trust
Company as the Trust's Property Trustee and Delaware Trustee;
WHEREAS, the Original Declaration was amended as of July 19, 2000 to
reflect the appointment of Wilmington Trust Company as the Trust's Property
Trustee and Delaware Trustee and the removal of The Bank of New York and The
Bank of New York (Delaware) as such trustees and to modify the powers of the
Administrative Trustees and the Depositor to effectuate a private placement of
the Preferred Securities (as defined below) pursuant to Rule 144A of the
Securities Act (as defined below), as opposed to a public offering of such
Preferred Securities;
WHEREAS, a Restated Certificate of Trust was filed with the Secretary of
State of the State of Delaware on July 19, 2000, executed by each Administrative
Trustee and Wilmington Trust Company as the Trust's Property Trustee and
Delaware Trustee;
WHEREAS, as of the date hereof, no interests of the Trust have been
issued;
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WHEREAS, all of the Trustees and the Depositor, by this Declaration, amend
and restate in its entirety each and every term and provision of the Original
Declaration, as amended on July 19, 2000; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
Interpretation and Definitions
Section 1.01 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
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(b) a term defined anywhere in this Declaration or the Indenture 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, Sections, Annexes and
Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;
(e) all accounting terns not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(f) 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
(g) a reference to the singular includes the plural and vice versa.
"Additional Amounts" has the meaning specified in the Indenture.
"Administrative Action" has the meaning set forth in the definition of
"Tax Event" in this Section 1.01.
"Administrative Trustee" means any Trustee other than the Property Trustee
and the Delaware Trustee.
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"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person: For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
coRegistrar.
Appointment Event" means an event defined in the terms of the Preferred
Securities, as set forth in Annex I, which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Trustee.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Beneficiaries" has the meaning set forth in Section 4.03(x).
"Book Entry Interest" means a beneficial interest in a Global Preferred
Securities Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Depositary as described in Section 9.02.
"Business Day" means any day other than a Saturday or a Sunday, a day on
which banking institutions in New York, New York are authorized or required by
law to close, or a day on which the corporate trust office of the Property
Trustee or the Debenture Trustee is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Change in 1940 Act Law" has the meaning specified in paragraph 4(d) of
Annex 1.
"Closing Date" means August 9, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(a).
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"Common Securities Guarantee" means the guarantee agreement to be dated as
of August 9, 2000 of the Depositor in respect of the Common Securities.
"Common Stock" has the meaning specified in the Indenture.
"Compounded Interest" has the meaning specified in the Indenture.
"Conversion Agent" has the meaning set forth in Section 7.04.
"Conversion Date" has the meaning specified in paragraph 5(b) of Annex I.
"Conversion Request" has the meaning specified in paragraph 5(b) of Annex
I.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"Debenture Issuer" means the Depositor in its capacity as issuer of the
Debentures.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture and to be held by the Property Trustee, substantially
in the form attached to the Indenture as Exhibit A.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Declaration" means this Amended and Restated Declaration of Trust as
originally executed or as it may from time to time be supplemented or amended.
"Declaration Trustees" means collectively, the Administrative Trustees,
the Property Trustee and the Delaware Trustee.
"Deferral Period" has the meaning specified in paragraph 2(b) of Annex I.
"Definitive Preferred Securities" means any Preferred Securities in
definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 5.02.
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"Depositary" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.05, and
thereafter means such successor Depositary.
"Depositor" means Calpine Corporation, a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, or any entity to
which a conveyance, transfer or lease of the properties and assets of Calpine
Corporation substantially as an entirety (other than a wholly owned Subsidiary
of the Depositor) is made, in its capacity as Depositor of the Trust.
"Direct Action" has the meaning specified in Section 3.08(e).
"Disclosure Documents" has the meaning specified in the Remarketing
Agreement.
"Dissolution Tax Opinion" has the meaning specified in the definition of
Tax Event in this Section 1.01.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"Event of Default" means:
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days (subject to the deferral of any due date in the case of a Deferral
Period); or
(iii) default by the Trust in the payment of any Redemption Price of
any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in the Declaration (other than
a covenant or warranty, a default in the performance of which or the
breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting
Declaration Trustee or Declaration Trustees by the holders of at least 25%
in aggregate liquidation amount of the outstanding Preferred Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under the
Declaration; or
(v) the failure of the Depositor to appoint a successor Property
Trustee in the manner required by Section 5.06.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation, and the rules and regulations
promulgated thereunder.
"Failed Final Remarketing" has the meaning specified in the Remarketing
Agreement.
"Fiscal Year" shall have the meaning specified in Section 11.01.
"Global Preferred Securities" means Rule 144A Global Preferred Securities
and/or Unrestricted Global Preferred Securities, as the context requires.
"Holder" means a Person in whose names Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture, dated as of August 9, 2000, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.
"Initial Conversion Price" has the meaning specified in paragraph 5(a) of
Annex I.
"Initial Rate" has the meaning specified in paragraph 2(a) of Annex I.
"Initial Redemption Price" has the meaning specified in the Indenture.
"Investment Company" means an investment company as defined in the
Investment Company Act, and the rules and regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning specified in paragraph 4(d) of
Annex I.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Like Amount" means (i) with respect to a redemption of Securities,
Securities having an aggregate liquidation amount equal to that portion of the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to such Securities based upon the relative
liquidation amounts of such classes and the proceeds of which will be used to
pay the applicable Redemption Price of such Securities and (ii) with respect to
a distribution of Debentures to Holders of the Securities in connection with a
dissolution and liquidation of the Trust, Debentures
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having a principal amount equal to the aggregate liquidation amount of the
Securities of the Holder to whom such Debentures are distributed.
"Liquidation Distribution" has the meaning specified in paragraph 3 of
Annex I.
"List of Holders" has the meaning set forth in Section 2.02(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Securities and by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in paragraph 4(d) in Annex
I.
"No Recognition Opinion" has the meaning specified in paragraph 4(d) of
Annex I.
"Obligations" means any costs, expenses or liabilities of the Trust, other
than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terns of the Securities or such other similar interests, as the case may be.
"Offering Circular" means the confidential offering circular, dated August
3, 2000, relating to the issuance by the Trust of Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration (other than pursuant to Section 2.04) shall include:
(a) a statement that each 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 by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such offices opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with
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"OID" means original issue discount.
"Optional Closing Date" has the meaning assigned to such term in the
Purchase Agreement.
"Optional Redemption" has the meaning specified in the Indenture.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 7.04.
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.01(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of August 9, 2000, between the Depositor and Wilmington Trust Company, as
Guarantee Trustee, in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Participant or as an
indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in Section 3.08(c).
"Pro Rata" has the meaning specified in paragraph 9 of Annex I.
"Purchase Agreement" has the meaning set forth in Section 7.03.
"QIBs" has the meaning set forth in Section 7.03(a).
"Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.
"Redemption Price" has the meaning specified in the Indenture.
"Redemption Tax Opinion" has the meaning specified in paragraph 4(d) of
Annex I.
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"Registrar" has the meaning set forth in Section 7.04.
"Registration Default" has the meaning specified in the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated August 9, 2000, among the Depositor, the Trust and the initial Purchasers
named in the Purchase Agreement.
"Related Party" means, with respect to the Depositor, any direct or
indirect wholly owned subsidiary of the Depositor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Depositor.
"Remarketing" has the meaning specified in the Remarketing Agreement.
"Remarketing Agent" has the meaning specified in the Indenture.
"Remarketing Agreement" means the Remarketing Agreement, dated August 9,
2000 among the Depositor, the Trust, the Tender Agent and the Remarketing Agent.
"Responsible Officer" means, with respect to the Property Trustee, any
vice president, any assistant vice president, the treasurer, any assistant
treasurer, any trust' officer or assistant trust officer or any other officer in
the Corporate Trust Administration Department of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Preferred Securities" shall mean the Rule 144A Global
Preferred Securities.
"Restricted Securities Legend" has the meaning specified in Section
9.02(h).
"Rule 144A" has the meaning specified in Section 7.03(a).
"Rule 144A Global Preferred Security" has the meaning specified in Section
7.03(a).
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation, and the rules and regulations promulgated
thereunder.
"Securities Guarantee" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
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"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Trustee" means a trustee appointed by the Holders of a Majority
in liquidation amount of the Preferred Securities in accordance with Section
5.06(ii)(B).
"Successor Delaware Trustee" has the meaning set forth in Section 5.06(c).
"Successor Entity" has the meaning specified in Section 3.15(b)
"Successor Property Trustee" has the meaning set forth in Section 5.06(a).
"Successor Securities" has the meaning specified in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.06(a)(ii).
"Tax Event" means the receipt by the Property Trustee of an opinion of
nationally recognized independent tax counsel to the Depositor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by arty legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (x) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (y) any portion of interest payable by
the Depositor to the Trust (or OID accruing) on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes or (b) with
respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Depositor (or GOD accruing) on the Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Depositor in whole or in part for United States federal income tax purposes.
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"Tender Agent" means the Property Trustee if any Preferred Securities are
outstanding and the Debenture Trustee if the Debentures have been distributed to
the Holders of the Preferred Securities.
"Tender Notification Date" has the meaning specified in the Indenture.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Securities or by the Trust Indenture Act, Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, representing 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Term Provisions" has the meaning specified in the Remarketing Agreement.
"Term Call Protections" has the meaning specified in the Remarketing
Agreement.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning specified in the first recital of this Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation, and the rules and regulations
promulgated thereunder.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Unrestricted Global Preferred Security" has the meaning set forth in
Section 9.02(b).
ARTICLE II
Trust Indenture Act
Section 2.01 Trust Indenture Act: Application. (a) This Declaration is, or
will be upon qualification under the Trust Indenture Act, subject to the
provisions of
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the Trust Indenture Act that are required to be part of this Declaration, which
are incorporated by reference in and made part of this Declaration and shall, to
the extent applicable, be governed by such provisions. This Declaration will not
be qualified under the Trust Indenture Act except upon the effectiveness of the
Shelf Registration Statement.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(c) Until such time as this Declaration is qualified under the Trust
Indenture Act, the parties hereto agree that the provisions of Section 310 to
317, inclusive, of the Trust Indenture Act shall be incorporated herein by
reference, subject to the provisions of this Declaration, and to the extent that
any provision of this Declaration limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
(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 2.02 Lists of Holders of Securities. (a) Each of the Depositor and
the Administrative Trustees on behalf of the Trust shall provide the Property
Trustee (i) within 14 days after each record date for payment of Distributions,
a list, in such form as the Property Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of Holders") as of
such record date, provided that neither the Depositor nor the Administrative
Trustees on behalf of the Trust shall be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Depositor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in its capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.03 Reports by the Property Trustee. Within 60 days after March
15 of each year, commencing March 15, 2001, the Property Trustee shall provide
to the Holders of the Preferred Securities such reports as are required by
Section 3 13(a) of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act.
Section 2.04 Periodic Reports to Property Trustee. Each of the Depositor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) and the compliance certificate required
by Section 314(a)(4) of the Trust
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Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act, such compliance certificate to be delivered
annually on or before 120 days after the end of each fiscal year of the
Depositor.
Section 2.05 Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
Section 2.06 Events of Default: Waiver. (a) The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the
Event of Default:
(i) is caused by a Debenture Event of Default that is not waivable
under the Indenture, the Event of Default under the Declaration shall also
not be waivable;
(ii) is caused by a Debenture Event of Default that requires the
consent or vote of greater than a majority in principal amount of the
holders of the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding;
(iii) is the result of a default by the Trust in the payment of any
Distribution when it becomes due and payable, which default has continued
for 30 days (subject to the deferral of any due date in the case of a
Deferral Period), the Event of Default shall not be waivable; or
(iv) is the result of a default by the Trust in the payment of any
Redemption Price of any Preferred Security when it becomes due and
payable, the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an Event of Default
with respect to the Preferred Securities or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such
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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 Event of Default is
caused by a Debenture Event of Default that:
(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 2.06(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 2.06(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until the effects of all Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only the Holders
of the Preferred Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(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 2.06(c) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
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Section 2.07 Event of Default: Notice. (a) The Property Trustee shall,
within twenty Business Days after the occurrence of an Event of Default actually
known to the Property Trustee, (i) transmit by mail, first class postage
prepaid, to the Holders of the Securities, and (ii) transmit by any means
provided for in this Declaration to the Administrative Trustees and the
Depositor, notices of all defaults actually known to the Property Trustee,
unless such defaults have been cured or waived before the giving of such notice
(the term "defaults" for the purposes of this Section 2.07(a) being hereby
defined to be an Event of Default, not including any periods of grace and
irrespective of the giving of any notice); provided that, except for a default
in the payment of principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment established for the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Property Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice from the Depositor, any Holder or any other
Trustee.
ARTICLE III
Organization
Section 3.01 Name. The Trust is named "Calpine Capital Trust III," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
Section 3.02 Office. The address of the principal office of the Trust is
c/o Calpine Corporation, 50 West San Fernando Street, San Jose, California
95113, Attention: General Counsel. On ten Business Days' written notice to the
Holders of securities, the Administrative Trustees may designate another
principal office.
Section 3.03 Purpose. The exclusive purposes and functions of the Trust
are (a) to issue and sell the Securities and use the proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
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Section 3.04 Authority. (a) Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry
out the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no Person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) An Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.06.
Section 3.05 Title to Property of the Trust. Except as provided in
Section 3.08 with respect to the Debentures and the Property Trustee Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
Section 3.06 Powers and Duties of the Administrative Trustees. The
Administrative Trustees shall have, together (except in the case of paragraphs
(a), (b) and (c) of this Section 3.06) with any Special Trustee holding office
pursuant to Section 5.06, if any, the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(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 issuance of Securities shall be limited
to simultaneous issuances of both Preferred Securities and Common Securities on
the Closing Date and any Optional Closing Dates
(b) in connection with the issue and sale of the Preferred Securities to:
(i) assist in the preparation of the Offering Circular and
preliminary offering circular, if any, in each case prepared by the
Depositor, in relation to the offering and sale of the Preferred
Securities to qualified institutional buyers in reliance of Rule 144A
under the Securities Act and to execute and file with the Commission, at
such time as deter-
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mined by the Depositor (whether in accordance with the Registration Rights
Agreement or otherwise), a registration statement on Form S-3, or other form as
applicable, prepared by the Depositor, including any amendments thereto in
relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Depositor, or
take any acts as determined by the Depositor to be necessary in order to
qualify or register all or part of the Preferred Securities in any State
or foreign jurisdiction in which the Depositor has determined to qualify
or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Depositor, to
the Private Offerings, Resale and Trading through Automated Linkages
("PORTAL") Market and, at such time as determined by the Depositor
(whether pursuant to the Registration Rights Agreement or otherwise), to
the New York Stock Exchange, Inc. or any other national stock exchange or
the NASDAQ National Market for listing or quotation of the Preferred
Securities, but if and only if the Depositor has so instructed the
Administrative Trustees to make such filing;
(iv) to execute and deliver letters, documents, or instruments with
The Depository Trust Company relating the Preferred Securities;
(v) execute and file with the Commission a registration statement on
Form 8-A, at such time as determined by the Depositor, including any
amendments thereto, prepared by the Depositor relating to the registration
of the Preferred Securities under Section 12 of the Exchange Act, but if
and only if the Depositor has so instructed the Administrative Trustees to
make such filing; and
(vi) execute and enter into the Remarketing Agreement, the
Registration Rights Agreement and the Purchase Agreement and other related
agreements providing for the sale of the Preferred Securities; and
(vii) and to execute and file any agreement, certificate or other
document which such Administrative Trustee deems necessary or appropriate
in connection with the issuance and sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustee: 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 Depositor and the Property Trustee prompt written notice
of the occurrence of a Tax Event or an Investment Company Event; provided that
the Administrative Trustees (and Special Trustee, if any) shall consult with the
Depositor
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before taking or refraining from taking any Ministerial Action in relation to a
Tax Event or Investment Company 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 Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Administrative 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
("Action"), unless pursuant to Section 3.08(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 Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative trustee;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(1) to act as, or appoint another Person to act as, Registrar, Conversion
Agent, Paying Agent, Tender Agent 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;
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(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.06, including, but not limited to:
(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 not as an association taxable
as a corporation or partnership; 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 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 Administrative Trustees, on behalf of the
Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section
3.08.
Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.
The Administrative Trustees shall take all action on behalf of the Trust
that are not specifically required by this Declaration to be taken by any other
Trustee.
Section 3.07 Prohibition of Actions by the Trust and the Trustees. (a) The
Trust shall not, and the Trustees (including the Property Trustee) on behalf of
the Trust shall not engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
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(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 the Declaration or Annex I hereto,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under Section 5.13 of the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless, in the case
of each action described in clause (A), (B), (C) or (D), the Trust shall
have received an opinion of a nationally recognized independent counsel
experienced in such matters to the effect that such modification will not
cause more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a grantor trust.
Section 3.08 Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders of the Securities. The
right, title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.06. To the fullest extent permitted by law, such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debt to the Administrative 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
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funds into the Property Trustee Account and make payments to the Holders of the
Preferred Securities and Holders of the Common Securities from the Property
Trustee Account in accordance with Section 6.01. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration.
(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
Administrative Trustees in accordance with the terms of the Securities, engage
in such ministerial activities as so directed as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities.
(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 may take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act; provided,
however, that if a Debenture Event of Default has occurred and is continuing and
such event is attributable to the failure of the Depositor as issuer of the
Debentures to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may institute a legal
proceeding directly, subject to the terms of the Indenture (including the
subordination provisions set forth in Article XII thereof), for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action") on or after the respective due
date specified or provided for in the Securities. In connection with such Direct
Action, the Holders of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made by the
Depositor to such Holder of Preferred Securities in such Direct Action. In
addition, if the Property Trustee fails to enforce its rights under the
Debentures (other than rights arising from an Event of Default described in the
immediately preceding sentence) after any Holder of Preferred Securities shall
have made a written request to the property trustee to enforce such rights, such
Holder of Preferred Securities may, to the fullest extent permitted by law,
institute a direct action to enforce the rights of the Trustee or any other
Person. Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
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(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 5.06.
(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 occurs and is continuing, the Property Trustee may,
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 the
Securities and this Declaration.
(h) The Property Trustee shall act as the initial Paying Agent and
Registrar to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent
may be removed by the Administrative Trustees at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the
Administrative Trustees. The Paying Agent may resign upon 30 days' written
notice to the Property Trustee, the Administrative Trustees and the Depositor.
(i) Subject to this Section 3.08, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
The Property Trustee trust exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.03.
Section 3.09 Certain Duties and Responsibilities of the Proper
Trustee. (a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(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:
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(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Property Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and
in the Securities, and no implied covenants or obligations shall
be read into this Declaration or the Securities against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Property Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration (but need not
confirm or investigate the accuracy of mathematical calculations
or other facts stated therein);
(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;
(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
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the Debentures or the payment of any taxes or assessments levied thereon
or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.08(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Depositor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
Section 3.10 Certain Rights of Property Trustee. (a) Subject to the
provisions of Section 3.09:
(i) the Property Trustee may rely conclusively and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Depositor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice
or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such experts'
area of expertise shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion, such
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counsel may be counsel to the Depositor or the Property Trustee 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 security or indemnity satisfactory to
the Property Trustee, against the costs, expenses (including its
attorneys' fees and expenses) and liabilities that might be incurred by
it in complying with such request or direction, including such reasonable
advances as may be requested in writing by the Property Trustee, provided
that, nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it by this
Declaration and use the same degree of care and skill in the exercise
thereof as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be
required to inquire as to the authority of the property trustee to so act
or as to its compliance with any of the terms and provisions of this
declaration both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be
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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 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 5.02, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Administrative Trustees or the Property
Trustee (except as required by the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.02, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
Section 3.12 Execution of Documents. Except as otherwise required by
applicable law, any Administrative Trustee is authorized to execute on behalf of
the Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.06; provided that, the registration
statement referred to in Section 3.06(b)(i), including any amendments thereto,
shall be signed by a majority of the Administrative Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of Securities. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Depositor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.
Section 3.14 Duration of Trust. The Trust, unless dissolved pursuant to
the provisions of Article VIII hereof, shall exist until August 10, 2035.
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Section 3.15 Mergers. (a) The Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c) of this Declaration or paragraph 3 of Annex
I.
(b) The Trust may, with the consent of a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State or the District of Columbia; provided that:
(i) if the Trust is not the surviving entity, the 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") as long as the Successor
Securities rank, with respect to participation in the profits and
Distributions or in the assets of the Successor Entity at least as
high as the Preferred Securities rank with respect to
participation in the profits and dividends or in the assets of the
Trust;
(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) to the extent the Preferred Securities are listed on any
national securities exchange or with another organization for listing or
quotation, the Preferred Securities or any Successor Securities shall be
so listed, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the powers, preferences and other special
rights of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially identical
and limited to that of the Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Depositor has received an opinion of a nationally
recognized independent counsel (reasonably acceptable to the Property
Trustee) to the Trust experienced in such matters to the effect that:
(A) following such merger, consolidation, amalgamation
or replacement, the Trust or the Successor Entity will continue to
be treated as a grantor trust for United States federal income tax
purposes;
(B) following such merger, consolidation, amalgamation
or replacement, neither the Depositor nor the Successor Entity
will be required to register as an Investment Company;
(C) such merger, consolidation, amalgamation or
replacement will not adversely affect the limited liability of the
Holders of the Securities (including any Successor Securities);
(viii) the Depositor or any permitted successor or assignee
directly or indirectly owns all the common securities of such successor
entity and provides a guarantee to the Holders of the Successor
Securities with respect to the Successor Entity having substantially the
same terns as the Preferred Securities Guarantee; and
(ix) such merger, consolidation, amalgamation, replacement or
lease is not a taxable event for the Holders of the Preferred Securities.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
Depositor
Section 4.01 Depositor's Purchase of Common Securities. On the Closing
Date and any Optional Closing Date the Depositor will purchase an amount of
Common Securities issued by the Trust such that the aggregate liquidation amount
of such Common Securities purchased by the Depositor shall at such date equal at
least 3% of the total capital of the Trust.
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Section 4.02 Responsibilities of the Depositor. In connection with the
issue and sale of the Preferred Securities, the Depositor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to prepare the Offering Circular and to prepare for filing by the
Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;
(b) to determine the States and foreign jurisdictions, if any, in
which to take appropriate action to qualify or register for sale all or part of
the Preferred Securities and to do any and all such acts (including at the time
of the Remarketing), other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any such
States and foreign jurisdictions;
(c) if so determined by the Depositor, to prepare for filing by the
Trust an application to PORTAL, the New York Stock Exchange or any other
national stock exchange or the NASDAQ National Market for listing or quotation
of the Preferred Securities (including at the time of the Remarketing); .
(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 (both at the time of their original issuance and at the time of the
Remarketing, if required) under Section 12 of the Exchange Act, including any
amendments thereto, if the Depositor in its sole discretion determines such a
filing is necessary or appropriate; and
(e) to negotiate the terms of the Purchase Agreement, the Registration
Rights Agreement and the Remarketing Agreement and other related agreements
providing for the sale of the Preferred Securities (both at the time of their
original issuance and at the time of the Remarketing).
Section 4.03 Guarantee of Payment of Trust Obligations.
(a) Subject to the terms and conditions of this Section 4.03, the
Depositor hereby irrevocably and unconditionally guarantees, to the extent set
forth in the Securities Guarantees and subject to the terms of the Indenture
(including the subordination provisions set forth in Article XII thereof), to
each Person to whom the Trust is now or hereafter becomes indebted or liable
(the "Beneficiaries") the full payment, when and as due, of any and all
obligations to such Beneficiaries.
(b) The agreement of the Depositor in Section 4.03(a) is intended to
be for the benefit of, and to be enforceable by, all such Beneficiaries, whether
or not such beneficiaries have received notice hereof.
(c) The agreement of the Depositor set forth in Section 4.03(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all Holders of all
the Preferred Securities (whether upon redemption, liquidation, exchange or
otherwise) and (b) the date
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on which there are no Beneficiaries remaining; provided, however, that such
agreement shall continue to be effective or shall be reinstated, as the case may
be, if at any time any Holder of Preferred Securities or any Beneficiary must
restore payment of any sums paid under the Preferred Securities, under any
Obligation, under the Preferred Securities Guarantee or under this Agreement for
any reason whatsoever. Such agreement is continuing, irrevocable, unconditional
and absolute.
ARTICLE V
Trustees
Section 5.01 Number of Trustees. The number of Trustees shall initially
be five (5), consisting of three (3) Administrative Trustees, the Delaware
Trustee and the Property Trustee, and:
(a) at any time before the issuance of any Securities, the Depositor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities:
(i) the number of Trustees may be increased or decreased,
except as provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with
respect to the Special Trustee, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; provided, however, that,
the number of Trustees shall in no event be less than two (2); provided,
further, that (1) one Trustee, in the case of a natural person, shall be
a person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in
the State of Delaware; (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Depositor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property
Trustee for so long as this Declaration is required to qualify as an
indenture under the Trust Indenture Act, and such Trustee may also serve
as Delaware Trustee if it meets the applicable requirements.
(ii) the number of Trustees shall be increased automatically by
one (1) if an Appointment Event has occurred and is continuing and the
Holders of a Majority in liquidation amount of the Preferred securities
appoint a Special Trustee in accordance with Section 5.06(a)(ii).
Section 5.02 Delaware Trustee. If required by the Business Trust Act, one
Trustee (the "Delaware Trustee") shall be (a) a natural person who is a resident
of the State of Delaware; or (b) if not a natural person, an entity which has
its principal place of business in the State of Delaware, and otherwise meets
the requirements of applicable law, provided that, if the Property Trustee has
its principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property
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Trustee shall also be the Delaware Trustee and Section 3.11 shall have no
application. The initial Delaware Trustee shall be Wilmington Trust Company.
Section 5.03 Prone 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 Depositor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S.
dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.03(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.06(e).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be Wilmington Trust Company.
Section 5.04 Qualifications of Administrative Trustees and Delaware
Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
Section 5.05 Initial Trustees. The initial Administrative Trustees shall
be:
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Peter Cartwright
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Ann B. Curtis
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Thomas R. Mason
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Square
Wilmington, DE 19890
Attention: Corporate Trust Department
The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Section 5.06 Appointment, Removal and Resignation of Trustees. (a) Except
as provided otherwise in this Section 5.06, Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Depositor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special Trustee, by vote
of the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the
Common Securities, unless a Debenture Event of Default shall have
occurred and be continuing, in which event the Property Trustee
and the Delaware Trustee may only be removed by the Holders of a
Majority in liquidation amount of the Preferred Securities, voting
as a class at a meeting of the Holders of the Preferred
Securities; and
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(B) if an Appointment Event has occurred and is
continuing, one (1) additional trustee (the "Special Trustee"),
who shall have the same rights, powers and privileges as an
Administrative Trustee, may be appointed by vote of the Holders of
a Majority in liquidation amount of the Preferred Securities,
voting as a class at a meeting of the Holders of the Preferred
Securities, and such Special Trustee may only be removed
(otherwise than by the operation of Section 5.06(e)), by vote of
the Holders of a Majority in liquidation amount of the Preferred
Securities voting as a class at a meeting of the Holders of the
Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.06 until a successor Property Trustee meeting the
requirements of Section 5.03 (a "Successor Property Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees and the
Depositor.
(c) The Depositor shall remove the Property Trustee by written
instrument upon:
(i) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Property Trustee as bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Property Trustee under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Property Trustee or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(ii) the institution by the Property Trustee of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, Sequestrator (or other similar official) of the
Property Trustee or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the
taking of corporate action by the Property Trustee in furtherance of any
such action.
The Depositor shall appoint a Successor Property Trustee within 60 days of such
an event.
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(d) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.06(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Trustees and the Depositor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Depositor and the Trust,
which resignation shall take effect upon such delivery or upon such later date
as is specified therein; provided, however, that:
(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
Depositor 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 Depositor and the resigning Delaware Trustee; and
(iii) no such resignation of a Special Trustee shall be effective
until the 60th day following delivery of the instrument of resignation of
the Special Trustee to the Depositor and the Trust or such later date
specified in such instrument during which period the Holders of the
Preferred Securities shall have the right to appoint a successor Special
Trustee as provided in this section 5.06.
(f) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.06 or is removed
pursuant to this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.06
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within 60 days after delivery to the Depositor and the Trust of an instrument of
resignation or removal, the resigning Property Trustee or Delaware Trustee,
resigning or being removed as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(h) 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 5.07 Vacancies among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
5.01, or if the number of Trustees is increased pursuant to Section 5.01, a
vacancy shall occur. A resolution certifying the existence of such vacancy by a
majority of the Administrative Trustees shall be conclusive evidence of the
existence of such vacancy. The vacancy shall be filled with a Trustee appointed
in accordance with Section 5.06.
Section 5.08 Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of a Administrative
Trustee in accordance with Section 5.06, the Administrative Trustees in office,
regardless of their number, shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Declaration.
Section 5.09 Meetings. Meetings of the Administrative Trustees shall be
held from time to time upon the call of any Administrative Trustee. Regular
meetings of the Administrative Trustees may be held at a time and place fixed by
resolution of the Administrative Trustees. Notice of any meetings of the
Administrative Trustees shall be hand delivered or otherwise delivered in
writing (including by facsimile or overnight courier) not less than 24 hours
before such meeting. Notices shall contain a brief statement of the time, place
and anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
and without prior notice by the unanimous written consent of the Administrative
Trustees.
In the event there is only one Administrative Trustee, any and all action
of such Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee. In the event a Special Trustee is holding office
pursuant to Section 5.06, such Special Trustee shall have the same rights as an
Administrative Trustee with respect to notice and participation in a meeting of
the Administrative Trustees.
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Section 5.10 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.06, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 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
other than as required by applicable law.
Section 5.12 Compensation and Expenses. The Depositor agrees:
(a) to pay the Property Trustee and the Delaware Trustee from time to
time such compensation as shall be agreed in writing between the Depositor and
the Property Trustee and the Delaware Trustee, respectively, for all services
rendered by them hereunder (which compensation shall not be limited by any
provision of any law in regard to the compensation of a trustee of an express
trust); and
(b) to reimburse the Property Trustee and the Delaware Trustee upon
their request for expenses, disbursements and advances incurred or made by the
Property Trustee or the Delaware Trustee, respectively, in accordance with any
provision of this Declaration (including the reasonable compensation and the
expenses and advances of their agents and counsel and other professionals),
except any such expense or advance as may be attributable to their negligence or
wilfull misconduct.
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ARTICLE VI
Distributions
Section 6.01 Distributions. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in the terms attached as
Annex I hereto. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Amounts (as defined in the Indenture)), premium and principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
Issuance of Securities
Section 7.01 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust issue one
class of convertible preferred securities, designated as Remarketable Term
Income Deferrable Equity Securities (HIGH TIDES)(SM), liquidation amount $50 per
HIGH TIDES, representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), having such terms as are set forth in Annex
I (including as such terms may be modified in accordance with the provisions of
the Remarketing Agreement) and one class of convertible common securities,
liquidation amount $50, representing undivided beneficial interests in the
assets of the Trust (the "Common Securities"), having such terms as are set
forth in Annex I. On the Reset Date and as contemplated by the Remarketing
Agreement, the Trust may also issue securities having Term Provisions to be set
by the Remarketing Agent in accordance with the terms of the Remarketing
Agreement. The Trust shall have no securities or other interests in the assets
of the Trust other than the Preferred Securities and the Common Securities. The
Trust shall issue no Securities in bearer form.
(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.
(e) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.01 with respect to the Common Securities.
(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.
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(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have covenanted to treat the Debentures as indebtedness and
the Securities as evidence of an indirect beneficial ownership interest in the
Debentures.
Section 7.02 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by one
Administrative Trustee. In case any Administrative Trustee who shall have signed
any of the Securities shall cease to be such Administrative Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Administrative Trustee; and any Securities may be
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees, although at
the date of the execution and delivery of the Declaration any such person was
not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred Securities for
the Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Property Trustee. The signature shall
be conclusive evidence that the Preferred Security has been authenticated under
this Declaration.
Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Sections 7.06 and 7.07.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Depositor or an Affiliate.
The Property Trustee shall have the right to decline to authenticate and
deliver any Preferred Securities under this Section if the Trustee, being
advised by counsel, determines that such action may not lawfully be taken or if
the Trustee in good faith shall determine that such action would expose the
Trustee to personal liability to existing Holders.
Section 7.03 Form and Dating. The Preferred Securities and the Property
Trustee's certificate of authentication shall be substantially in the form of
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Exhibit A-l and the Common Securities shall be substantially in the form of
Exhibit A-2, each of which is hereby incorporated in and expressly made a part
of this Declaration. Certificates may be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by their execution thereof. The Securities
may have letters, numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Depositor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Depositor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the Trust pursuant
to a Purchase Agreement relating to the Preferred Securities, dated August 3,
2000, among the Trust, the Depositor and the Purchasers named therein (the
"Purchase Agreement").
(a) Global Securities. Preferred Securities offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act("Rule 144A") as provided in the Purchase Agreement, shall be
initially issued in the form of one or more permanent global Securities in
definitive, fully registered form without distribution coupons with the
appropriate global legends and Restricted Securities Legend set forth in Exhibit
A-1 hereto (each, a "Rule 144A Global Preferred Security"), which shall be
deposited on behalf of the purchasers of the Preferred Securities represented
thereby with the Property Trustee, at either its Delaware or New York office, as
custodian for the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Trust and authenticated by the
Property Trustee as provided herein. The number of Preferred Securities
represented by the Rule 144A Global Preferred Security may from time to time be
increased or decreased by adjustments made on the records of the Property
Trustee and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.03(b) shall apply only to
the Rule 144A Global Preferred Securities and such other Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Depositary.
An Administrative Trustee on behalf of the Trust shall execute and the
Property Trustee shall, in accordance with Section 7.02, authenticate and
deliver initially one or more Rule 144A Global Preferred Securities that (a)
shall be registered in the name of Cede & Co. or other nominee of the Depositary
and (b) shall be delivered by the Property Trustee to the Depositary or pursuant
to the Depositary's written instructions or held by the Property Trustee as
custodian for the Depositary.
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Unless and until definitive, fully registered certificated Preferred
Securities have been issued to the Preferred Security Beneficial Owners pursuant
to Section 7.03:
(i) the provisions of this Section 7.03 shall be in full force
and effect;
(ii) the Trust, the Trustees, the Registrar and the Paying Agent
shall be entitled to deal with the Depositary for all purposes of this
Declaration (including the payment of Distributions on the Global
Preferred Security and receiving approvals, votes or consents hereunder)
as the Holder of the Preferred Securities and the sole holder of the
Global Preferred Security and shall have no obligation to the Preferred
Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 7.03
conflict with any other provisions of this Declaration, the provisions of
this Section 7.03 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Depositary and/or the Participants and the
Depositary shall receive and transmit payments of Distributions on the
Global Preferred Securities to such Participants. The Depositary will
make book-entry transfers among the Participants and receive and transmit
payments of Distributions on the Global Preferred Securities to such
Participants; provided that solely for the purposes of determining
whether the Holders of the requisite amount of Preferred Securities have
voted on any matter provided for in this Declaration, so long as
Definitive Preferred Security Certificates have not been issued, the
Trustees may conclusively rely on, and shall be protected in relying on,
any written instrument (including a proxy) delivered to the Trustees by
the Depositary setting forth the Preferred Security Beneficial Owners'
votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.
Members of, or participants in, the Depositary ("participants") shall
have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Depositary or by the Property Trustee as
the custodian of the Depositary or under such Global Preferred Security, and
the Depositary may be treated by the Trust, the Property Trustee and any agent
of the Trust or the Property Trustee as the absolute owner of such Global
Preferred Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Trust, the Property Trustee or any agent of the
Trust or the Property Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Participants, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Preferred Security.
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(c) Certificated Securities. Except as provided in Section 7.03(d),
owners of beneficial interests in the Global Preferred Security will not be
entitled to receive physical delivery of certificated Preferred Securities.
(d) Subject to Section 9.05, a Global Preferred Security deposited
with the Depositary or with the Property Trustee as custodian for the Depositary
pursuant to this Section 7.03 shall be transferred to the beneficial owners
thereof in the form of certificated Preferred Securities only if such transfer
complies with Section 9.02 and (i) the Depositary notifies the Depositor that it
is unwilling or unable to continue as Depositary for such Global Preferred
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act, at a time when the Depositary is required to
be so registered to act as such depositary and the Administrative Trustees do
not appoint a successor qualified Depositary within 60 days after the
Depositor's receipt of such notice or the Depositor's becoming aware of such
cessation, (ii) the Administrative Trustees decide in their sole discretion that
such Global Preferred Security shall be so exchangeable, or (iii) an Event of
Default has occurred and is continuing.
(e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation
amount of Preferred Securities of authorized denominations in the form of
certificated Preferred Securities. Any portion of a Global Preferred Security
transferred pursuant to this Section shall be registered in such names and such
amounts as the Depositary shall direct. Any Preferred Security in the form of
certificated Preferred Securities delivered in exchange for an interest in the
Rule 144A Global Preferred Security shall, except as otherwise provided by
Section 9.02, bear the Restricted Securities Legend set forth in Section
9.02(h).
(f) Subject to the provisions of Section 7.03(e), the registered
holder of a Global Preferred Security may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interests through
Participants, to take any action which a holder is entitled to take under this
Declaration or the Securities.
(g) In the event of the occurrence of any of the events specified in
Section 7.03(d), the Trust will promptly make available to the Property Trustee
a reasonable supply of certificated Securities in definitive, fully registered
form without DISTRIBUTION COUPONS.
Section 7.04 Registrar, Paying Agent, Conversion Agent and Tender Agent.
The Administrative Trustees shall maintain in the Borough of Manhattan, City of
New York, State of New York (i) an office or agency where Preferred Securities
may be presented for registration of transfer or for exchange ("Registrar"),
(ii) an office or agency where Preferred Securities may be presented for payment
("Paying Agent") and (iii) an office or agency where Securities may be presented
for conversion ("Conversion Agent"). The Registrar shall keep a register of the
Preferred Securities and of their transfer and exchange. The Administrative
Trustees may appoint the Registrar, the Paying Agent and
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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 Administrative Trustees may change any Paying Agent,
Registrar, co-Registrar or Conversion Agent without prior notice to any Holder;
provided that the Administrative Trustees shall provide notice of such change to
all Holders promptly thereafter. The Administrative Trustees shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Administrative Trustees fail to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Property Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar, or Conversion Agent. The Trust shall act as Paying Agent, Registrar,
co-Registrar, and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities. The Property Trustee
shall also serve as Tender Agent and shall have the responsibilities of such
described in the Remarketing Agreement for so long as the Debentures are held by
the Property Trustee.
Section 7.05 Paying Agent to Hold Money in Trust. The Trust shall require
each Paying Agent other than the Property Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Property
Trustee all money held by the Paying Agent for the payment of principal or
distribution on the Securities, and will notify the Property Trustee if there
are insufficient funds. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to the Property
Trustee. The Administrative Trustees at any time may require a Paying Agent to
pay all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Depositor or an Affiliate of the
Trust or the Depositor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
Section 7.06 Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Trust or in the case of the
Preferred Securities to the Property Trustee, an Administrative Trustee on
behalf of the Trust shall issue and the Property Trustee, in the case of
Preferred Securities, shall authenticate a replacement Security if the Property
Trustee's and such Administrative Trustee's requirements, as the case may be,
are met. If required by the Property Trustee or such Administrative Trustee, an
indemnity bond must be provided by the Holder which must be sufficient in the
judgment of both to protect the Trustees, the Depositor or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Depositor may charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Depositor in its discretion may,
instead of the Trust's issuing a new Security, pay or purchase such Security, as
the case may be.
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Section 7.07 Outstanding Preferred Securities. The Preferred Securities
outstanding at any time are all the Preferred Securities authenticated by the
Property Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
If a Preferred Security is replaced or paid pursuant to Section 7.06
hereof, it ceases to be outstanding unless the Property Trustee receives proof
satisfactory to it that the replaced or paid Preferred Security is held by a
protected purchaser (as such term is used in Section 8-405 of the Delaware
Uniform Commercial Code).
If Preferred Securities are considered paid in full in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them cease to accumulate.
A Preferred Security does not cease to be outstanding because one of the
Trust, the Trustees, the Depositor or an Affiliate of the Depositor or the
Trustees holds such Security.
Section 7.08 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 Trustees, the
Depositor or an Affiliate of the Depositor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the purposes of
determining whether the Property Trustee shall be fully protected in relying on
any such direction, waiver or consent, only Securities which the Property
Trustee knows are so owned shall be so disregarded.
Section 7.09 Temporary Securities. Until definitive Securities are ready
for delivery, the Trust may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and deliver to
the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation amount of definitive Preferred Securities in certificated
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).
Section 7.10 Cancellation. Any Administrative Trustee on behalf of the
Trust at any time may deliver Preferred Securities to the Property Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall deliver to the Administrative Trustees a certificate
of cancellation. The Trust may not issue new Preferred Securities to replace
Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has converted.
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ARTICLE VIII
Termination of Trust
Section 8.01 Dissolution of Trust. (a) The Trust shall dissolve upon the
earliest to occur of the following:
(i) the bankruptcy of the Holder of the Common Securities or
the Depositor;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Depositor; the revocation of the charter of the Holder of the Common
Securities or the Depositor and the expiration of 90 days after the date
of revocation without a reinstatement thereof;
(iii) a written direction of the Depositor to dissolve the Trust
and distribute a Like Amount of Debentures to Holders of the Securities
in accordance with the terms of the Securities;
(iv) all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;.
(v) the expiration of the term of the Trust as set forth in
Section 3.14 hereof;
(vi) the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Depositor or the Trust;
(vii) upon distribution of the Common Stock of the Depositor to
Holders of all outstanding Securities upon conversion of all such
Securities; or
(viii) before the issuance of any Securities, with the consent of
all the Administrative Trustees and the Depositor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a), and after the completion of the winding up of
the affairs of the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.09, 3.10 and 5.12 and Article X shall
survive the termination of the Trust.
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ARTICLE IX
Transfer and Exchange
Section 9.01 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 Administrative Trustees shall prepare and one Administrative
Trustee shall execute and the Property Trustee shall authenticate Preferred
Securities at the Registrar's request.
(b) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
Subject to this Article IX, the Depositor and any Related Party may only
transfer Common Securities (i) in accordance with Article VIII of the Indenture,
or (ii) to the Depositor or a Related Party of the Depositor; provided that, any
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
(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.
(c) The Administrative Trustees shall provide for the registration of
Securities and of transfers of Securities, which will be effected without charge
but only upon payment (with such indemnity as the Administrative Trustees may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees and, in the
case of Preferred Securities, authenticated by the property trustee. Every
Security surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Administrative
Trustees and the Registrar or co-Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be cancelled in accordance with Section 7.10. A
transferee of a Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
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(d) 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.
(e) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Preferred
Securities surrendered upon such transfer or exchange.
Section 9.02 Transfer Procedures and Restrictions.
(a) General. Subject to Sections 9.02(b) and 9.02(h)(ii), if Preferred
Securities are issued upon the transfer, exchange or replacement of Preferred
Securities bearing the Restricted Securities Legend set forth in Exhibit A-1
hereto, or if a request is made to remove such Restricted Securities Legend on
Preferred Securities, the Preferred Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which may include an opinion of
counsel licensed to practice law in the State of New York, as may be reasonably
required by the Depositor, that (i) neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or (ii) that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Property Trustee, at the written
direction of the Trust, shall authenticate and deliver Preferred. Securities
that do not bear the Restricted Securities Legend.
(b) Transfers After Effectiveness of Shelf Registration Statement.
After the effectiveness of a Shelf Registration Statement for any Preferred
Securities, all requirements pertaining to Restricted Securities Legends on any
Preferred Security included within such Shelf Registration Statement will cease
to apply, and beneficial interests in a Preferred Security in global form
without Restricted Securities Legends will be available to transferees of such
Preferred Securities upon directions to transfer such Holder's beneficial
interest in the Rule 144A Global Preferred Security. After the effectiveness of
the Shelf Registration Statement, an Administrative Trustee on behalf of the
trust shall execute and the property Trustee shall authenticate a Preferred
Security in global form without the restricted Securities Legend (the
"Unrestricted Global Preferred security") to deposit with the depositary to
evidence transfers of beneficial interests from the rule 144a global preferred
security.
(c) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar
(x) to register the transfer of such Definitive
Preferred Securities; or
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(y) to exchange such Definitive Preferred Securities
for an equal number of Definitive Preferred Securities of
another denomination;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met,
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing.
(ii) in the case of Definitive Preferred Securities
that are Restricted Preferred Securities, are being transferred or
exchanged (x) pursuant to an effective registration statement under the
Securities Act or (y) pursuant to, and in compliance with, clause (A) or
(B) below:
(A) if such Restricted Preferred Securities
are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, such
Holder shall deliver a certification to that effect (in the form
set forth on the reverse of the Preferred Security); or
(B) if such Restricted Preferred Securities
are being transferred pursuant to an exemption from registration
in accordance with Rule 144A under the Securities Act such
Holder shall deliver: (i) a certification to that effect (in the
form set forth on the reverse of the Preferred Security) and
(ii) if the Trust or Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the restrictions
set forth in the Restricted Securities Legend.
Definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act must be delivered to QIBs in
the form of a beneficial interest in the Rule 144A Global Preferred Security in
accordance with Section 9.02(d) except as otherwise provided in Section 7.03(d).
(d) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, is form
satisfactory to the Property Trustee, together with written instructions
directing the Property Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Global Preferred
Security to reflect an increase in the number of the Preferred Securities
represented by the Global Preferred Security, then the Property Trustee shall
cancel such Definitive Preferred Security and cause, or direct the Depositary to
cause, the aggregate number of Preferred Securities
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represented by the Global Preferred Security to be increased accordingly. If no
Global Preferred Securities are then outstanding, an Administrative Trustee on
behalf of the Trust shall execute and the Property Trustee shall authenticate,
upon written order of any Administrative Trustee, an appropriate number of
Preferred Securities in global form.
(e) Transfer and Exchange of Global Preferred Securities.
The transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(f) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security. Definitive Preferred Securities
issued in exchange for a beneficial interest in a Global Preferred Security
pursuant to this Section 7.03(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the Property
Trustee. The Property Trustee shall deliver such Preferred Securities to the
Persons in whose names such Preferred Securities are so registered in accordance
with the instructions of the Depositary.
(g) Restrictions on Transfer and Exchange of Global
Preferred Securities. Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in Section 7.03), a Global Preferred
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by any such nominee to another nominee of the Depositary or
by the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
(h) Legend.
(i) Except as permitted by the following paragraph
(ii), each Preferred Security certificate evidencing the Global
Preferred Securities and the Definitive Preferred Securities (and all
Preferred Securities issued in exchange therefor or substitution
thereof) shall bear a legend the "Restricted Securities Legend") in
substantially the following form:
"EACH OF THE PREFERRED SECURITIES (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF
THE PREFERRED SECURITIES AND ANY DEBENTURES ISSUED UPON EXCHANGE FOR THE
PREFERRED SECURITIES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF EACH OF THE PREFERRED SECURITIES
IS HEREBY NOTIFIED THAT THE SELLER OF EACH OF THE PREFERRED SECURITIES
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
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THE HOLDER OF THIS PREFERRED SECURITY AGREES FOR THE BENEFIT OF
THE ISSUER AND THE COMPANY THAT (A) THIS PREFERRED SECURITY AND ANY
DEBENTURES OR COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii)
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
EACH OF THE PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Restricted
Preferred Security (including any Restricted Preferred Security
represented by a Global Preferred Security) pursuant to Rule 144 under
the Securities Act or an effective registration statement under the
Securities Act the Registrar shall, at the direction of the Trust,
permit the Holder thereof to exchange such Restricted Preferred Security
for an interest in the Unrestricted Global Preferred Security.
(i) Cancellation or Adjustment of Global Preferred
Security. At such time as all beneficial interests in a Global Preferred
Security have either been exchanged for Definitive Preferred Securities
to the extent permitted by the Declaration or redeemed, repurchased or
cancelled in accordance with the terms of this Declaration, such Global
Preferred Security shall be returned to the Depositary for cancellation
or retained and cancelled by the Property Trustee. At any time prior to
such cancellation, if any beneficial interest in a Global Preferred
Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be
reduced and an adjustment shall be made on the books and records of the
Property Trustee (if it is then the Registrar for such Global Preferred
Security) with respect to such Global Preferred Security, by the
Property Trustee or the Registrar, to reflect such reduction.
(j) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any preferred Security Beneficial Owner,
a Participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Preferred Securities or with respect to the delivery to any Participant,
Preferred Security Beneficial Owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such
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Preferred Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Preferred
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depositary or its nominee in the
case of a Global Preferred Security). The rights of Preferred Security
Beneficial Owners in any Global Preferred Security shall be exercised
only through the Depositary subject to the applicable rules and
procedures of the Depositary. The Property Trustee may conclusively rely
and shall be fully protected in relying upon information furnished by
the Depositary or agent thereof with respect to its Participants and any
Preferred Security Beneficial Owners.
(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 Preferred Security Beneficial Owners in any Global
Preferred Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and to
do so if and when expressly required by, the terms of this Declaration,
and to examine the same to determine substantial compliance as to form
with the express requirements hereof.
Section 9.03 Deemed Security Holders. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions (subject to Section 2(b) of Annex 1) and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust, the
Property Trustee, the Registrar or a co-Registrar shall have actual or other
notice thereof.
Section 9.04 Notices to Depositary. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notions 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 9.05 Appointment of Successor Depositary. If the
Depositary elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Depositary with respect to such Preferred
Securities.
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ARTICLE X
Limitation of Liability of Holders of Securities Trustees or Others
Section 10.01 Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantee and the terms of the Securities, the
Depositor 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) 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 for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Preferred Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
Section 10.02 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, if selected by such
Indemnified Person, has been selected by it with reasonable care 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 10.03 Fiduciary Duty. (a) To the extent that, at law or
in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
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otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(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.
Section 10.04 Indemnification. (a) To the fullest extent
permitted by applicable law, the Debenture Issuer shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage, liability,
tax, penalty, expense or claim of any kind or nature whatsoever incurred without
gross negligence (or, in the case of the Property Trustee, negligence), bad
faith or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the
reasonable 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
Debenture Issuer shall be entitled to participate in the defense of any action
arising hereunder and, to the extent it may wish, assume the defense thereof,
with counsel satisfactory to such
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Indemnified Persons (who shall not, except with the consent of the Indemnified
Persons, be counsel to the Debenture Issuer). Upon assuming such defense, the
Debenture Issuer shall not be liable for any legal or other expenses
subsequently incurred by such Indemnified Persons in connection with the defense
thereof, other than reasonable costs of investigation. The Debenture Issuer
shall not, without the prior written consent of the Indemnified Persons, effect
any settlement of any pending or threatened action in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person unless such settlement (i) includes
an unconditional release of such Indemnified Person from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an Indemnified Person.
(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 Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The obligation to indemnify, as
set forth in this Section 10.04, shall survive the termination of this
Declaration and the resignation or removal of the Property Trustee or the
Delaware Trustee, as the case may be.
Section 10.05 Outside Businesses. Any Covered Person, the
Depositor, the Delaware Trustee and the Property Trustee (subject to Section
5.03(c)) may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. None of the Depositor, any Covered Person, the Delaware Trustee,
the Administrative Trustees or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Depositor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, thE Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Depositor or any Affiliate of the Depositor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Depositor or its Affiliates.
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ARTICLE XI
Accounting
Section 11.01 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 11.02 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year by a firm of independent certified public accountants
selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, within 90 days after the end
of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss;
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
Section 11.03 Banking. The Administrative Trustees on behalf of
the Trust shall maintain one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of funds in respect
of the Debentures held by the Property Trustee shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
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Section 11.04 Withholding. The Trust and the Administrative
Trustees on behalf of the Trust shall comply with all withholding requirements
under United States federal, state and local law. The Administrative Trustees on
behalf of the Trust shall request, and the Holders shall provide to the
Administrative Trustees, such forms or certificates as are necessary to
establish an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling the Trust's withholding obligations. The Administrative Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to Distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Administrative
Trustees on behalf of the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
Amendments and Meetings
Section 12.01 Amendments. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the Securities, this Declaration
may be amended from time to time by the Depositor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders of the Securities,
(i) to cure any ambiguity, correct or supplement any provision in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to ministerial matters or questions arising under
the Declaration, which shall not be inconsistent with the other provisions of
the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
not be taxable as a corporation or will be classified for United States federal
income tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any Holder of Securities, and any such
amendments of the Declaration shall become effective when notice thereof is
given to the Holders of the Securities.
(b) Except as provided in (c) below, and the terms of the
Securities, this Declaration may be amended by the Trustees and the Depositor
with (i) the consent of Holders representing not less than a Majority in
liquidation amount of the outstanding Preferred Securities, and (ii) receipt by
the Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status as an "investment
company" under the investment Company Act.
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(c) Without the consent of each Holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date, (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date or (iii) adversely
affect the conversion rights of the Securities.
(d) In executing, or accepting the additional trusts created
by, any amendment permitted by this Article or the modifications thereby of the
trusts created by this Declaration, the Property Trustee shall be entitled to
receive and shall be fully protected in relying upon, a written opinion of
counsel stating that the execution of such amendment is authorized or permitted
by this Declaration. The Property Trustee and the Delaware Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Property Trustee's or the Delaware Trustee's, as the case may be, own rights,
duties or immunities under this Declaration or otherwise. No amendment to which
the Delaware Trustee is not a party shall be effective without the consent of
the Delaware Trustee, if such amendment affects the Delaware Trustee's own
rights, duties or immunities under this Declaration or otherwise.
Section 12.02 Meetings of the Holders of Securities: Action by
Written Consent. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. Except as otherwise set
forth in the terms of the Securities, the Administrative Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 25% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Administrative Trustees one or more requests
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by the Certificates so
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(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 on
which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting and without prior notice if a
consent in writing
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setting forth the action so taken is signed by the Holders of Securities
owning not less than the minimum aggregate liquidation amount of
Securities that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled
to vote who have not consented in writing. The Administrative Trustees
may specify that any written ballot submitted to the Holders for the
purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Administrative Trustees;
(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 Administrative Trustees or by such other
Person that the Administrative 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 Administrative Trustees, in
their sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
Section 13.01 Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Depositor at the date of this Declaration, at
the Closing Date and at each Optional Closing Date, if any, and each Successor
Property Trustee represents and warrants to the Trust and the Depositor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
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(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws 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 do not conflict with or constitute a breach
of the certificate of incorporation or by-laws of the Property Trustee.
(d) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking authority
governing the trust powers of the Property Trustee is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
(e) The Property Trustee satisfies the qualifications set
forth in Section 5.03 and shall not create, incur or assume or suffer to exist
any mortgage, pledge, hypothecation, encumbrance, lien or other change or
security interest upon the Debentures.
Section 13.02 Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Depositor at the date of this Declaration, at
the Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Depositor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other
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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
governing the trust powers of the Delaware Trustee is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(e) The Delaware Trustee is 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
Registration Rights
Section 14.01. Registration Rights. The Holders of the Preferred
Securities, the Debentures, the Preferred Securities Guarantee and the shares of
Common Stock of the Depositor issuable upon conversion of the Securities are
entitled to the benefits of a Registration Rights Agreement.
ARTICLE XV
Miscellaneous
Section 15.01 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 Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Administrative Trustees may give notice of to the Holders of the
Securities and the Property Trustee):
Calpine Capital Trust III
c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Attention: Lisa M. Bodensteiner, Esq.
59
<PAGE> 65
(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):
Wilmington Trust Company
Rodney Square North
l100 North Market
Wilmington, Delaware 19890
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):
Wilmington Trust Company
Rodney Square North
l100 North Market
Wilmington, Delaware 19890
Attention: Corporate Trust Department
(d) if given to the Depositor or the Holder of the Common
Securities, at the mailing address of the Depositor set forth below (or such
other address as the Holder of the Common Securities may give notice to the
Trust and the Property Trustee):
Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Attention: Lisa M. Bodensteiner, Esq.
(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 15.02 Governing Law. This Declaration and the rights of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust. To the
fullest extent permitted by law, there shall not be applicable to the parties
hereunder or this Declaration any provision of the laws (statutory or common) of
the State of Delaware pertaining to trusts that relate to or regulate, in a
manner inconsistent with the terms hereof (A) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee
60
<PAGE> 66
fees and charges, (B) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (C) the necessity for obtaining court
or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (D) fees or other sums payable to
trustees, officers, agents, or employees of a trust, (E) the allocation of
receipts and expenditures to income or principal, (F) restrictions or
limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (G) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the trustees hereunder as set forth or referenced in this Declaration.
Section 15.03 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 15.04 Headings. Headings contained in this Declaration
are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
Section 15.05 Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Depositor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
Section 15.06 Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to Persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 15.07 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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<PAGE> 67
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
Peter Cartwright,
as Administrative Trustee
/s/ PETER CARTWRIGHT
-------------------------------------
Ann B. Curtis,
as Administrative Trustee
/s/ ANN B. CURTIS
-------------------------------------
Thomas R. Mason,
as Administrative Trustee
-------------------------------------
Calpine Corporation,
as Depositor and Debenture Issuer
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Property Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 68
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
Peter Cartwright,
as Administrative Trustee
-------------------------------------
Ann B. Curtis,
as Administrative Trustee
/s/ ANN B. CURTIS
-------------------------------------
Thomas R. Mason,
as Administrative Trustee
-------------------------------------
Calpine Corporation,
as Depositor and Debenture Issuer
By: /s/ ANN B. CURTIS
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Property Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 69
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
Peter Cartwright,
as Administrative Trustee
-------------------------------------
Ann B. Curtis,
as Administrative Trustee
-------------------------------------
Thomas R. Mason,
as Administrative Trustee
/s/ THOMAS R. MASON
-------------------------------------
Calpine Corporation,
as Depositor and Debenture Issuer
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Property Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 70
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
Peter Cartwright,
as Administrative Trustee
-------------------------------------
Ann B. Curtis,
as Administrative Trustee
-------------------------------------
Thomas R. Mason,
as Administrative Trustee
-------------------------------------
Calpine Corporation,
as Depositor and Debenture Issuer
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Delaware Trustee
By: /s/ JAMES D. NESCI
-------------------------------------
Name: James D. Nesci
Title: Authorized Signer
Wilmington Trust Company,
as Property Trustee
By: /s/ JAMES D. NESCI
-------------------------------------
Name: James D. Nesci
Title: Authorized Signer
<PAGE> 71
ANNEX I
TERMS OF
Remarketable Term Income Deferrable
Equity Securities (HIGH TIDES(SM)) and
HIGH TIDES Common Securities
Pursuant to Section 7.01 of the Amended and Restated Declaration
of Trust, dated as of August 9, 2000 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or the Indenture (as defined in the
Declaration) or, if not defined in the Declaration, Indenture or Remarketing
Agreement, as defined in the Offering Circular (as defined in the Declaration):
1. Designation and Number.
(a) "Preferred Securities." 10,350,000 (including 1,350,000 relating
to the exercise of the full amount of the over-allotment option granted by the
Trust) Preferred Securities of the Trust with an aggregate liquidation
preference with respect to the assets of the Trust of FIVE HUNDRED SEVENTEEN
MILLION FIVE HUNDRED THOUSAND Dollars ($517,500,000) (including SIXTY-SEVEN
MILLION FIVE HUNDRED THOUSAND Dollars ($67,500,000) relating to the exercise of
the full amount of the over-allotment option granted by the Trust), and a
liquidation amount with respect to the assets of the Trust of $50 per Preferred
Security, are hereby designated for the purposes of identification only as
"Remarketable Term Income Deferrable Equity Securities (HIGH TIDES(SM))" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Exhibit A-1, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or other organization on which the Preferred Securities
are listed, if any.
(b) "Common Securities." 350,000 (including 70,000 relating to the
exercise of the full amount of the over-allotment option granted by the Trust)
Common Securities of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of SEVENTEEN MILLION FIVE HUNDRED THOUSAND Dollars
($17,500,000) (including THREE MILLION FIVE HUNDRED THOUSAND Dollars
($3,500,000) relating to the exercise of the full amount of the option granted
by the Trust) and a liquidation amount with respect to the assets of the Trust
of $50 per Common Security, are hereby designated for the purposes of
identification only as "HIGH TIDES Common Securities" (the "Common Securities").
The Common Security Certificates evidencing the Common Securities shall be
substantially in the form attached hereto as Exhibit A-2, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
A-1
<PAGE> 72
2. Distributions.
(a) Distributions payable on each Security will accrue at the
Applicable Rate applied to the stated liquidation amount of $50 per Security,
such rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. The Applicable Rate will be 5% per annum (the "Initial Rate")
from August 9, 2000 to but excluding the Reset Date. From the Reset Date, the
Applicable Rate will be the Term Rate established by the Remarketing Agent to be
effective on the Reset Date. The Applicable Rate will be increased by 0.50% per
annum during the continuation of a Registration Default until such Registration
Default is cured. Distributions in arrears for more than one quarter will bear
interest thereon compounded quarterly at the Applicable Rate (to the extent
permitted by applicable law) as described in the Declaration. The term
"Distributions" as used herein includes such quarterly Distributions, additional
Distributions on quarterly Distributions not paid on the applicable Distribution
Date and Additional Amounts, as applicable. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue
from August 9, 2000 and will be payable quarterly in arrears, on the following
dates, which dates correspond to the interest payment dates on the Debentures:
February 1, May 1, August 1 and November 1 of each year, commencing on November
1, 2000, except as otherwise described below (each such date being a
"Distribution Date"). The Reset Date is any date (1) not later than August 1,
2005 (or, if such day is not a Business Day, the next succeeding Business Day),
and (2) not earlier than 70 Business Days prior to August 1, 2005, as may be
determined by the Remarketing Agent, in its sole discretion, for settlement of a
successful remarketing. The fifteenth day of the month immediately preceding
each Distribution Date is the record date for determining which holders of
Securities shall be paid the Distributions and Additional Amounts, if any,
payable on such Distribution Date. If the Reset Date is prior to the record date
for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Security is registered on the
relevant record date, subject to the Depositor's right to initiate a Deferral
Period. If the Reset Date is on or after the record date for the immediately
following Distribution Date, then (1) Distributions and Additional Amounts, if
any, accrued from and after the record date to but excluding the Reset Date
shall be paid on the immediately following Distribution Date to the person in
whose name each Security is registered on the relevant record date and (2)
Distributions and Additional Amounts, if any, accrued from and after the Reset
Date to but excluding the immediately following Distribution Date shall be paid
on the second Distribution Date immediately following the Reset Date to the
person in whose name each Security is registered on the relevant record date for
such second Distribution Date, subject in each case to the Depositor's right to
initiate a Deferral Period.
A-2
<PAGE> 73
So long as no Debenture Event of Default has occurred and is continuing,
the Depositor has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each a "Deferral Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Applicable Rate
compounded quarterly during any such Deferral Period. Prior to three Business
Days before a Regular Record Date relating to a Payment Resumption Date (as
defined in the Indenture), the Depositor may further extend such Deferral
Period; provided that such Deferral Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters or extend
beyond (i) the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture and (ii) in the case of a Deferral Period which begins prior to the
Reset Date, the Reset Date. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the Regular
Record Date for the relevant Payment Resumption Date. Upon the termination of
any Deferral Period and the payment of all amounts then due, the Depositor may
commence a new Deferral Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. The relevant record dates shall be on the
fifteenth day of the month immediately preceding each relevant payment date,
except as otherwise described in this Annex I to the Declaration. Subject to any
applicable laws and regulations and the provisions of the Declaration, each such
payment in respect of Preferred Securities being held in book-entry form through
The Depository Trust Company (the "Depositary"), or any successor Depositary
appointed pursuant to the Declaration, will be made as described under the
heading "Description of HIGH TIDES -- Depository Procedures" in the Offering
Circular and each such payment in respect of Preferred Securities not being held
in book-entry form through the Depositary shall be made via checks mailed to
Holders at their addresses as they appear on the books and records of the Trust.
The relevant record dates for the Common Securities shall be the same record
dates as for the Preferred Securities. Distributions payable on any Securities
that are not punctually paid on any Distribution payment date, as a result of
the Depositor having failed to make a payment under the Debentures, will cease
to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions
or other payment in respect of any such delay) except that, with respect to any
Redemption Date, if such Business Day is in the next succeeding calendar year,
such Redemption Date shall be the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
A-3
<PAGE> 74
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock pursuant to the terms
of the Securities as forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided that
Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Stock following such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of the Trust,
the Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount of Debentures, unless such distribution would not be
practical, in which event such Holders will be entitled to receive out of the
assets of the Trust available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate liquidation amount thereof plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis in accordance with paragraph 9. The
Holder of the Common Securities will be entitled to receive Distributions upon
any such liquidation Pro Rata with the Holders of the Preferred Securities,
except as provided in paragraph 10.
4. Redemption and Distribution.
(a) Upon the repayment or payment of the Debentures in whole or in
part, whether at maturity or upon redemption or otherwise (other than following
any distribution of the Debentures to the Holders), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, on a Pro Rata
basis, a Like Amount of Securities, on the redemption date, in an amount per
Security equal to the applicable Redemption Price, payable in cash, which
Redemption Price will be equal to (i) the liquidation amount of each of the
Securities plus any accrued and unpaid Distributions thereon (A) in the case of
the repayment of the Debentures at stated maturity, or (B) in the case of a
redemption of the Debentures in certain limited circumstances set forth in the
Indenture upon the occurrence of a Tax Event, or (ii) (A) in the case of an
Optional Redemption after August 5, 2003 until but excluding the Tender
Notification Date, the Initial Redemption Price; (B) in the case of an Optional
Redemption on or after the Reset Date (except in the event of a Failed Final
Remarketing), in accordance with the Term Call Protections or (C) in the event
of a
A-4
<PAGE> 75
Failed Final Remarketing, 100% of the then outstanding aggregate principal
amount of the Securities being redeemed, plus accrued and unpaid interest
thereon.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Paragraph 4(f)(ii) below.
(c) The Depositor, as the Holder of the outstanding Common
Securities, shall have the right at any time (including, without limitation,
upon the occurrence of a Tax Event or Investment Company Event) to dissolve the
Trust and, after satisfaction of the creditors of the Trust, cause a Like Amount
of the Debentures to be distributed to the Holders of the Securities in
liquidation of the Trust, provided that neither the Depositor nor the
Administrative Trustees may cause the dissolution of the Trust during the period
beginning on the Business Day following the Tender Notification Date and ending
on the Reset Date (other than upon the occurrence of a Tax Event or an
Investment Company Event), provided that the Administrative Trustees shall have
received a No Recognition Opinion (as defined below) prior to the dissolution of
the Trust.
(d) If, at any time, a Tax Event shall occur and be continuing the
Depositor shall cause the Trustees to dissolve the Trust and, after satisfaction
of the creditors of the Trust, cause a Like Amount of Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Tax Event; provided, however, that such
dissolution, liquidation and distribution shall be conditioned on (i) the
Trustees' receipt of an opinion of a nationally recognized independent tax
counsel (reasonably acceptable to the Trustees) experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such dissolution and distribution of
Debentures, and (ii) the Depositor being unable to avoid such Tax Event within
such 90-day period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Depositor, will have no
adverse effect on the Trust, the Depositor or the Holders of the Preferred
Securities and will involve no material cost ("Ministerial Action").
If (i) the Depositor has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel (reasonably
acceptable to the Trustees) experienced in such matters that, as a result of a
Tax Event, there is more than an insubstantial risk that (a) the Trust would not
be considered to be a grantor trust for United States federal income tax
purposes or (b) the Depositor would be precluded from deducting the interest on
the Debentures for United States federal income tax purposes, even after the
Debentures were distributed to the Holders of Securities upon liquidation of the
Trust as described in this paragraph 4(d), or (ii) the Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion,
the Depositor shall have the right, upon not less than 30 nor more than 60 days'
notice, and within 90 days following the occurrence and continuation of such Tax
Event, to redeem the Debentures in whole, but not in part, for cash, for the
principal amount plus accrued and unpaid interest thereon and, following such
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<PAGE> 76
redemption, all the Securities will be redeemed by the Trust at the liquidation
amount of $50 per Security plus accrued and unpaid Distributions thereon;
provided, however, that, if at the time there is available to the Depositor or
the Trust the opportunity to eliminate, within such 90-day period, the Tax
Event by taking some Ministerial Action, the Trust or the Depositor will pursue
such Ministerial Action in lieu of redemption.
In lieu of the foregoing options, the Depositor shall also have the
option of causing the Securities to remain outstanding and pay Additional
Amounts on the Debentures.
"Tax Event" means that the Property Trustee shall have received an
opinion of a nationally recognized independent tax counsel to the Depositor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to, or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority therefor or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (x) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a de minimal amount of other taxes, duties or other governmental
charges as determined by such counsel, or (y) any portion of interest payable by
the Depositor to the Trust (or OID accruing) on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes or (b) with
respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Depositor (or OID accruing) on the debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Depositor in whole or in part for United States federal income tax purposes.
If an Investment Company Event (as hereinafter defined) shall occur and
be continuing, the Depositor shall cause the Trustees to dissolve the Trust and,
after satisfaction of creditors of the Trust, cause a Like Amount of the
Debentures to be distributed to the Holders of the Securities in liquidation of
the Trust within 90 days following the occurrence of such Investment Company
Event.
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<PAGE> 77
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.
After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee (or any successor Depositary or its nominee), as record Holder of
Preferred Securities represented by global certificates, will receive a
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by
the Depositary or its nominee (or any successor Depositary or its nominee), will
be deemed to represent Debentures having an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Depositor or its agent for transfer
or reissuance.
(e) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly Distribution
periods terminating on or before the date of redemption.
(f) Redemption, Distribution and Remarketing Procedures.
(i) Holders will be given not less than 20 nor more than 60
days notice of an Optional Redemption. Holders will be given at least 30
days but not more than 60 days notice of a redemption pursuant to
paragraph 4(d). Notice of distribution of Debentures in exchange for the
Securities will be given by the Administrative Trustees on behalf of the
Trust by mail to each Holder of Securities to be exchanged not fewer than
30 nor more than 60 days before the date fixed for exchange thereof. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph 4(f)(i)
(other than notices in connection with a Remarketing, the terms of which
shall be governed by the Remarketing Agreement), a redemption or
distribution notice shall be deemed to be given on the day such notice is
first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each redemption or distribution notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the redemption or
distribution notice or in the mailing of either thereof with respect to
any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
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<PAGE> 78
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Securities, it being understood
that, in respect of Preferred Securities registered in the name of and
held of record by the Depositary (or any successor Depositary) or any
nominee, the distribution of the proceeds of such redemption will be made
to each Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the
Administrative Trustees on behalf of the Trust gives a redemption or
distribution notice, which notice may only be issued if the Debentures
are redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then (A) with respect to Preferred Securities held in
book-entry form, by 2:30 p.m., New York City time, on the redemption
date, to the extent funds are available, with respect to Preferred
Securities held in global form, the Property Trustee will deposit
irrevocably with the Depositary (or successor Depositary) funds
sufficient to pay the amount payable on redemption with respect to such
Preferred Securities and will give the Depositary irrevocable
instructions and authority to pay the amount payable on redemption to the
Holders of such Preferred Securities, and (B) with respect to Preferred
Securities issued in certificated form and Common Securities, to the
extent funds are available, the Property Trustee will irrevocably deposit
with the Paying Agent funds sufficient to pay the amount payable on
redemption to the Holders of such Securities and will give the Paying
Agent irrevocable instructions and authority to pay the amount payable on
redemption to the Holders thereof upon surrender of their certificates.
If a redemption or distribution notice shall have been given and funds
deposited as required, then on the date of such deposit, all rights of
Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Securities
will cease to be outstanding. Neither the Administrative Trustees nor the
Trust shall be required to register or cause to be registered the
transfer of any Securities that have been so called for redemption. If
any date fixed for redemption of Securities is not a Business Day, then
payment of the amount payable on such date will be made on the next
succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Trust or by the Depositor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue at the then applicable rate, from the
original redemption date to the date of payment, in which case the actual
payment date
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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).
(iv) Redemption and/or distribution notices, as applicable,
shall be sent by the Administrative Trustees on behalf of the Trust to
(A) in the case of Preferred Securities held in book-entry form, the
Depositary and, in the case of Preferred Securities held in certificated
form, the Holders of such certificates and (B) in respect of the Common
Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Depositor
or any of its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities, including by tender, in the open market
or by private agreement; provided that neither the Depositor nor any of
its Affiliates may purchase Preferred Securities on the Reset Date or
submit orders in the Remarketing.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to 5:00
p.m., New York City time, on the Tender Notification Date and, in the event of a
Convertible Remarketing or a Failed Final Remarketing, from and after the Reset
Date to and including August 1, 2030 (except that Securities called for
redemption by the Depositor will be convertible at any time prior to 5:00 p.m.,
New York City time on any Redemption Date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock (as defined in the Indenture) in the manner
described herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $50 principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock on
or prior to the Tender Notification Date into 0.5755 shares of Common Stock per
$50 principal amount of Debentures (which is equivalent to a conversion price of
$86.875 per share of Common Stock, subject to certain adjustments set forth in
the Indenture (as so adjusted, "Initial Conversion Price")). On and after the
Reset Date, the Securities may, at the option of the Trust and subject to the
results of the Remarketing, become nonconvertible or convertible into a
different number of shares of Common Stock.
(b) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent an irrevocable request to convert Securities on
behalf of such Holder (the "Conversion Request"), together, if the Securities
are in certificated form, with such certificates. The Trust shall not cause the
conversion of any Debentures except pursuant to such a Conversion Request. The
Conversion Request
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shall (i) set forth the number of Securities to be converted and the name or
names, if other than the Holder, in which the shares of Common Stock should be
issued and (ii) direct the Conversion Agent (a) to exchange such Securities for
a portion of the Debentures held by the Trust (at the rate of exchange specified
in the preceding paragraph) and (b) to immediately convert such Debentures on
behalf of such Holder, into Common Stock (at the conversion rate specified in
the preceding paragraph). The Conversion Agent shall notify the Property Trustee
of the Holder's election to exchange Securities for a portion of the Debentures
held by the Trust and the Property Trustee shall, upon receipt of such notice,
deliver to the Conversion Agent the appropriate principal amount of Debentures
for exchange in accordance with this Section 5. The Conversion Agent shall
thereupon notify the Depositor of the Holder's election to convert such
Debentures into shares of Common Stock. Holders of Securities at the close of
business on a Distribution record date will be entitled to receive the
Distribution payable on such Securities on the corresponding Distribution
payment date notwithstanding the conversion of such Securities following such
record date but prior to such distribution payment date. Except as provided
above, neither the Trust nor the Depositor will make, or be required to make,
any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities, whether or not
in arrears, (including any Additional Amounts accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid dividends on the shares
of Common Stock issued upon such conversion, except to the extent that such
shares are held of record on the record date for any such dividends. Securities
shall be deemed to have been converted immediately prior to the close of
business on the day on which a Conversion Request relating to such Securities is
received by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive the Common Stock
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Depositor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section 5. In effecting the
conversion and transactions described in this Section 5, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section 5 and (ii) to convert all or a portion of the Debentures into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
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(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Depositor to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.
(e) The Depositor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Depositor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Depositor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Property Trustee shall deliver the shares of
Common Stock received upon conversion of the Debentures to the converting Holder
free and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of the Depositor and the
Administrative Trustees on behalf of the Trust shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory permits
or other authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of the Common Stock
(and all requirements to list the Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Depositor to
lawfully issue Common Stock to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver the Common Stock to each Holder upon conversion of
the Securities.
(f) The Depositor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Depositor shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that in which
the Securities so converted were registered, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the Trust
the amount of any such tax, or has established to the satisfaction of the Trust
that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities set forth in
this Annex I to the Declaration or in the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
(h) Notwithstanding anything to the contrary contained in this Annex I or
the Declaration, no Common Securities may be converted into Common Stock unless
all outstanding Securities are converted into Common Stock, which conversion
will result in the dissolution of the Trust.
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6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 6(b) and 8, as otherwise required
by law, the Declaration and the Indenture, the Holders of the Preferred
Securities will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest on the
Debentures set forth herein, in the Declaration or in the Indenture, if (i) a
Debenture Event of Default occurs and is continuing or (ii) the Depositor
defaults under the Preferred Securities Guarantee (each of (i) and (ii) being an
"Appointment Event"), then the Holders of the Preferred Securities, acting as a
single class, will be entitled by the vote of a Majority in liquidation amount
of the Preferred Securities to appoint a Special Trustee in accordance with
Section 5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities
(other than the Depositor, or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Depositor)
will be entitled to nominate any Person to be appointed as Special Trustee. Not
later than 30 days after such right to appoint a Special Trustee arises, the
Trustees (other than the Delaware Trustee) will convene a meeting for the
purpose of appointing a Special Trustee. If the Trustees fail to convene such
meeting within such 30-day period, the Holders of not less than 10% in aggregate
liquidation amount of the Preferred Securities will be entitled to convene such
meeting in accordance with Section 12.02 of the Declaration. The record date for
such meeting will be the close of business on the Business Day that is one
Business Day before the day on which notice of the meeting is sent to the
Holders. The provisions of the Declaration relating to the convening and conduct
of the meetings of the Holders will apply with respect to any such meeting.
Any Special Trustee so appointed shall cease to be a Special Trustee if
the Appointment Event pursuant to which the Special Trustee was appointed and
all other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities in accordance with Section 5.06(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the Preferred
Securities will be entitled to convene such a meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting will be the close of
business on the Business Day which is one Business Day before the day on which
the notice of meeting is sent to Holders. Notwithstanding the appointment of a
Special Trustee, the Depositor shall retain all rights under the Indenture,
including the right to defer payments of interest by extending the interest
payment period on the Debentures.
Subject to the requirements set forth in this paragraph and as long as
the Debentures are held by the Trust, the Holders of a majority in liquidation
amount of the outstanding Preferred Securities, voting separately as a class
may, and the Trustees shall not, without obtaining the prior approval of the
Holders of a Majority in aggregate liquidation amount of all Preferred
Securities (i) direct the time, method, and place of conducting any proceeding
for any remedy available to the Property Trustee hereunder or under the
Indenture, or executing any trust or power conferred upon the Property Trustee
hereunder or with respect to the Debentures; provided, however, that,
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the Property Trustee shall have the right to decline to follow any such
direction if the Property Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Property Trustee in good
faith shall, by a Responsible Officer or Officers of the Property Trustee,
determine that the proceedings so directed would be illegal or involve it in
personal liability, and provided further that nothing in this Declaration shall
impair the right of the Property Trustee to take any action deemed proper by the
Property Trustee and which is not inconsistent with such direction, (ii) waive
any past default and its consequences that is waivable under Section 5.13 of the
Indenture or otherwise, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Debentures, where such consent shall be required, provided however, that,
where a consent under the Indenture would require the consent or act of the
Holders of greater than a majority in principal amount of Debentures affected
thereby (a "Super Majority"), the Property Trustee may only give such consent or
take such action at the direction of the Holders of at least the proportion in
liquidation preference of the Preferred Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Property Trustee shall not, and none of the other Trustees
shall in any event, revoke any action previously authorized or approved by a
vote of the Holders of the Preferred Securities, except by a subsequent vote of
the Holders of the Preferred Securities. Other than with respect to directing
the time, method and place of conducting any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property Trustee shall
not take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel experienced in such matters to the effect
that, as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption on the redemption
date), then a Holder of Preferred Securities may directly institute a legal
proceeding, subject to the terms of the Indenture (including the subordination
provisions set forth in Article XII thereof), for enforcement of payment to such
Holder (a "Direct Action") of the principal of or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder on or after the respective due date
specified or provided for in the Debentures. Except as provided in the preceding
sentence, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the Holders of the Debentures. In
connection with any Direct Action, the Holder of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities under the
Declaration to the extent of any payment made by the Debenture Issuer to such
Holder of Preferred Securities in such Direct Action. In addition, if the
Property Trustee fails to enforce its rights under the Debentures (other than
rights arising from an Event of Default described in the immediately preceding
sentence) after any Holder of Preferred Securities shall have made a written
request to the Property Trustee to enforce such rights, such Holder of Preferred
Securities may, to the fullest extent permitted by law, institute a direct
action
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on behalf of the Trust to enforce the rights of the Debenture Trustee, the
Property Trustee or any other Person in accordance with the terms of the
Indenture or the Declaration, as the case may be.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent without prior notice. The Administrative Trustees
will cause a notice of any meeting at which Holders of Preferred Securities are
entitled to vote to be mailed to each Holder of record of Preferred Securities.
Each such notice will include a statement setting forth the following
information (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Depositor, the Trustees or any Affiliate of the
Depositor or the Trustee shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding,
except that for the purposes of determining whether the Property Trustee shall
be fully protected in relying on any such direction, waiver or consent, only
Securities which the Property Trustee knows are so owned shall be so
disregarded.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and as otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee,
subject to the exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee, unless a Debenture Event of
Default shall have occurred and be continuing, in which event the Property
Trustee and the Delaware Trustee may only be removed by the Holders of a
Majority in liquidation amount of the Preferred Securities, voting as a class at
a meeting of the Holders of the Preferred Securities; and
(c) Subject to Section 2.06 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy
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available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures; provided, however, that
the Property Trustee shall have the right to decline to follow any such
direction if the Property Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Property Trustee in good
faith shall, by a Responsible Officer or Officers of the Property Trustee,
determine that the proceedings so directed would be illegal or involve it in
personal liability, and provided further that nothing in this Declaration shall
impair the right of the Property Trustee to take any action deemed proper by the
Property Trustee and which is not inconsistent with such direction, (ii) waiving
any past default and its consequences that is waivable under Section 5.13 of the
Indenture, or (iii) exercising any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided that,
where a consent or action under the Indenture would require the consent or act
of the Holders of greater than a majority in principal amount of Debentures
affected thereby (a "Super Majority"), the Property Trustee may only give such
consent or take such action at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this paragraph 7(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Preferred Securities, except by a subsequent vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Common Securities
under this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action the Trust will not fail
to be classified as a grantor trust for United States federal income tax
purposes. If the Property Trustee fails to enforce its rights under the
Debentures after any Holder of Common Securities shall have made a written
request to the Property Trustee to enforce such rights, such Holder of Common
Securities may, to the fullest extent permitted by law, institute a legal
proceeding directly against the Depositor, to enforce the Property Trustee's
rights, as holder of the Debentures, under the Indenture, without first
instituting any legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent without prior notice. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to vote
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. Amendments to Declaration and Indenture.
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(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or rights of the Securities, whether by
way of amendment to the Declaration or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than as described in Section 8.01
of the Declaration, then the Holders of outstanding Securities will be entitled
to vote on such amendment or proposal (but not on any other amendment or
proposal) and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a Majority in liquidation amount of the
Securities, voting together as a single class, provided, however, that, the
rights of Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Trustee shall not be amended without the
consent of each Holder of Preferred Securities; and provided further that if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by at least
the same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment, Distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, on any Distribution Date or redemption date an
Event of Default under the Declaration has occurred and is continuing, in which
case no payment of any Distribution on, or amount payable upon redemption of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distribu-
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tions on, or the amount payable upon redemption of Preferred Securities then due
and payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where a Debenture Event of
Default occurs and is continuing in respect of the Debentures held by the
Property Trustee, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of the Holders of the Preferred
Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture
including the subordination provisions therein, which are each incorporated by
reference herein and which include, among other things, provisions relating to
certain rights of the Holders of the Preferred Securities all as set forth
therein.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar rights
to subscribe for any additional securities.
13. Registration Rights.
The Holders of the Preferred Securities shall have all the rights and
obligations set forth in the Registration Rights Agreement.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Depositor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee, as may be appropriate,
and the Indenture to a Holder without charge on written request to the Depositor
at its principal place of business.
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EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Rule
144A Global Preferred Securities unless otherwise determined by the Depositor in
accordance with applicable law -- EACH OF THE PREFERRED SECURITIES (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH
OF THE PREFERRED SECURITIES AND ANY DEBENTURES ISSUED UPON EXCHANGE FOR THE
PREFERRED SECURITIES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF EACH OF THE PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER
OF EACH OF THE PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS PREFERRED SECURITY AGREES FOR THE BENEFIT OF
THE ISSUER AND THE COMPANY THAT (A) PREFERRED SECURITY AND ANY DEBENTURES OR
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF EACH OF THE
PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.]
[Include if Preferred Security is in global form and The
Depository Trust Company is the Depository -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EX-
A-1-1
<PAGE> 89
CHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
A-1-2
<PAGE> 90
Certificate Number
Number of Preferred Securities
Aggregate Liquidation Value $
CUSIP NO._______
Preferred Securities
of
Calpine Capital Trust III
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)(sm)*
(liquidation amount $50 per HIGH TIDE)
Calpine Capital Trust III, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________(the "Holder") is the registered owner of [_______________
preferred securities of the Trust]** [the amount of preferred securities of the
Trust indicated on Schedule A hereto]*** representing undivided beneficial
interests in the assets of the Trust designated the Remarketable Term Income
Deferrable Equity Securities (HIGH TIDES)(sm)* (liquidation amount $50 per HIGH
TIDE) (the "Preferred Securities"). Subject to the restrictions set forth in the
Declaration (as defined below), the Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust, dated as of August 9, 2000, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Preferred Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Preferred Securities Guarantee to the extent provided therein. The Depositor
will provide a copy of the Declaration, the Preferred Securities Guarantee and
the Indenture to a Holder without charge upon written request to the Trust at
its principal place of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
-----------
* The terms Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES)(sm) and HIGH TIDES(sm) are registered servicemarks of Credit
Suisse First Boston Corporation.
** Applicable to Definitive Preferred Securities only.
*** Applicable to Global Preferred Securities only.
A-1-3
<PAGE> 91
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's (or its authorized designee's)
Certificate of Authentication hereon has been properly executed, these Preferred
Securities shall not be entitled to any benefit under the Declaration or be
valid or obligatory for any purpose.
A-1-4
<PAGE> 92
IN WITNESS WHEREOF, the Trust has executed this certificate this
________ day of _________, 20__.
Calpine Capital Trust III
By:
------------------------------------------
Name:
Title: Administrative Trustee
[CONTINUED ON NEXT PAGE]
A-1-5
<PAGE> 93
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ___________, 20__
Wilmington Trust Company,
as Property Trustee
By:
------------------------------------------
Authorized Officer
A-1-6
<PAGE> 94
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will accrue at
the Applicable Rate applied to the stated liquidation amount of $50 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. The Applicable Rate will be 5%
per annum (the "Initial Rate") from the date of original issuance of the
Securities to be excluding the Reset Date, and the Term Rate from the Reset Date
and thereafter. The Term Rate will be the rate established by the Remarketing
Agent to be effective on the Reset Date. The Applicable Rate will be increased
by 0.50% per annum during the continuation of a Registration Default.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Applicable Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such quarterly
Distributions, additional Distributions on quarterly Distributions not paid on
the applicable Distribution Date and Additional Amounts, as applicable. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the
Preferred Securities will be cumulative, will accrue from August 9, 2000 and
will be payable quarterly in arrears on February 1, May 1, August 1 and November
1, of each year (except as provided below), commencing on November 1, 2000 to
Holders of record at the close of business on the fifteenth day of the month
immediately preceding the applicable payment date, which payment dates shall
correspond to the interest payment dates (each an "Interest Payment Date") on
the Debentures. The Reset Date is any date (1) not later than August 1, 2005
(or, if such day is not a Business Day, the next succeeding Business Day), and
(2) not earlier than 70 Business Days prior to August 1, 2005, as may be
determined by the Remarketing Agent, in its sole discretion, for settlement of a
successful remarketing. The fifteenth day of the month immediately preceding
each Distribution Date is the record date for determining which holders of
Preferred Securities shall be paid the Distributions and Additional Amounts, if
any, payable on such Distribution Date. If the Reset Date is prior to the record
date for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Preferred Security is
registered on the relevant record date, subject to our right to initiate a
Deferral Period. If the Reset Date is on or after the record date for the
immediately following Distribution Date, then (1) Distributions and Additional
Amounts, if any, accrued from and after the record date to but excluding the
Reset Date shall be paid on the immediately following Distribution Date to the
person in whose name each Preferred Security is registered on the relevant
record date and (2) Distributions and Additional Amounts, if any, accrued from
and after the Reset Date to but excluding the immediately following Distribution
Date shall be paid on the second Distribution Date immediately following the
Reset Date to the person in whose name
1
<PAGE> 95
each Preferred Security is registered on the relevant record date for such
second Distribution Date, subject in each case to the Depositor's right to
initiate a Deferral Period. So long as no Debenture Event of Default has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive
quarters (each a "Deferral Period") and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Applicable Rate compounded quarterly during
any such Deferral Period. Prior to the termination of any such Deferral Period,
the Debenture Issuer may further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further deferrals thereof
may not exceed 20 consecutive quarters or extend beyond (i) the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture or (ii) in the
case of a Deferral Period which begins prior to the Reset Date, the Reset Date.
Payments of accrued Distributions will be payable on an Interest Payment Date
elected by the Depositor to Holders as they appear on the books and records of
the Trust on the record date for such Interest Payment Date. Upon the
termination of any Deferral Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Deferral Period, subject to the above
requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of
Common Stock, through (i) the exchange of Preferred Securities for a portion of
the Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
[Include if the Preferred Security contains a Restricted
Securities Legend -- Holders of Restricted Preferred Securities shall have all
the rights and obligations set forth in the Registration Rights Agreement.]
2
<PAGE> 96
SCHEDULE A
The initial liquidation amount of this Global Preferred Security
shall be $ ________________ The following increases or decreases in the
liquidation amount of this Global Preferred Security have been made:
<TABLE>
<CAPTION>
Amount of increase in Amount of decrease in Liquidation Amount of
Liquidation Amount of Liquidation Amount of this Global Preferred Signature of authorized
this Global Preferred this Global Preferred Security following such officer of Trustee or
Date Made Security Security decrease or increase Securities Custodian
--------- --------------------- --------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
</TABLE>
3
<PAGE> 97
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
Calpine Capital Trust III
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Common Stock (as such term is defined in the
Indenture, dated August 9, 2000, between Calpine Corporation and Wilmington
Trust Company, as Debenture Trustee) of CALPINE CORPORATION in accordance with
the terms of the Amended and Restated Declaration of Trust (as amended from time
to time, the "Declaration"), dated as of August 9, 2000, by Peter Cartwright,
Ann B. Curtis and Thomas R. Mason, as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee,
Calpine Corporation, as Depositor and Debenture Issuer, and by the Holders, from
time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise of
the option to convert these Preferred Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Preferred Securities,
agrees to be bound by the terms of the Registration Rights Agreement relating to
Common Stock issuable upon conversion of the Preferred Securities.
1
<PAGE> 98
Date: _____________, _______
in whole ___ in part____
Number of Preferred Securities to be converted:
--------------------------
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are
to be issued, along with the address or
addresses of such person or persons
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature Guarantee:****
-----------------------
----------
**** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
2
<PAGE> 99
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:*****
-------------------------------------------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _________ Preferred Securities held in (check
applicable space) ______ book-entry or _______ definitive form by the
undersigned.
(A) The undersigned (check one box below):
[ ] has requested the Property Trustee by written order to deliver in
exchange for its beneficial interest in the Rule 144A Global Preferred
Security held by the Depositary a Preferred Security or Preferred
Securities in definitive, registered
----------
***** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
1
<PAGE> 100
form in such number equal to its beneficial interest in such Rule 144A
Global Preferred Security (or the number thereof indicated above); or
[ ] has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such number
equal to number of Preferred Securities in definitive registered form so
held; or
[ ] has requested the Property Trustee by written order to exchange or
register the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) [ ] acquired for the undersigned's own account, without transfer
(in satisfaction of Section 9.02(c)(ii)(A) of the
Declaration); or
(2) [ ] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [ ] transferred pursuant to Rule 144 of the Securities Act of
1933; or
(4) [ ] transferred pursuant to an effective registration statement
under the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (2) or (3) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.
---------------------------------------------
Signature
Signature Guarantee:******
----------
****** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
2
<PAGE> 101
------------------------------------- ----------------------------------
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
these Preferred Securities for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Trust as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
--------------------------- ----------------------------------------
NOTICE: To be executed by
an executive officer
3
<PAGE> 102
EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF CALPINE CORPORATION]
Certificate Number Number of Common Securities
Common Securities
of
Calpine Capital Trust III
HIGH TIDES Common Securities
(liquidation amount $50 per HIGH TIDES Common Security)
Calpine Capital Trust III, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the HIGH TIDES Common Securities (liquidation amount $50 per
Remarketable Common Security) (the "Common Securities"). Subject to the
restrictions set forth in the Declaration (as defined below), the Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of August 9, 2000, 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 Depositor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Depositor at its principal place of business.
Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
A-2-1
<PAGE> 103
Upon receipt of this certificate, the Depositor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
federal income tax purposes the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
A-2-2
<PAGE> 104
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of ______, 20__.
Calpine Capital Trust III
By:
-------------------------------------
Name:
Title: Administrative Trustee
A-2-3
<PAGE> 105
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will accrue at the
Applicable Rate applied to the stated liquidation amount of $50 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. The Applicable Rate will be 5% per annum (the
"Initial Rate") from the date of original issuance of the Securities to be
excluding the Reset Date, and the Term Rate from the Reset Date and thereafter.
The Term Rate will be the rate established by the Remarketing Agent to be
effective on the Reset Date. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the Applicable Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes quarterly Distributions, additional Distributions on quarterly
Distributions not paid on the applicable Distribution Date and Additional
Amounts, as applicable. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from August 9, 2000 and will be
payable quarterly in arrears on February 1, May 1, August 1 and November 1 of
each year (except as provided below), commencing on November 1, 2000 to Holders
of record at the close of business on the fifteenth day of the month immediately
preceding the applicable payment date, which payment dates shall correspond to
the interest payment dates (each, an "Interest Payment Date") on the Debentures.
The Reset Date is any date (1) not later than August 1, 2005, or if the day is
not a Business Day, the next succeeding Business Day, and (2) not earlier than
70 Business Days prior to August 1, 2005, as may be determined by the
Remarketing Agent, in its sole discretion, for settlement of a successful
remarketing. The fifteenth day of the month immediately preceding each
Distribution Date is the record date for determining which holders of Common
Securities shall be paid the Distributions and Additional Amounts, if any,
payable on such Distribution Date. If the Reset Date is prior to the record date
for the immediately following Distribution Date, then Distributions and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on such
Distribution Date to the person in whose name each Common Security is registered
on the relevant record date, subject to our right to initiate a Deferral Period.
If the Reset Date is on or after the record date for the immediately following
Distribution Date, then (1) Distributions and Additional Amounts, if any,
accrued from and after the record date to but excluding the Reset Date shall be
paid on the immediately following Distribution Date to the person in whose name
each Common Security is registered on the relevant record date and (2)
Distributions and Additional Amounts, if any, accrued from and after the Reset
Date to but excluding the immediately following Distribution Date shall be paid
on the second Distribution Date immediately following the Reset Date to the
person in whose name each Common Security is registered on the relevant record
date for such second Distribution Date, subject in each case to the Depositor's
right to initiate a Deferral
<PAGE> 106
Period. So long as no Debenture Event of Default has occurred and is continuing,
the Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each a "Deferral
Period") and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the
Applicable Rate compounded quarterly during any such Deferral Period. Prior to
the termination of any such Deferral Period, the Debenture Issuer may further
extend such Deferral Period; provided that such Deferral Period together with
all such previous and further deferrals thereof may not exceed 20 consecutive
quarters or extend beyond (i) the maturity (whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise) of the Debentures
under the Indenture or (ii) in the case of a Deferral Period which begins prior
to the Reset Date, the Reset Date. Payments of accrued Distributions will be
payable on an Interest Payment Date elected by the Depositor to Holders as they
appear on the books and records of the Trust on the record date for such
Interest Payment Date. Upon the termination of any Deferral Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Deferral Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration;
provided that no Common Securities may be converted into Common Stock unless
all outstanding Securities are converted into Common Stock, which conversion
will result in the dissolution of the Trust.
2
<PAGE> 107
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
Calpine Capital Trust III
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into Common Stock (as such term is defined in the
Indenture, dated August 9, 2000, between Calpine Corporation and Wilmington
Trust Company, as Debenture Trustee) of CALPINE CORPORATION in accordance with
the terms of the Amended and Restated Declaration of Trust (as amended from time
to time, the "Declaration"), dated as of August 9, 2000, by Peter Cartwright,
Ann B. Curtis and Thomas R. Mason, as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee,
Calpine Corporation, as Depositor and Debenture Issuer, and by the Holders, from
time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise of
the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Securities set forth
as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Common Securities, agrees
to be bound by the terms of the Registration Rights Agreement relating to Common
Stock issuable upon conversion of the Common Securities.
<PAGE> 108
Date: ___________, ____
in whole__ in part___
Number of Common Securities to be converted:
------------------------
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are
to be issued, along with the address or
addresses of such person or persons
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature Guarantee:*******
--------------------
----------
******* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
2
<PAGE> 109
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 any 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.)
