EXHIBIT 1.1
20,000,000 SHARES
CALPINE
CORPORATION
CALPINE CORPORATION COMMON STOCK,
$.001 PAR VALUE
UNDERWRITING
AGREEMENT
April 23,
2009
Morgan Stanley
& Co. Incorporated
c/o Morgan Stanley
& Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and
Gentlemen:
The shareholder named in Schedule I hereto (the
“ Selling Shareholder ”) of Calpine Corporation,
a Delaware corporation (the “ Company ”)
proposes to sell to Morgan Stanley & Co. Incorporated (the
“ Underwriter ” or “ you ”)
an aggregate of 20,000,000 shares of Calpine Corporation Common
Stock, Par Value $.001 (the “ Firm Shares
”).
The Selling Shareholder also proposes to issue
and sell to the Underwriter not more than an additional 3,000,000
shares of Calpine Corporation Common Stock, Par Value $.001 (the
“ Additional Shares ”) if and to the extent that
the Underwriter shall have determined to exercise the right to
purchase such Additional Shares in accordance with Section 3
hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the “ Shares
.” The shares of Calpine Corporation Common Stock, Par Value
$.001 of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the
“ Common Stock .” The Company and the Selling
Shareholder are hereinafter sometimes collectively referred to as
the “ Sellers .”
The Company has filed with the Securities and
Exchange Commission (the “ Commission ”) a
registration statement (File No. 333-152982), including a
prospectus, relating to the Shares. The registration
statement as amended at the time it became effective, including the
information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the “
Securities Act ”), is hereinafter referred to as the
“ Registration Statement ”; the prospectus in
the form first used to confirm sales of Shares (or in the form
first made available to the Underwriter by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities
Act) is hereinafter referred to as the “ Prospectus.
” If the Company has filed an abbreviated
registration statement to register additional shares of Common
Stock pursuant to Rule 462(b) under the Securities Act (the
“ Rule 462 Registration Statement ”), then
any reference herein to the term “ Registration
Statement ” shall be deemed to include such Rule 462
Registration Statement.
For purposes of this Agreement, “ free
writing prospectus ” has the meaning set forth in Rule
405 under the Securities Act, “ Time of Sale
Prospectus ” means the preliminary prospectus together
with the free writing prospectuses, if any, each identified in
Schedule II hereto, and “ broadly available
road
show ” means a
“bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act that has been made available
without restriction to any person. As used herein, the
terms “Registration Statement,” “preliminary
prospectus,” “Time of Sale Prospectus” and
“Prospectus” shall include the documents, if any,
incorporated by reference therein. The terms “
supplement, ” “ amendment ” and
“ amend ” as used herein with respect to the
Registration Statement, the Prospectus, the Time of Sale Prospectus
or any free writing prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), that are deemed to be incorporated by
reference therein.
1.
Representations and Warranties of the Company
. The Company represents and warrants to and agrees with
the Underwriter that:
(a) The Registration
Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by
the Commission. If the Registration Statement is an
automatic shelf registration statement as defined in Rule 405 under
the Securities Act, the Company is a well-known seasoned issuer (as
defined in Rule 405 under the Securities Act) eligible to use the
Registration Statement as an automatic shelf registration statement
and the Company has not received notice that the Commission objects
to the use of the Registration Statement as an automatic shelf
registration statement.
(b) (i) Each document,
if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder,
(iv) the Time of Sale Prospectus does not, and at the time of each
sale of the Shares in connection with the offering when the
Prospectus is not yet available to prospective purchasers and at
the Closing Date (as defined in Section 5), the Time of Sale
Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, (v) each broadly available road
show, if any, when considered together with the Time of Sale
Prospectus, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (vi) the
Prospectus does
not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in
the Registration Statement, the Time of Sale Prospectus or the
Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company is not
an “ineligible issuer” in connection with the offering
pursuant to Rules 164, 405 and 433 under the Securities
Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free
writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the
free writing prospectuses, if any, identified in Schedule II
hereto, and electronic road shows, if any, each furnished to you
before first use, the Company has not prepared, used or referred
to, and will not, without your prior consent, prepare, use or refer
to, any free writing prospectus.
(d) The Company has
been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Time of
Sale Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a
whole.
(e) Each subsidiary of
the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Time of
Sale Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so duly
incorporated (other than with respect to any of the Company’s
“significant subsidiaries” within the meaning of Rule
1-02 of Regulation S-X), qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole; all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as set forth
in the Time of Sale
Prospectus and
the Prospectus, are owned directly by the Company, free and clear
of all liens, encumbrances, equities or claims.
(f) This Agreement has
been duly authorized, executed and delivered by the
Company.
(g) The authorized
capital stock of the Company conforms as to legal matters in all
material respects to the description thereof contained in each of
the Time of Sale Prospectus and the Prospectus.
(h) The shares of
Common Stock (including the Shares to be sold by the Selling
Shareholder) have been duly authorized and, except as set forth in
the Time of Sale Prospectus and the Prospectus, are validly issued,
fully paid and non-assessable.
(i) The execution and
delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or
by-laws of the Company or any agreement or other instrument binding
upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may
be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the
Shares.
(j) There has not
occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth
in the Time of Sale Prospectus.
(k) There are no legal
or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is subject
(i) other than proceedings accurately described in all material
respects in the Time of Sale Prospectus and proceedings that would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the power or ability of the
Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale
Prospectus or (ii) that are required to be described in the
Registration Statement or the Prospectus and are not so described;
and there are no statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required.
(l) Each preliminary
prospectus filed as part of the registration statement as
originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when
so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission
thereunder.
(m) The Company is
not, and after giving effect to the sale of the Shares as described
in the Prospectus will not be, required to register as an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
(n) The Company and
its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“ Environmental Laws ”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) There are no costs
or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(p) There are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except pursuant to that certain
Registration Rights Agreement made as of January 31, 2008 by
and among the Company, the Selling Shareholder and the other
parties named therein (which is incorporated by reference as an
exhibit to the Registration Statement) (the “ Registration
Rights Agreement ”).
(q) Neither the
Company nor any of its subsidiaries, nor any director, officer, or
employee, nor, to the Company’s knowledge, any agent or
representative of the Company or of any of its subsidiaries or
affiliates, has taken or will take any action in furtherance of an
offer, payment, promise to pay, or authorization or approval of the
payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government
official”
(including any
officer or employee of a government or government-owned or
controlled entity or of a public international organization, or any
person acting in an official capacity for or on behalf of any of
the foregoing, or any political party or party official or
candidate for political office) to influence official action or
secure an improper advantage; and the Company and its subsidiaries
and affiliates have conducted their businesses in compliance with
applicable anti-corruption laws and have instituted and maintain
and will continue to maintain policies and procedures designed to
promote and achieve compliance with such laws and with the
representation and warranty contained herein.
(r) The operations of
the Company and its subsidiaries are and have been conducted at all
times in material compliance with all applicable financial
recordkeeping and reporting requirements, including those of the
Bank Secrecy Act, as amended by Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and
the applicable anti-money laundering statutes of jurisdictions
where the Company and its subsidiaries conduct business, the rules
and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Anti-Money
Laundering Laws ”), and no action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries
with respect to the Anti-Money Laundering Laws is pending or, to
the best knowledge of the Company, threatened.
(s) (i) The
Company represents that neither the Company nor any of its
subsidiaries (collectively, the “ Entity ”) or ,
to the knowledge of the Entity, any director, officer, employee,
agent or representative of the Entity, is an individual or entity
(“ Person ”) that is, or is owned or controlled
by a Person that is:
(A) the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control (“ OFAC ”), the
United Nations Security Council (“ UNSC ”), the
European Union (“ EU ”), Her Majesty’s
Treasury (“ HMT ”), or other relevant sanctions
authority (collectively, “ Sanctions ”),
nor
(B) located, organized or resident in
a country or territory that is the subject of Sanctions (including,
without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan
and Syria).
(ii) The Entity represents and
covenants that it will not, directly or indirectly, lend,
contribute or otherwise make available any proceeds to any
subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any
activities or business of or with any Person or in any country or
territory that, at the time of such funding or facilitation, is the
subject of Sanctions; or
(B) in any other manner that will
result in a violation of Sanctions by any Person (including any
Person participating in the offering, whether as underwriter,
advisor, investor or otherwise).
(iii) The Entity represents and
covenants that for the past 5 years, it has not knowingly engaged
in, is not now knowingly engaged in, and will not engage in, any
dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.
2.
Representations and Warranties of the Selling Shareholder
. Each Selling Shareholder represents and warrants to
and agrees with the Underwriter that:
(a) This Agreement has
been duly authorized, executed and delivered by or on behalf of
such Selling Shareholder.
(b) The execution and
delivery by such Selling Shareholder of, and the performance by
such Selling Shareholder of its obligations under, this Agreement,
the Custody Agreement signed by such Selling Shareholder and
Calpine Corporation, as Custodian, relating to the deposit of the
Shares to be sold by such Selling Shareholder (the “
Custody Agreement ”) and the Power of Attorney, if
applicable, appointing certain individuals as such Selling
Shareholder’s attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by
the Registration Statement (the “ Power of Attorney
”) will not contravene any provision of applicable law, or
the certificate of incorporation or by-laws of such Selling
Shareholder (if such Selling Shareholder is a corporation), or any
agreement or other instrument binding upon such Selling Shareholder
or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over such Selling Shareholder, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under
this Agreement or the Custody Agreement or Power of Attorney of
such Selling Shareholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
(c) Such Selling
Shareholder has, and on the Closing Date will have, valid title to,
or a valid “security entitlement” within the meaning of
Section 8-501 of the New York Uniform Commercial Code in respect
of, the Shares to be sold by such Selling Shareholder free and
clear of all security interests, claims, liens, equities or other
encumbrances and the legal right and power, and all authorization
and approval required by law, to enter into this Agreement, the
Custody Agreement and the Power of Attorney and to sell, transfer
and deliver the Shares to be sold by such Selling Shareholder or a
security entitlement in respect of such Shares.
(d) The Custody
Agreement and the Power of Attorney have been duly authorized,
executed and delivered by such Selling Shareholder and are valid
and binding agreements of such Selling Shareholder.
(e) Upon
payment for the Shares to be sold by such
Selling Shareholder pursuant to this Agreement, delivery
of such Shares, as directed by the Underwriter, to Cede & Co.
(“ Cede ”) or such other nominee as may be
designated by the Depository Trust Company (“ DTC
”), registration of such Shares in the name of Cede or such
other nominee and the crediting of such Shares on the books of DTC
to securities account of the Underwriter (assuming that neither DTC
nor the Underwriter has notice of any adverse claim (within the
meaning of Section 8-105 of the New York Uniform Commercial
Code (the “ UCC ”)) to such Shares),
(A) DTC shall be a “protected purchaser” of such
Shares within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriter will
acquire a valid security entitlement in respect of such Shares and
(C) no action based on any “adverse claim”, within
the meaning of Section 8-102 of the UCC, to such Shares may be
asserted against the Underwriter with respect to such security
entitlement; for purposes of this representation, the Selling
Shareholder may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in
the name of Cede or another nominee designated by DTC, in each case
on the Company’s share registry in accordance with its
certificate of incorporation, bylaws and applicable law,
(y) DTC will be registered as a “clearing
corporation” within the meaning of Section 8-102 of the
UCC and (z) appropriate entries to the account of the
Underwriter on the records of DTC will have been made pursuant to
the UCC.
(e) The Selling
Shareholder has reviewed and is familiar with the Registration
Statement, the Time of Sale Prospectus and the Prospectus and, with
respect solely to information provided in writing by the Selling
Shareholder that is included therein, has no knowledge of any
material fact, condition or information not disclosed in the Time
of Sale Prospectus or the Prospectus that has had, or may have, a
material adverse effect on the Company and its subsidiaries, taken
as a whole. The Selling Shareholder is not prompted by
any information concerning the Company or its subsidiaries which is
not set forth in the Time of Sale Prospectus to sell its Shares
pursuant to this Agreement.
(f) (i) The
Registration Statement, when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder, (iii) the Time of Sale Prospectus does not,
and at the time of each sale of the Shares in connection with the
offering when the Prospectus is not yet available to prospective
purchasers and at the Closing Date (as defined in
Section 5), the
Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, (iv) each broadly available
road show, if any, when considered together with the Time of Sale
Prospectus, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (v) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this paragraph 2(f) shall only apply to statements or
omissions in the Registration Statement or the Prospectus based
upon information relating to any the Selling Shareholder furnished
by or on behalf of the Selling Shareholder in writing expressly for
use therein.
3. Agreements to
Sell and Purchase . The Selling Shareholder hereby
agrees to sell to the Underwriter, and the Underwriter, upon the
basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees, severally and
not jointly, to purchase from such Seller at $7.87 a share (the
“ Purchase Price ”) the Firm Shares (subject to
such adjustments to eliminate fractional shares as you may
determine).
On the basis of the representations and
warranties contained in this Agreement, and subject to its terms
and conditions, the Selling Shareholder agrees to sell to the
Underwriter the Additional Shares, and the Underwriter shall have
the right to purchase up to 3,000,000 Additional Shares at the
Purchase Price, provided, however, that the amount paid by the
Underwriter for any Additional Shares shall be reduced by an amount
per share equal to any dividends declared by the Company and
payable on the Firm Shares but not payable on such Additional
Shares. You may exercise this right on behalf of the
Underwriter in whole or from time to time in part by giving written
notice not later than 30 days after the date of this
Agreement. Any exercise notice shall specify the number
of Additional Shares to be purchased by the Underwriter and the
date on which such shares are to be purchased. Each
purchase date must be at least one business day after the written
notice is given and may not be earlier than the closing date for
the Firm Shares nor later than ten business days after the date of
such notice. Additional Shares may be purchased as
provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm
Shares. Each day, if any, that Additional Shares are to
be purchased shall be referred to as an “ Option Closing
Date ”.
The Selling Shareholder hereby agrees that,
without the prior written consent of the Underwriter it will not,
during the period ending 60 days after the date of the Prospectus,
(1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purcha
