CALENERGY CAPITAL TRUST III
6 1/2% CONVERTIBLE PREFERRED SECURITIES
(CONVERTIBLE PREFERRED SECURITIES)
(LIQUIDATION PREFERENCE $50 PER CONVERTIBLE PREFERRED SECURITY)
GUARANTEED TO A LIMITED EXTENT BY, AND
CONVERTIBLE INTO COMMON STOCK OF,
CALENERGY COMPANY, INC.
REGISTRATION RIGHTS AGREEMENT
-----------------------------
August 12, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
c/o Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 10010
Ladies and Gentlemen:
CalEnergy Capital Trust III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust") by CalEnergy Company, Inc., a
Delaware corporation (the "Guarantor"), proposes to issue and sell to Credit
Suisse First Boston Corporation and Xxxxxx Brothers Inc. (the "Purchasers"),
upon the terms set forth in the Purchase Agreement dated August 12, 1997 (the
"Purchase Agreement"), among the Purchasers, the Guarantor and the Trust, 6
1/2% Convertible Preferred Securities (liquidation preference $50 per
Convertible Preferred Security) (the "Preferred Securities") (the "Initial
Placement"). As an inducement to you to enter into the Purchase Agreement and
in satisfaction of a condition to your obligations thereunder, the Trust and
the Guarantor agree with you, (i) for the benefit of the Purchasers and (ii)
for the benefit of the holders from time to time of the Preferred Securities,
the 6 1/2% Convertible Junior Subordinated Debentures Due 2027 (the
"Debentures") and the Common Stock, par value $0.0675 per share (the "Common
Stock"), of the Guarantor (together with the related Rights) issuable upon
conversion of the Preferred Securities or the Debentures (collectively,
together with the Guarantee of the Guarantor of the Preferred Securities, the
"Securities"), including the Purchasers (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Confidential Offering Memorandum
dated August 7, 1997, in respect of the Preferred Securities. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as
amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers selected or approved by the Trust and the
Guarantor in accordance with the provisions set forth in Section 6 hereof,
that shall administer an underwritten offering, if any.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended
or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities.
"Registrable Securities" means, with respect to any Holder, all
Securities held by such Holder; provided, however, that a Security ceases to
be a Registrable Security when (i) it has been effectively registered under
the Act and disposed of in accordance with the Shelf Registration Statement or
(ii) it is, in the written opinion of counsel to the Trust and the Guarantor,
permitted to be freely sold or distributed to the public pursuant to any
exemption from the registration requirements of the Securities Act, including
subsection (k) of Rule 144, but excluding Rule 144A; and provided that all
references to Registrable Securities herein shall mean, with respect to any
Security or Securities, collectively the associated Preferred Securities,
Debentures, shares of Common Stock, Rights and Guarantee of such Preferred
Securities and shall not be deemed to apply separately in respect of such
associated Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
covering resales of the Registrable Securities of the Trust and the Guarantor
pursuant to the provisions of Section 2 hereof filed with the Commission which
covers some or all of the Registrable Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
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"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement,
selected or approved by the Trust and the Guarantor in accordance with the
provisions set forth in Section 6 hereof.
2. Shelf Registration. (a) The Trust and the Guarantor shall, within
180 days following the date of original issuance (the "Issue Date") of the
Preferred Securities, prepare and file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution set forth in such Shelf Registration Statement and, thereafter,
shall each use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective under the Act (subject to Section 2(d)
below) no later than 270 days after the Issue Date, provided, however, that no
Holder shall be entitled to have the Registrable Securities held by it covered
by such Shelf Registration unless such Holder is in compliance with Section
3(m) hereof.
(b) The Trust and the Guarantor shall each use its reasonable best
efforts (i) to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders
for a period of two years from the date the Shelf Registration Statement is
declared effective or such shorter period that will terminate upon the earlier
of the following: (A) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement, (B) when all Debentures issued to Holders in respect of Preferred
Securities that had not been sold pursuant to the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement, (C) when all
shares of Common Stock (together with the related Rights) issued upon
conversion of any such Preferred Securities or any such Debentures that had
not been sold pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or (D) when, in the written
opinion of counsel to the Trust and the Guarantor, all outstanding Securities
held by persons which are not Affiliates of the Trust or the Guarantor have
ceased to be Registrable Securities (in any such case, such period being
called the "Shelf Registration Period") and (ii) after the effectiveness of
the Shelf Registration Statement, promptly upon the request of any Holder to
take any action reasonably necessary to register the sale of any Registrable
Securities of such Holder on such Shelf Registration Statement and to identify
such Holder as a selling securityholder.
(c) In the event of a "Registration Default" (as defined in the
Indenture governing the Debentures (the "Indenture") and in the Amended and
Restated Declaration of Trust of the Trust, dated as of August 12, 1997 (the
"Declaration")), additional interest ("Liquidated Damages") will accrue on the
Debentures and the Preferred Securities from and including the day following
the day such Registration Default shall occur (or be deemed to occur as
described in the Indenture and the Declaration) to but excluding the day on
which such Registration Default has been cured (or be deemed to be cured as
described in the Indenture and the Declaration). Liquidated Damages will be
paid quarterly in arrears, with the first quarterly payment due on the first
interest or distribution payment date, as applicable, following the date on
which such Liquidated Damages begin to accrue, and will accrue at a rate per
annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount or liquidation amount, as applicable, to and including the
90th day following such Registration Default and one-half of one percent
(0.50%) thereof from and after the 91st day following such Registration
Default. Following the cure of a Registration Default, Liquidated Damages will
cease to accrue with respect to such Registration Default.
(d) Notwithstanding any other provision hereof, the Trust and the
Guarantor or the Guarantor acting alone may postpone or suspend the filing or
the effectiveness of the Shelf Registration Statement (or any amendments or
supplements thereto), or the sale of Securities pursuant thereto, if (i) such
action
3
is required by applicable law or regulation, or (ii) such action is taken in
good faith and for valid business reasons (not including avoidance of the
Trust's and Guarantor's obligations hereunder), including the acquisition or
divestiture of assets, other pending corporate developments, public filings
with the Commission or other similar events, so long as the Trust and the
Guarantor promptly thereafter comply with the requirements of Section 3(i)
hereof, if applicable. The Trust and the Guarantor shall be deemed not to have
used their reasonable best efforts to keep the Shelf Registration Statement
effective during the requisite period if either the Trust or the Guarantor
intentionally takes any action not referred to in clause (i) or (ii) of this
Section 2(d) that would result in Holders of Registrable Securities covered
thereby not being able to offer and sell any such Registrable Securities
during that period. Notwithstanding the occurrence of any event referred to in
such clauses (i) or (ii) (a "Suspension"), such event shall not, except as set
forth in the Indenture and the Declaration, suspend, postpone or in any other
manner affect the running of the time period by which the Shelf Registration
Statement must be filed, declared effective, or during which it must remain
effective, in order to prevent the occurrence of a Registration Default
pursuant to the Indenture or the Declaration, and, if the filing or
effectiveness of the Shelf Registration Statement is postponed or suspended as
a result of a Suspension, a Registration Default shall nonetheless exist under
the Indenture and the Declaration if all other requirements set forth for the
occurrence of a Registration Default shall be satisfied, and the provisions of
the Debentures and the Preferred Securities requiring the payment of
additional interest during the period of such Registration Default, as set
forth in the Indenture and the Declaration, shall be applicable. The Trust and
the Guarantor agree to notify the Holders of the occurrence of a Suspension as
promptly as practicable after such occurrence and to mail notice thereof to
Holders reasonably promptly following the termination of any suspension.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Guarantor shall furnish to the Purchasers,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein (provided that, for
this purpose, amendments or supplements shall not be deemed to include
documents incorporated by reference into such Shelf Registration Statement)
and shall each use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as the Purchasers
reasonably may propose on a timely basis.
(b) The Trust and the Guarantor shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the Securities
Act and the Exchange Act and the respective rules and regulations thereunder,
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain an 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 and (iii) any Prospectus forming part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading (except, in
each case, for any untrue statements of a material fact or omissions to state
a material fact made in reliance on and in conformity with information
furnished to the Guarantor or the Trust by or on behalf of Holders or
underwriters).
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(c) (1) The Trust and the Guarantor shall advise the Purchasers and,
in the case of clause (i), the Holders and, if requested by the Purchasers or
any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
(exclusive of documents incorporated by reference) has become
effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Trust and the Guarantor shall advise the Purchasers and
the Holders and, if requested by the Purchasers or any such Holder,
confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(ii) of the receipt by the Trust or the Guarantor of any
notification with respect to the suspension of the qualification
of the securities included therein for sale in any jurisdiction
or the initiation of any proceeding for such purpose;
(iii) of the happening of any event that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus (exclusive of documents incorporated by reference) so
that, as of such date, the Shelf Registration Statement and the
Prospectus do not contain an untrue statement of a material fact
and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which
they were made) not misleading (which advice may be accompanied
by an instruction that such notice constitutes material
non-public information and to suspend the use of the Prospectus
until the requisite changes have been made), and which
instruction shall require that such Holders shall not
communicate such material non-public information to any third
party and shall not sell or purchase, or offer to sell or
purchase, any securities of the Trust or the Guarantor after
receipt of such advice and prior to the effectiveness of any
action required to be taken by the Trust or the Guarantor
pursuant to Section 3(i) hereof; and
(iv) if the Guarantor determines that the filing of a
post-effective amendment to the Registration Statement would be
appropriate.
(d) The Trust and the Guarantor shall use their reasonable best
efforts to prevent the issuance, and if issued to obtain the withdrawal, of
any order suspending the effectiveness of any Shelf Registration Statement at
the earliest possible time.
(e) The Trust and the Guarantor shall furnish to each Holder of
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto (including any reports or other documents
5
incorporated therein by reference), including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits (including
those incorporated by reference).
(f) The Trust and the Guarantor shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage of
any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and each of the Trust and the Guarantor consents to
the use of the Prospectus or any amendment or supplement thereto by each of
the selling Holders of Securities and the underwriters, if any, in connection
with the offering and sale of the Securities covered by the Prospectus or any
amendment or supplement thereto during the Shelf Registration Period, provided
that such use complies with this Agreement and with all applicable laws and
regulations.
(g) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Guarantor shall register or qualify
such Securities or cooperate with the Holders of Securities included therein
and their respective counsel in connection with the registration or
qualification of such Securities for offer and sale under the securities or
blue sky laws of such jurisdictions in the United States as any such Holders
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of
the Securities covered by such Shelf Registration Statement; provided,
however, that neither the Trust nor the Guarantor will be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of process or
to taxation in any such jurisdiction where it is not then so subject.
(h) Unless any Securities shall be in book-entry only form, the Trust
and the Guarantor shall cooperate with the Holders of Securities to facilitate
the timely preparation and delivery of certificates representing Securities to
be sold pursuant to any Shelf Registration Statement free of any restrictive
legends and in such permitted denominations and registered in such names as
Holders may request in connection with the sale of Securities pursuant to such
Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by Section
3(c)(2)(iii), subject to Section 2(d), the Trust and the Guarantor shall
reasonably promptly prepare a post-effective amendment to any Shelf
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered to
purchasers of the Registrable Securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except, in each
case, for an untrue statement of a material fact or omission to state a
material fact made in reliance on and in conformity with written information
furnished to the Guarantor or the Trust by or on behalf of Holders or
underwriters specifically for use therein). The Trust and the Guarantor agree
to notify the Holders to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and the Holders shall
suspend use of the Prospectus, and not communicate such material non-public
information to any third party, and not sell or purchase, or offer to sell or
purchase, any securities of the Trust or the Guarantor, until the Trust or the
Guarantor have amended or supplemented the Prospectus so it does not contain
any such misstatement or omission. At such time as such public disclosure is
otherwise made or the Trust and the Guarantor determine in good faith that
such disclosure is not necessary, the Trust and the Guarantor agree promptly
to notify the Holders of such determination and to amend or supplement the
Prospectus if necessary, so it does not
6
contain any such untrue statement or omission therein and to furnish the
Holders such numbers of copies of the Prospectus as so amended or supplemented
as the Holders may reasonably request.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Guarantor shall provide a CUSIP number
for the Preferred Securities and the Debentures in the event of and at the
time of any distribution thereof to Holders, registered under such Shelf
Registration Statement, and provide the applicable trustee with certificates
for such Securities, in a form eligible for deposit with The Depository Trust
Company.
(k) The Trust and the Guarantor shall use their best efforts to
comply with all applicable rules and regulations of the Commission and shall
make generally available to their security holders or otherwise provide in
accordance with Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable Shelf Registration Statement an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act.
(l) The Trust and the Guarantor shall use their reasonable best
efforts to cause the Indenture, the Declaration and the Guarantee to be
qualified under the Trust Indenture Act in a timely manner.
(m) The Trust and the Guarantor may require each Holder of Securities
to be sold pursuant to any Shelf Registration Statement to furnish to the
Trust and the Guarantor such information regarding the Holder and the
distribution of such Securities as the Trust and the Guarantor may from time
to time reasonably require for inclusion in such Shelf Registration Statement
and the Guarantor and the Trust may exclude from such registration the
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(n) The Trust and the Guarantor shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters
reasonably agree should be included therein and to which the Trust and the
Guarantor do not reasonably object and shall make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable after
they are notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(o) Subject to Section 6 and Section 2(d), the Trust and the
Guarantor shall enter into such customary agreements (including underwriting
agreements in customary form) which are reasonably acceptable to the Trust and
the Guarantor and shall take all other reasonably requested actions in order
to expedite or facilitate the registration or the disposition of the
Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification
provisions and procedures substantially identical to those set forth in
Section 5 (or such other provisions and procedures acceptable to the Managing
Underwriters, if any, and reasonably acceptable to the Guarantor and the
Trust) with respect to all parties to be indemnified pursuant to Section 5.
(p) Subject to Section 6 and Section 2(d), the Trust and the
Guarantor shall (i) make reasonably available for inspection by the Holders of
Securities to be registered thereunder, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Holders or any such underwriter all
reasonably requested customary and relevant financial and other records,
pertinent corporate documents and properties of the Trust and the Guarantor
and its subsidiaries; (ii) cause the Guarantor's officers, directors and
employees and the Trustees to supply all such information reasonably requested
by such Holders or any such
7
underwriter, attorney, accountant or agent in connection with any such Shelf
Registration Statement as is customary for similar due diligence examinations,
in each case pursuant to confidentiality arrangements reasonably requested by
the Guarantor and the Trust; provided, however, that the foregoing inspection
and information gathering shall, to the greatest extent possible, be
coordinated on behalf of the Holders and the other parties entitled thereto by
one counsel designated by and on behalf of such Holders and reasonably
acceptable to the Guarantor and the Trust; (iii) make such representations and
warranties to the Holders of Securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily made by
the Guarantor and the Trust to Holders or to underwriters in underwritten
offerings; (iv) obtain opinions of counsel to the Trust and the Guarantor (who
may be the General Counsel of the Guarantor) and updates thereof addressed to
each selling Holder and the underwriters, if any, covering such matters as are
customarily covered in opinions requested by Holders or underwriters in
underwritten offerings (it being agreed that the matters to be covered by such
opinion shall include, without limitation, as of the date of the opinion and
as of the effective date of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the prospectus included therein, as then
amended or supplemented, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Guarantor (and, if necessary, any other independent certified public
accountants of any subsidiary of the Guarantor or of any business acquired by
the Guarantor for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to
each such Holder of Securities registered thereunder and the underwriters, if
any, in customary form and covering matters of the type customarily covered in
"cold comfort" letters delivered to Holders or underwriters in connection with
underwritten offerings; and (vi) deliver such customary documents and
certificates as may be reasonably requested by any such Holders and the
Managing Underwriters, if any, including those to evidence compliance with
Section 3(i) and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Trust and the Guarantor. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this
Section 3(p) shall be performed at each closing under any underwritten
offering to the extent required thereunder.
(q) The Trust and the Guarantor will use its reasonable best efforts
to cause the Common Stock relating to such Shelf Registration Statement to be
listed on each securities exchange, if any, on which any shares of Common
Stock are then listed.
(r) In the event that any broker-dealer registered under the Exchange
Act and selected or approved in accordance with the provisions set forth in
Section 6 hereof shall underwrite any Securities or participate as a member of
an underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules and the By-Laws of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder
of such Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Guarantor and the Trust
shall take reasonable steps to (subject to Section 2(d) and 3(p)) assist such
broker-dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by (A) if such Rules or By-Laws, including Rule
2720 thereto, shall so require, engaging (at the expense of the Holders) a
"qualified independent underwriter" (as defined in Rule 2720) selected or
approved by the Trust and the Guarantor to participate in the preparation of
the Shelf Registration Statement relating to such Securities and to exercise
usual standards of due diligence in respect thereto, (B) indemnifying any such
qualified independent underwriter to the extent of the indemnification of
underwriters provided in
8
Section 5 hereof and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the
requirements of the Conduct Rules of the NASD.
(s) The Trust and the Guarantor shall use their reasonable best
efforts to comply with all applicable rules and regulation of the Commission.
4. Registration Expenses. Except as otherwise provided in Section 6,
the Guarantor shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Holders for the reasonable fees and disbursements of one firm of
counsel designated by the Guarantor and reasonably acceptable to the
Purchasers to act as counsel for the Holders in connection therewith;
provided, however that the Trust and the Guarantor shall not be responsible
for any fees and expenses of any underwriter (including any discounts,
commissions or legal fees and expenses) other than the reasonable fees and
expenses of counsel in connection with state blue sky qualifications of the
Registrable Securities.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Trust and the Guarantor, jointly and severally,
agree to indemnify and hold harmless each Purchaser and each Holder of
Securities covered thereby (including the Purchasers), each director, officer,
employee and agent of the Purchasers and each person who controls any
Purchaser or any such Holder within the meaning of either the Securities Act
or the Exchange Act against any losses, claims, damages or liabilities, joint
or several, to which such Purchaser or Holder may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Shelf Registration Statement as originally filed or in
any amendment thereof, or in any preliminary Prospectus or Prospectus or any
Exchange Act filing incorporated therein, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that (i) the Guarantor and the Trust
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in, or omission or alleged omission from, any of such
documents in reliance upon and in conformity with written information
furnished to the Guarantor by any Purchaser through Credit Suisse First Boston
Corporation or any such Holder specifically for use therein and (ii) the
foregoing indemnity with respect to any untrue statement or alleged untrue
statement contained in, or omission or alleged omission from, any preliminary
prospectus relating to a Shelf Registration Statement shall not inure to the
benefit of any Holder (or any person controlling such Holder) from whom the
person asserting any such loss, claim, damage or liability purchases any of
the Securities that are the subject thereof if such person did not receive a
copy of the final prospectus (or the final prospectus as supplemented) at or
prior to the written confirmation of the sale of such Securities to such
person and the untrue statement or alleged untrue statement or omission or
alleged omission contained in the preliminary prospectus was corrected in the
final prospectus (or the final prospectus as supplemented) and the corrected
prospectus was made available to such Holder prior to the time of such sale.
This indemnity agreement will be in addition to any liability which the
Guarantor or the Trust may otherwise have.
9
The Trust and the Guarantor, jointly and severally, also agree to
indemnify or contribute to Losses (as defined below) of, as provided in
Section 5(d), any underwriters of Securities registered under the Shelf
Registration Statement, their officers, directors, employees and agents and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Purchasers and the selling Holders provided
in this Section 5(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(o)
and Section 6 hereof.
(b) As a condition to the inclusion of a Holder's Registrable
Securities in a Shelf Registration Statement, such Holder shall agree to
indemnify and hold harmless (i) the Trust and the Guarantor, (ii) each of the
directors of the Guarantor, (iii) each of its officers who signs such Shelf
Registration Statement, and (iv) each person who controls the Trust or the
Guarantor within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Trust and the
Guarantor, but only with reference to written information relating to such
Holder furnished to the Guarantor by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under Section 5(a)
or (b) of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 5, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability it may have to any indemnified party otherwise than
under Section 5(a) or (b), except to the extent that it has been materially
prejudiced by such failure; and provided that such omission will not relieve
it from any liabilities which it may otherwise have to an indemnified party.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 5 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that the indemnified party shall have the right to appoint
counsel to represent the indemnified party and its controlling persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the indemnified party against the indemnifying party under
this Section 5 if the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such
action, or if, in the written opinion of counsel to either the indemnifying
party or the indemnified party, representation of both parties by the same
counsel would be inappropriate due to actual or likely conflicts of interest
between them, and in that event the fees and expenses of one firm of separate
counsel (in addition to the fees and expenses of local counsel) shall be paid
by the indemnifying party. No indemnifying party shall, without the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld.
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(d) In the event that the indemnity provided in Section 5(a) or (b)
is unavailable to or insufficient to hold harmless an indemnified party for
any reason, then each indemnifying party shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, from the Initial Placement and the Shelf Registration Statement which
resulted in such Losses; provided, however, that in no case shall the
Purchasers or any subsequent Holder of any Security be responsible, in the
aggregate, for any amount in excess of the amount by which the net proceeds
received by such Holders from the sale of the Securities pursuant to the Shelf
Registration Statement exceeds the amount of damages which such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the indemnifying
party and the indemnified party shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of such indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 5(d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 5, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act
shall have the same rights to contribution as such Holder, and each person who
controls the Guarantor or the Trust within the meaning of either the
Securities Act or the Exchange Act, each officer of the Guarantor who shall
have signed the Shelf Registration Statement and each director of the
Guarantor shall have the same rights to contribution as the Guarantor, subject
in each case to the applicable terms and conditions of this Section 5(d). No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent, which consent shall
not be unreasonably withheld or delayed.
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Guarantor or the Trust or any of the officers, directors, employees,
agents or controlling persons referred to in Section 5 hereof, and will
survive the sale by a Holder of Securities covered by the Shelf Registration
Statement.
6. Underwritten Offering. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell such
Registrable Securities in an underwritten offering in accordance with the
conditions set forth below and subject to Section 2(d) and 3(p). In any such
underwritten offering, (a) the investment banker or bankers and manager or
managers that will administer the offering will be selected or approved by the
Guarantor and the Trust, and (b) the underwriting arrangements with respect
thereto will be approved by the Holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such
underwriting arrangements must be reasonably acceptable to the Guarantor and
the Trust. No Holder may participate in any underwritten offering contemplated
hereby unless (a) such Xxxxxx agrees to sell such Xxxxxx's
11
Registrable Securities in accordance with such approved underwriting
arrangements, (b) such Holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) at least 25% of the outstanding Registrable
Securities held by all Holders are included in such underwritten offering. The
Holders participating in any underwritten offering shall be responsible for
any expenses customarily borne by selling securityholders, including
underwriting discounts and commissions and fees and expenses of counsel to the
selling securityholders, and shall reimburse the Trust and the Guarantor for
the fees and disbursements of their counsel, their independent public
accountants and any printing expenses incurred in connection with such
underwritten offering.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Trust and the Guarantor have not,
as of the date hereof, entered into, and shall not, on or after the date
hereof, enter into, any agreement with respect to their securities or
otherwise that conflicts with the rights granted to the Holders herein or the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Guarantor have
obtained the written consent of the Purchasers.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Guarantor in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each
Holder, the address of such Holder set forth in the books and records
of the Trust or the registrar and transfer agent for the Securities;
(2) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Trust or the Guarantor, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchaser or the Trust and the Guarantor by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties and
the Holders, including, without the need for an express assignment or any
consent by the Trust or the Guarantor thereto, subsequent Holders of
Securities. The Trust and the Guarantor hereby agree to extend the benefits of
this Agreement to any Holder of Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
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(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(h) Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired or
affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
13
If the foregoing is in accordance with the Purchasers' understanding
of our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Trust and the
Guarantor and the several Purchasers in accordance with its terms.
Very truly yours,
CALENERGY CAPITAL TRUST III
By Xxxxx Xxxxxxx, solely in his
capacity as trustee and not in
his individual capacity,
/s/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
By Xxxxxx X. XxXxxxxx, solely in his
capacity as trustee and not in his
individual capacity,
/s/ Xxxxxx X. XxXxxxxx
-----------------------------------
Xxxxxx X. XxXxxxxx
CALENERGY COMPANY, INC.
By /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Senior Vice President
and General Counsel
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title:
