Contract
Exhibit 99.3
EXECUTION COPY
UTILITY STOCK PLEDGE AGREEMENT (35%)—NEW TRANCHE B
LOAN
by and among
PG&E CORPORATION,
as Pledgor
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
and
DEUTSCHE BANK
TRUST COMPANY AMERICAS,
as Collateral Agent
for the benefit of the Lenders, as
Pledgee
___________________________________________________________________________
Dated as of October 18, 2002
___________________________________________________________________________
UTILITY STOCK PLEDGE AGREEMENT
(35%)—NEW TRANCHE B LOAN
STOCK
PLEDGE AGREEMENT (35%)—NEW TRANCHE B LOAN (as
amended, modified or supplemented from time to time, this
"Agreement"), dated as of October 18, 2002, among PG&E
CORPORATION, a California corporation (the "Pledgor"), XXXXXX
COMMERCIAL PAPER INC., a corporation organized and existing
under
the laws of the State of New York, as Administrative Agent
for
the lenders (the "Lenders") from time to time parties to the
Credit Agreement described below and DEUTSCHE BANK TRUST
COMPANY
AMERICAS (the "Pledgee"), as Collateral Agent for the benefit
of
the Lenders.
W I T N E S S E T H :
WHEREAS, the
Pledgor, is a party to the Amended and
Restated Credit Agreement, dated as of June 25, 2002 (as
amended,
the "Existing Credit Agreement"), with the lenders parties
thereto, Xxxxxx Commercial Paper Inc., as Administrative
Agent,
and others, pursuant to which such lenders made the Tranche A
Loan (as defined in the Existing Credit Agreement, the
"Existing
Tranche A Loan") and the Tranche B Loan (as defined in the
Existing Credit Agreement, the "Existing Tranche B Loan");
WHEREAS,
pursuant to the Second Amended and Restated
Credit Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the
"Credit
Agreement"), among the Pledgor, the Lenders parties thereto,
the
Administrative Agent and others, the Existing Credit Agreement
is
being amended and restated in its entirety to modify certain
of
the terms applicable to the Existing Tranche B Loan, which
shall
continue to be outstanding under the Credit Agreement (the
Existing Tranche B Loan, as so modified and continued, the
"Continued Tranche B Loan"), to reflect repayment of the
Existing
Tranche A Loan and to provide for the making of an additional
Tranche B Loan (the "New Tranche B Loan");
WHEREAS, the
Pledgor owns 94% of the issued and
outstanding common stock of Pacific Gas and Electric Company,
a
California corporation (the "Issuer"); and
WHEREAS, it
is a condition precedent to the obligation
of the Lenders parties to the Existing Credit Agreement to
agree
to amend and restate the Existing Credit Agreement, and
to the
obligations of the Lenders to make the New Tranche B Loan
under
the Credit Agreement, that this Agreement shall have been
executed and delivered;
NOW,
THEREFORE, in consideration of the foregoing
premises and to induce the Administrative Agent and the
Lenders
to enter into the Credit Agreement, the Pledgor hereby agrees
with the Administrative Agent, for the benefit of the Lenders,
as
follows:
1. SECURITY
FOR OBLIGATIONS. This Agreement is made by
the Pledgor for the benefit of the Pledgee, acting as
Collateral
Agent for the benefit of the Lenders (as more particularly
described in Section 3.1), to secure:
(i) the full and prompt payment when due (whether
at the stated maturity, by acceleration or
otherwise) of all
Obligations of the Pledgor under the
Credit Agreement and
the other Financing Documents in respect
of the New Tranche
B Loan, whether direct or indirect,
absolute or contingent,
due or to become due, now existing or
hereafter arising and
howsoever evidenced, and the due
performance and compliance
by the Pledgor with the terms
thereof;
(ii) any and all sums advanced by the Pledgee or
any New Tranche B Lender in order to
preserve the Collateral
or preserve its security interest in the
Collateral (as
defined below); and
(iii)in the event of any proceeding for the
collection or enforcement of any
indebtedness, obligations,
or liabilities referred to in clauses (i)
and (ii) above,
the reasonable expenses of retaking,
holding, preparing for
sale or lease, selling or otherwise
disposing or realizing
on the Collateral, or of any exercise by
the Pledgee of its
rights hereunder with respect thereto,
together with
reasonable attorneys' fees and court costs
related thereto,
all such obligations, liabilities, sums and expenses set forth
in
clauses (i) through (iii) of this Section 1, whether now
existing
or hereafter arising, being herein collectively called the
"Secured Obligations".
2.
DEFINITIONS. (a) Unless otherwise defined herein,
all capitalized terms used herein and defined in Appendix A
to
the Credit Agreement shall be used herein as therein defined,
and
the principles of construction set forth in Appendix A to the
Credit Agreement shall apply to this Agreement.
(b) In
addition, the following capitalized terms used
herein shall have the definitions specified below:
"Agreement"
has the meaning set forth in the first
paragraph hereof.
"Collateral"
has the meaning set forth in Section 3.1
hereof.
"Continued
Tranche B Loan" has the meaning set forth in
the second recital hereto.
"Credit
Agreement" has the meaning set forth in the
second recital hereto.
"Existing
Credit Agreement" has the meaning set forth
in the first recital hereto.
"Existing Tranche A Loan" has the meaning set forth in
the first recital hereto.
"Existing
Tranche B Loan" has the meaning set forth in
the first recital hereto.
"Issuer" has
the meaning set forth in the third recital
hereto.
"Lenders"
has the meaning set forth in the first
paragraph hereof.
"Newco Spin"
has the meaning set forth in the Credit
Agreement.
"Newco
Stock" means the Capital Stock of Newco Energy
Corporation, a California
corporation.
"New Tranche
B Loan" has the meaning set forth in the
second recital hereto.
"New Tranche
B Lender" means any Lender holding a New
Tranche B Loan, in its capacity as the
holder of such Loan.
"Pledged Stock" means the shares of Capital Stock of
the Issuer described on Annex A hereto,
and any shares of
Capital Stock of the Issuer at any time
issued in respect of
the Capital Stock described on Annex A
hereto.
"Pledgee"
has the meaning set forth in the first
paragraph hereof.
"Pledgor"
has the meaning set forth in the first
paragraph hereof.
"Proceeds"
has the meaning given such term in the UCC.
"Secured Obligations" has the meaning set forth in
Section 1 hereof.
"Securities
Act" means the Securities Act of 1933, as
amended and as in effect from time to
time.
"UCC" means
the Uniform Commercial Code as in effect in
the State of New York from time to
time.
"Utility
Stock Pledge Agreement (65%)—Continued Tranche
B Loan" means the Utility Stock Pledge
Agreement (65%)—
Continued Tranche B Loan, dated as of the
date hereof, among
the parties hereto, pursuant to which 65%
of the common
stock of the Issuer is being pledged to
secure Obligations
relating to the Continued Tranche B
Loan.
"Utility
Stock Pledge Agreement (65%)—New Tranche B
Loan" means the Utility Stock Pledge
Agreement (65%)—New
Tranche B Loan, dated as of the date
hereof, among the
parties hereto, pursuant to which 65% of
the common stock of
the Issuer is being pledged to
secure the Secured
Obligations.
"Utility
Stock Pledge Agreement (35%)—Continued Tranche
B Loan" means the Utility Stock Pledge
Agreement (35%)—
Continued Tranche B Loan, dated as of the
date hereof, among
the parties hereto, pursuant to which the
Collateral is
being pledged to secure Obligations
relating to the
Continued Tranche B Loan.
3. PLEDGE
OF PLEDGED STOCK, ETC.
3.1
Pledge. (a) The Pledgor hereby transfers, pledges
and assigns to the Pledgee, and grants to the Pledgee a first
priority security interest in, all of the right, title and
interest of the Pledgor in and to the following, whether now
existing or hereafter from time to time acquired by the
Pledgor
(collectively, the "Collateral"):
(i)
the Pledged Stock;
(ii) all
other property hereafter delivered in
substitution for any of the Pledged Stock,
all certificates
and instruments representing or evidencing
such other
property and all cash, securities,
interest, dividends,
distributions rights and other property at
any time and from
time to time received, receivable or
otherwise distributed
in respect of or in exchange for any or
all thereof
(including, without limitation, any Newco
Stock distributed
to the Pledgor in respect of the Pledged
Stock in connection
with the Newco Spin); and
(iii) all Proceeds of any and all of the
foregoing.
(b)
The foregoing transfer, pledge, assignment and
grant of a security interest is made to secure the prompt and
complete payment and performance when due of the Secured
Obligations.
(c)
Concurrently herewith, the parties hereto are
entering into the Utility Stock Pledge Agreement
(35%)—Continued
Tranche B Loan. It is the intention of the parties hereto and
thereto that the security interest and lien created hereby
shall
be a separate security interest and lien from that created by
the
Utility Stock Pledge Agreement (35%)—Continued Tranche B
Loan,
and that the security interest and lien created hereby shall
be
equal in priority to that created by the Utility Stock Pledge
Agreement (35%)—Continued Tranche B Loan. It is also
the
intention of the parties hereto and thereto that any
avoidance,
pursuant to Sections 547 and 550 of the Bankruptcy Code, of
the
security interest and lien created by the Utility Stock
Pledge
Agreement (35%)—Continued Tranche B Loan shall have no effect
on
the lien and security interest created hereby, which shall
continue as a perfected first priority interest in the
Collateral
securing the Secured Obligations notwithstanding any such
avoidance of the security interest and lien created by the
Utility Stock Pledge Agreement (35%)—Continued Tranche B
Loan.
(d)
Concurrently herewith, the parties hereto are
entering into the Utility Stock Pledge Agreement
(65%)—Continued
Tranche B Loan and the Utility Stock Pledge Agreement
(65%)—New
Tranche B Loan, in each case covering collateral that is
separate
and distinct from the Collateral. It is the intention of the
parties hereto and thereto that the security interest and
lien
created hereby shall be a separate security interest and lien
from those created by the Utility Stock Pledge Agreement
(65%)—
Continued Tranche B Loan and the Utility Stock Pledge
Agreement
(65%)—New Tranche B Loan.
3.2
Procedures. (a) To the extent that the Pledgor
at any time or from time to time owns, acquires or obtains
any
right, title or interest in any Collateral, such Collateral
shall
automatically (and without the taking of any action by the
Pledgor) be pledged pursuant to Section 3.1 of this Agreement
and, in addition thereto, the Pledgor shall (as promptly as
practicable and, in any event, within 10 days after it
obtains
such Collateral) deliver to the Pledgee any stock
certificates
evidencing such Collateral, duly endorsed in blank, and take
such
other actions as the Pledgee shall reasonably request to
perfect
the Pledgee's security interest in such Collateral.
(b)
In addition to the actions required to be taken
pursuant to Section 3.2(a) hereof, the Pledgor shall from time
to
time, at the sole expense of the Pledgor, cause appropriate
financing statements (on Form UCC-1 or other appropriate
form)
under the Uniform Commercial Code as in effect in the various
relevant States, in form covering all Collateral hereunder
(with
the form of such financing statements to be satisfactory to
the
Pledgee), to be filed in the relevant filing offices so that
at
all times the Pledgee has a security interest in all
Collateral
which is perfected by the filing of such financing statements
(in
each case to the maximum extent perfection by filing may be
obtained under the laws of any relevant State).
3.3
Subsequently Acquired Collateral. If the Pledgor
shall acquire (by purchase, dividend or similar distribution
or
otherwise) any additional Collateral at any time or from time
to
time after the date hereof, such Collateral shall
automatically
(and without any further action being required to be taken)
be
subject to the pledge and security interests created pursuant
to
Section 3.1 hereof and, furthermore, the Pledgor will
promptly
thereafter take (or cause to be taken) all action with respect
to
such Collateral in accordance with the procedures set forth
in
Section 3.2 hereof, and will promptly thereafter deliver to
the
Pledgee (i) a certificate executed by a principal executive
officer of the Pledgor describing such Collateral and
certifying
that the same has been duly pledged in favor of the Pledgee
(for
the benefit of the Lenders) hereunder and (ii) supplements to
Annexes A and B hereto as are reasonably necessary to cause
such
annexes to be complete and accurate at such time.
3.4
Transfer Taxes. Each pledge of Collateral under
Section 3.1 hereof shall be accompanied by any transfer tax
stamps required in connection with the pledge of such
Collateral.
3.5
Certain Representations and Warranties Regarding
the Collateral. The Pledgor represents and warrants that on
the
date hereof (i) the Pledged Stock consists of the number and
type
of shares described in Annex A hereto; (ii) the Pledged Stock
constitutes that percentage of the issued and outstanding
common
stock of the Issuer as is set forth in Annex A hereto; and
(iii)
the Pledgor has complied with the respective procedure set
forth
in Sections 3.2(a) and (b) hereof with respect to each item
of
Collateral hereunder.
4.
APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If
and to the extent necessary to enable the Pledgee to perfect
its
security interest in any of the Collateral or to exercise any
of
its remedies hereunder, the Pledgee shall have the right to
appoint one or more sub-agents for the purpose of retaining
physical possession of the Collateral, which may be held in
the
name of the Pledgor, endorsed or assigned in blank or in favor
of
the Pledgee or any nominee or nominees of the Pledgee or a
sub-
agent appointed by the Pledgee.
5. VOTING,
ETC., WHILE NO EVENT OF DEFAULT. Unless and
until there shall have occurred and be continuing an Event of
Default, the Pledgor shall be entitled to exercise any and
all
voting and other consensual rights pertaining to the
Collateral
owned by it, and to give consents, waivers or ratifications
in
respect thereof.
6. DIVIDENDS
AND OTHER DISTRIBUTIONS. All cash
dividends, cash distributions, cash Proceeds and other cash
amounts payable in respect of the Collateral (other than
proceeds
of any foreclosure in respect of the Collateral pursuant to
Section 7 hereof, which proceeds shall be distributed and
applied
as provided in Section 9 hereof) shall be received (a) by the
Pledgor, if no Event of Default shall have occurred and be
continuing and (b) by the Pledgee, if any Event of Default
shall
have occurred and be continuing (all of which amounts so
received
by the Pledgee to be delivered by the Pledgee to the
Administrative Agent for application toward prepayment of the
Secured Obligations). The Pledgee shall also be entitled
to
receive directly, and to retain as part of the Collateral:
(i) all other or additional capital stock or
other property (including, but not limited
to, cash
dividends other than as set forth above)
paid or distributed
by way of dividend or otherwise in respect
of the
Collateral;
(ii) all other or additional capital stock or
other property paid or distributed in
respect of the
Collateral by way of split, spin-off,
split-up,
reclassification, combination or similar
rearrangement;
(iii)all other or additional capital stock or
other property (including, but not limited
to, cash) which
may be paid in respect of the Collateral
by reason of any
consolidation, merger, exchange,
conveyance of assets,
liquidation or similar reorganization;
and
(iv) without limiting the generality of the
foregoing, all shares of Newco Stock
distributed in respect
of the Collateral.
Nothing
contained in this Section 6 shall limit or
restrict in any way the Pledgee's right to have pledged to it
proceeds of the Collateral in any form in accordance with
Section
3 of this Agreement. All dividends, distributions or
other
payments which are received by the Pledgor contrary to the
provisions of this Section 6 and Section 7 hereof shall be
received in trust for the benefit of the Pledgee, shall be
segregated from other property or funds of the Pledgor and
shall
be forthwith paid over to the Pledgee as Collateral in the
same
form as so received (with any necessary endorsement).
7. REMEDIES
IN CASE OF DEFAULT OR EVENT OF DEFAULT.
Subject to the Credit Agreement, if there shall have occurred
and
be continuing an Event of Default, the Pledgee shall be
entitled
to exercise all of the rights, powers and remedies (whether
vested in it by this Agreement, any other Financing Document
or
by law) for the protection and enforcement of its rights in
respect of the Collateral, and the Pledgee shall be entitled
to
exercise all the rights and remedies of a secured party under
the
Uniform Commercial Code as in effect in any relevant
jurisdiction
and also shall be entitled, without limitation, to exercise
the
following rights:
(i) to receive all amounts payable in respect of
the Collateral;
(ii) upon receipt of all requisite regulatory
approvals, to transfer all or any part of
the Collateral
into the Pledgee's name or the name of its
nominee or
nominees;
(iii)upon receipt of all requisite regulatory
approvals, to vote all or any part of the
Collateral
(whether or not transferred into the name
of the Pledgee)
and give all consents, waivers and
ratifications in respect
of the Collateral and otherwise act with
respect thereto as
though it were the outright owner thereof
(the Pledgor
hereby irrevocably constituting and
appointing the Pledgee
the proxy and attorney-in-fact of the
Pledgor, with full
power of substitution to do so) and to
exercise any and all
of the rights or powers of the Pledgor in
its capacity as a
stockholder of the Issuer;
(iv) at any time and from time to time to sell,
assign and deliver, or grant options to
purchase, all or any
part of the Collateral, or any interest
therein, at any
public or private sale, without demand of
performance,
advertisement or notice of intention to
sell or of the time
or place of sale or adjournment thereof or
to redeem or
otherwise (all of which are hereby waived
by the Pledgor to
the extent permitted by applicable Law),
for cash, on credit
or for other property, for immediate or
future delivery
without any assumption of credit risk,
and for such price or
prices and on such terms as the Pledgee in
its absolute
discretion may determine, in each case, to
the extent
permitted by applicable Law. The
Pledgee shall not be
obligated to make any such sale of
Collateral regardless of
whether any notice of sale has theretofore
been given. The
Pledgor hereby waives and releases to the
fullest extent
permitted by law any right or equity of
redemption with
respect to the Collateral, whether before
or after sale
hereunder (other than the right to pay the
Secured
Obligations in full), and all rights, if
any, of marshalling
the Collateral and any other security for
the Secured
Obligations or otherwise. At any
such sale, to the extent
permitted by applicable Law, the Pledgee
may bid for and
purchase all or any part of the Collateral
so sold free from
any such right or equity of
redemption. The Pledgee shall
not be liable for failure to collect or
realize upon any or
all of the Collateral or for any delay in
so doing nor shall
any of them be under any obligation to
take any action
whatsoever with regard thereto; and
(v) to set-off any and all Collateral against any
and all Secured Obligations and to apply
such Collateral to
the payment of any and all Secured
Obligations.
If, pursuant
to applicable Law, prior notice of any of
the foregoing actions is required to be given to the Pledgee,
the
Pledgee hereby acknowledges that the minimum time required by
such applicable Law, or if no minimum is specified, ten (10)
days, shall be deemed a reasonable notice period.
8. REMEDIES,
ETC., CUMULATIVE. Each and every right,
power and remedy of the Pledgee provided for in this Agreement
or
in any other Financing Document, or now or hereafter existing
at
law or in equity or by statute shall be cumulative and
concurrent
and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the
Pledgee
of any one or more of the rights, powers or remedies provided
for
in this Agreement or any other Financing Document or now or
hereafter existing at law or in equity or by statute or
otherwise
shall not preclude the simultaneous or later exercise by the
Pledgee of all such other rights, powers or remedies, and no
failure or delay on the part of the Pledgee to exercise any
such
right, power or remedy shall operate as a waiver thereof.
No
notice to or demand on the Pledgor in any case shall entitle
it
to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of
the
Pledgee to any other or further action in any circumstances
without notice or demand.
9.
APPLICATION OF PROCEEDS. All monies collected by
the Pledgee upon any sale or other disposition of the
Collateral
pursuant to the terms of this Agreement, together with all
other
monies received by the Pledgee hereunder, shall be applied at
the
written instruction of the Administrative Agent for
satisfaction
of the Secured Obligations in the order provided in the
Credit
Agreement.
10.
PURCHASERS OF COLLATERAL. Upon any sale of the
Collateral by the Pledgee hereunder (whether by virtue of the
power of sale herein granted, pursuant to judicial process or
otherwise), the receipt given by the Pledgee or the officer
making the sale shall be a sufficient discharge to the
purchaser
or purchasers of the Collateral so sold, and such purchaser
or
purchasers shall not be obligated to see to the application
of
any part of the purchase money paid over to the Pledgee or
such
officer or be answerable in any way for the misapplication or
nonapplication thereof.
11.
[OMITTED]
12.
CERTAIN LIMITATIONS (a) The Pledgee shall not be
obligated to perform or discharge any obligation of the
Pledgor
as a result of the pledge hereby effected.
(b)
The acceptance by the Pledgee of this Agreement,
with all the rights, powers, privileges and authority so
created,
shall not at any time or in any event obligate the Pledgee to
appear in or defend any action or proceeding relating to the
Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any
expenses or perform or discharge any obligation, duty or
liability under the Collateral.
13.
FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) At
any time and from time to time, upon the written request of
the
Pledgee, and at the sole expense of the Pledgor, the Pledgor
will
promptly and duly execute and deliver any and all such
further
instruments and documents and take such further action as the
Pledgee reasonably may deem appropriate in order to perfect
and
preserve the Pledgee's security interest in the Collateral and
in
order for the Pledgee to obtain the full benefits of this
Agreement and of the rights and powers herein granted,
including,
without limitation, the filing of any financing or
continuation
statements under the Uniform Commercial Code in effect in any
jurisdiction and the filing of any other equivalent or
similar
statement or document under any other applicable Law with any
other applicable Governmental Authority with respect to the
security interests granted hereby. The Pledgor also
hereby
authorizes the Pledgee to file any such financing or
continuation
statement without the signature of the Pledgor to the extent
permitted by applicable Law. If any amount payable under or
in
connection with any of the Collateral shall be or become
evidenced by any promissory note or other instrument, such
note
or instrument shall be immediately delivered to the Pledgee
and
pledged to the Pledgee hereunder, duly endorsed, to the
extent
necessary, to the Pledgee.
(b)
The Pledgor hereby appoints the Pledgee such
Pledgor's attorney-in-fact, with full authority in the place
and
stead of the Pledgor and in the name of the Pledgor or
otherwise,
to act from time to time, solely after the occurrence and
during
the continuance of an Event of Default and subject to the
Credit
Agreement, in the Pledgee's reasonable discretion to take any
action and to execute any instrument which the Pledgee may
deem
reasonably necessary or advisable to accomplish the purposes
of
this Agreement.
14.
[OMITTED]
15.
TRANSFER BY THE PLEDGOR. The Pledgor will not
sell or otherwise dispose of, grant any option with respect
to,
or mortgage, pledge or otherwise encumber any of the
Collateral
or any interest therein (except as may be permitted in
accordance
with the terms of the Financing Documents).
16.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. (a) The Pledgor represents, warrants and
covenants
that:
(i) it is the legal, beneficial and record owner
of, and has good and marketable title to,
all Collateral
consisting of Pledged Stock and it has all
rights in the
Collateral necessary for the security
interest purported to
be created hereunder to attach (subject,
in each case, to no
pledge, lien, security interest, charge,
option or other
encumbrance whatsoever, except the liens
and security
interests created by this
Agreement);
(ii) it has full power, authority and legal right
to pledge all the Collateral pledged by it
pursuant to this
Agreement;
(iii)this Agreement has been duly
authorized,
executed and delivered by the Pledgor and
constitutes a
legal, valid and binding obligation of the
Pledgor
enforceable against the Pledgor in
accordance with its
terms, except to the extent that the
enforceability hereof
may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other
similar laws generally
affecting creditors' rights and by
equitable principles
(regardless of whether enforcement is
sought in equity or at
law);
(iv) except to the extent already obtained or
made, no consent of any other party
(including, without
limitation, any stockholder or creditor of
the Pledgor or
the Issuer) and no consent, license,
permit, approval or
authorization of, exemption by, notice or
report to, or
registration, filing or declaration with,
any Governmental
Authority is required to be obtained by
the Pledgor in
connection with (a) the execution,
delivery or performance
of this Agreement, (b) the validity or
enforceability of
this Agreement, (c) the perfection or
enforceability of the
Pledgee's security interest in the
Collateral or (d) except
for compliance with or as may be required
by applicable
securities laws, the exercise by the
Pledgee of any of its
rights or remedies provided herein;
provided, that any
Person acquiring the voting securities of
the Issuer or
Newco may require prior approval from the
Federal Energy
Regulatory Commission and the California
Public Utilities
Commission.
(v) the execution, delivery and performance of
this Agreement will not violate any
provision of any
applicable Law or regulation or of any
order, judgment,
writ, award or decree of any court,
arbitrator or
Governmental Authority, domestic or
foreign, applicable to
the Pledgor, or of the certificate of
incorporation,
operating agreement, limited liability
company agreement,
partnership agreement or by-laws of the
Pledgor or of any
securities or other interests issued by
the Pledgor or the
Issuer, or of any mortgage, deed of trust,
indenture, lease,
loan agreement, credit agreement or other
material contract,
agreement or instrument or undertaking to
which the Pledgor
or the Issuer is a party or by which any
of its assets may
be bound and will not result in the
creation or imposition
of (or the obligation to create or impose)
any lien or
encumbrance on any of the assets of the
Pledgor or the
Issuer except as contemplated by this
Agreement;
(vi) all of the Collateral consisting of Pledged
Stock has been duly and validly issued and
acquired, is
fully paid and non-assessable and is
subject to no options
to purchase or similar rights; and
(vii)the pledge and collateral assignment to the
Pledgee of the Collateral consisting of
Pledged Stock,
together with continued possession by the
Pledgee of any
certificates, instruments, documents or
other writings
evidencing the Pledged Stock and/or the
making of relevant
filings or recordings and/or any other
action required to be
taken in accordance with Section 3.2 (all
of which have been
made or taken, as the case may be),
creates in favor of the
Pledgee a valid and perfected first
priority security
interest in such Collateral, and the
proceeds thereof,
subject to no prior Lien or encumbrance
(other than any
Permitted Lien that is a non-consensual
lien arising by
operation of law) or to any agreement
purporting to grant to
any third party a Lien or encumbrance
(other than any
Permitted Lien that is a non-consensual
lien arising by
operation of law, and other than the Lien
created by the
Utility Stock Pledge Agreement (35%)
– Continued Tranche B
Loan) on the property or assets of the
Pledgor which would
include the Pledged Stock and the Pledgee
is entitled to all
the rights, priorities and benefits
afforded by the Uniform
Commercial Code or other relevant law as
enacted in any
relevant jurisdiction to perfected
security interests in
respect of such Collateral.
(b)
The Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and
to
the Collateral and the proceeds thereof against the claims
and
demands of all persons whomsoever; and the Pledgor covenants
and
agrees that it will have like title to and right to pledge
any
other property at any time hereafter pledged to the Pledgee
as
Collateral hereunder and will likewise defend the right
thereto
and security interest therein of the Pledgee.
17.
JURISDICTION OF ORGANIZATION; NAME. The
Pledgor's name, jurisdiction of organization and
identification
number are set forth in Annex B hereto. The Pledgor will
not
change its name or its jurisdiction of organization, except
upon
15 days' prior written notice to the Collateral Agent and
delivery to the Collateral Agent of all additional executed
financing statements and other documents reasonably requested
by
the Collateral Agent to maintain the validity, perfection and
priority of the security interests provided for herein.
18.
PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The
obligations of the Pledgor under this Agreement shall be
absolute
and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any
circumstance
or occurrence whatsoever (except as provided under Section
20),
including, without limitation: (i) any renewal,
extension,
amendment or modification of or addition or supplement to or
deletion from any Financing Document or any other instrument
or
agreement referred to therein, or any assignment or transfer
of
any thereof; (ii) any waiver, consent, extension, indulgence
or
other action or inaction under or in respect of any such
agreement or instrument including, without limitation, this
Agreement; (iii) any furnishing of any additional security to
the
Pledgee or its assignee or any acceptance thereof or any
release
of any security by the Pledgee or its assignee (except as
provided under Section 20); (iv) any limitation on any
party's
liability or obligations under any such instrument or
agreement
or any invalidity or unenforceability, in whole or in part,
of
any such instrument or agreement or any term thereof; or (v)
any
bankruptcy, insolvency, reorganization, composition,
adjustment,
dissolution, liquidation or other like proceeding relating to
the
Pledgor or the Issuer, or any action taken with respect to
this
Agreement by any trustee or receiver, or by any court, in any
such proceeding, whether or not the Pledgor shall have notice
or
knowledge of any of the foregoing.
19.
REGISTRATION, ETC. (a) If there shall have
occurred and be continuing an Event of Default, then upon
receipt
by the Pledgor from the Pledgee of a written request or
requests
that the Pledgor cause any registration, qualification or
compliance under any Federal or state securities law or laws
to
be effected with respect to all or any part of the Collateral
consisting of Pledged Stock, the Pledgor as soon as
practicable
and at its expense will cause such registration to be
effected
(and be kept effective) and will cause such qualification and
compliance to be declared effected (and be kept effective) as
may
be so requested if such registration, qualification or
compliance
is necessary to permit or facilitate the sale and distribution
of
such Collateral, including, without limitation, registration
under the Securities Act, as then in effect (or any similar
statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and
appropriate compliance with any other government
requirements,
provided, that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may
reasonably
request in writing and as shall be required in connection
with
any such registration, qualification or compliance. The
Pledgor
will cause the Pledgee to be kept advised in writing as to
the
progress of each such registration, qualification or
compliance
and as to the completion thereof, will furnish to the Pledgee
such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time
may
reasonably request, and will indemnify the Pledgee and all
others
participating in the distribution of such Collateral against
all
claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration
statement, notification or the like) a material fact required
to
be stated therein or necessary to make the statements therein
not
misleading, except insofar as the same may have been caused by
an
untrue statement or omission based upon information furnished
in
writing to the Pledgor by the Pledgee expressly for use
therein.
(b) If
at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Collateral
consisting of Pledged Stock pursuant to Section 7 hereof, and
the
Collateral or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the
Securities
Act, as then in effect, the Pledgee may sell such Collateral
or
part thereof, as the case may be, by private sale in such
manner
and under such circumstances as the Pledgee may deem necessary
or
reasonably advisable in order that such sale may legally be
effected without such registration. Without limiting
the
generality of the foregoing, in any event the Pledgee (i) may
proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such
Collateral or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single
possible purchaser to effect such sale, and (iii) may
restrict
such sale to a purchaser who will represent and agree that
such
purchaser is purchasing for its own account, for investment,
and
not with a view to the distribution or sale of such Collateral
or
part thereof. In the event of any such sale, the Pledgee
shall
incur no responsibility or liability, except to the extent
incurred by reason of its gross negligence, bad faith or
willful
misconduct, for selling all or any part of the Collateral at
a
price which the Pledgee, in its sole and absolute discretion,
deems reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been
realized if the sale were deferred until after registration
as
aforesaid.
20.
TERMINATION; RELEASE. After payment in full
of
the Secured Obligations and termination of the Credit
Agreement,
this Agreement and the security interest created hereby shall
terminate (provided that all indemnities set forth herein
including, without limitation, in Section 11 hereof shall
survive
any such termination), and the Pledgee, at the request and
expense of the Pledgor, will execute and deliver to the Pledgor
a
proper instrument or instruments acknowledging the
satisfaction
and termination of this Agreement, and will duly assign,
transfer
and deliver to the Pledgor (without recourse and without any
representation or warranty) such of the Collateral as has not
theretofore been sold or otherwise applied or released
pursuant
to this Agreement, together with any monies at the time held
by
the Pledgee or any of its sub-agents hereunder.
21.
NOTICES, ETC. All notices, requests, demands or
other communications hereunder shall be made in the manner
and
with the effect provided in Section 9.3 of the Credit
Agreement
at the addresses provided below or at such other address as
shall
have been furnished in writing by the relevant Person to the
party required to give notice hereunder:
(a) If
to the Pledgor, at:
PG&E Corporation
Xxx Xxxxxx, Xxxxx Xxxxx Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Assistant Treasurer
Tel.: (000) 000-0000
Fax.: (000) 000-0000
(b) If
to the Pledgee, at:
Deutsche Bank Trust Company Americas
Corporate Trust and Agency Services
000 Xxxxx Xxx, XX: 0603
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx Day
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to the Administrative Agent at:
Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx/Xxxx Xxxxxx
Tel: (000) 000-0000/(000) 000-0000
Fax: (000) 000-0000/(000) 000-0000
22.
WAIVER; AMENDMENT. None of the terms and
conditions of this Agreement may be changed, waived, modified
or
varied in any manner whatsoever unless in writing duly signed
by
the Pledgor and the Pledgee.
23.
MISCELLANEOUS. This Agreement shall be binding
upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of and be enforceable
by
each of the parties hereto and its successors and assigns,
provided that the Pledgor may not assign any of its rights or
obligations under this Agreement without the prior consent of
the
Pledgee. The headings in this Agreement are for purposes
of
reference only and shall not limit or define the meaning
hereof.
This Agreement may be executed in any number of
counterparts,
each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision
of
this Agreement shall prove to be invalid or unenforceable,
such
provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on
all
parties hereto. The rights, powers, privileges and immunities
of
the Collateral Agent set forth in the Credit Agreement shall
apply to the Collateral Agent as if expressly set forth
herein.
24.
GOVERNING LAW. THIS AGREEMENT, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE AND MATTERS
RELATING TO THE CREATION, VALIDITY, ENFORCEMENT OR PRIORITY
OF
THE SECURITY INTERESTS CREATED BY THIS AGREEMENT, SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO
THE CONFLICT OF LAWS RULES THEREOF (OTHER THAN SECTION 5-1401
OF
THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT AS MAY BE
REQUIRED
BY OTHER MANDATORY PROVISIONS OF LAW.
25.
WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT
ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION
WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY
PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A
MATERIAL
INDUCEMENT FOR THE LENDERS TO ENTER INTO THE CREDIT AGREEMENT
AND
THE OTHER FINANCING DOCUMENTS.
IN WITNESS
WHEREOF, the Pledgor, the Pledgee, the
Administrative Agent have caused this Agreement to be executed
by
their duly elected officers duly authorized as of the date
first
above written.
PLEDGOR
PG&E CORPORATION
XXXXX X. XXXXXX
By
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Chief Financial Officer
ADMINISTRATIVE AGENT
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
XXXXX X. XXXXX, XX.
By
Name: Xxxxx X. Xxxxx,Xx.
Title: Authorized Signatory
PLEDGEE
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent
XXXXXXX XXXXX DAY
By
Name: Xxxxxxx Xxxxx Day
Title: Vice President
_____________________________________________________________________
ANNEX
A
to
PLEDGE AGREEMENT
LIST OF PLEDGED STOCK
Number
Name
of Type
of
of
Certificate No.
Issuer
Interest Shares
Pacific Gas
and
Common
105,641,741
ZQU10
Electric
Company
Stock
______________________________________________________________________
ANNEX B
to
PLEDGE AGREEMENT
Name of
Pledgor:
PG&E Corporation
Jurisdiction of Organization: California
Identification Number:
C1953580
