Contract
Exhibit 4.1
EXECUTION COPY
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST
SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture"),
dated as of October 18, 2002, is entered into by and between
PG&E CORPORATION, a
California Corporation (the "Company"), and U.S. BANK, N.A., a
national banking
association, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee entered into an Indenture,
dated as of
June 25, 2002 (the "Indenture"), pursuant to which the Company
issued its 7.50%
Convertible Subordinated Notes due 2007 (the "2007 Securities")
(capitalized terms used
herein without definition shall have the respective meanings
ascribed to them in the
Indenture);
WHEREAS, Section 10.2 of the Indenture provides, among other
things, that the
Indenture may be amended or supplemented by the Company and the
Trustee with the written
consent of the Holders of at least a majority of the principal
amount of the Securities;
and
WHEREAS, the undersigned Holders collectively own 100% of the
principal
amount of the Securities presently outstanding;
NOW THEREFORE, in consideration of the foregoing and for other good
and
valuable consideration, the receipt of which is hereby
acknowledged, the Company and the
Trustee hereby agree as follows:
ARTICLE 1
SUPPLEMENTS AND AMENDMENTS
Section 1.1. The Indenture is hereby
amended by the deletion of the text
"7.50% Convertible Subordinated Notes due 2007" in each place it
appears in the Indenture
(including, for the avoidance of doubt, in the exhibits thereto),
and insertion of the
text "9.50% Convertible Subordinated Notes due 2010" in lieu
thereof.
Section 1.2. Section 1.1 of the Indenture
is hereby amended by the
insertion of the following new definition "NEG" immediately after
the definition of
"Majority Holders":
"'NEG' shall mean PG&E National Energy Group, LLC, a Delaware
limited
liability company."
Section 1.3. The definition of "Restricted
Security" set forth in
Section 1.1 of the Indenture is hereby amended by the deletion of
the text "Exhibits A
and B " and the insertion of the text "Exhibits A, B and C" in lieu
thereof.
Section 1.4.
The definition of "Stated Maturity" set forth in the
Indenture is hereby amended by the deletion of the text "June 30,
2007" and the insertion
of the text "June 30, 2010" in lieu thereof.
Section 1.5. Section 3.1 of the Indenture
is hereby amended by the
deletion of the text "POR Spin-Off" and the insertion of the text
"the Spin Off of POR
Spin Co" in lieu thereof in section (iv) of the definition of
"Change of Control."
Section 1.6. Section 7.1(2) of the
Indenture is hereby amended by
inserting the text "or Section 13.1" after the text "Section 3.1"
in the third line
thereof.
Section 1.7. Sections 7.1(5), 7.1(6) and
7.1(7) of the Indenture are
hereby amended by inserting the following text after each time the
text "Significant
Subsidiary" appears: "(other than NEG and NEG's
Subsidiaries)."
Section 1.8. Section 11.7(b) of the
Indenture is hereby amended by
inserting the text ", commencing on the earlier of (i) the date one
year after the date
hereof and (ii) the effective date of the Shelf Registration
Statement (as defined in the
Registration Rights Agreement)" after the text "The Company further
covenants that" in
the second sentence thereof.
Section 1.9. The Indenture is hereby
amended by inserting the following
new Article XIII:
"ARTICLE XIII
REPURCHASE AT OPTION OF HOLDER
Section 13.1
Purchase of Securities at Option of the Holder on Purchase
Date.
Upon delivery of the Purchase Notice pursuant to Section 13.2, each
Holder shall have the
right, at the Holder's option, to require the Company to
repurchase, and upon the valid
exercise of such right the Company shall repurchase, on June 30,
2007 (and only on such
date) (the "Purchase Date"), all of such Holder's Securities, or
any portion of the
principal amount thereof; provided, that no single Security may be
repurchased in part
unless the portion of the principal amount of such Security to be
outstanding after such
repurchase is equal to an integral multiple of $1,000 (or any
integral multiple of $1.00
in the case of a PIK Security) for a purchase price equal to the
principal amount plus
accrued and unpaid interest, including any Liquidated Damages and
Pass-Through Dividends,
if any, payable with respect to such Security on the Purchase Date
(the "Purchase Price")
and subject to satisfaction by or on behalf of the Holder of the
requirements set forth
in Section 13.2.
Section
13.2 Exercise of Rights. A Holder may
exercise its rights
specified in Section 13.1 by delivering a written notice of
purchase (a "Purchase
Notice") to the Paying Agent at any time no earlier than 90 days
nor later than 60 days
prior to the Purchase Date, specifying:
(1) the certificate number of the Security which the Holder
will
deliver to be purchased;
(2) the portion of the principal amount of the Security which
the
Holder will deliver to be purchased; and
(3) that such Security shall be purchased pursuant to the
terms and
conditions specified in Section 5 of the Securities and in this
Indenture.
The delivery of such Security to the Paying Agent with the Purchase
Notice
(together with all necessary endorsements) at the offices of the
Paying Agent shall be a
condition to the receipt by the Holder of the Purchase Price
therefor.
Any purchase by the Company contemplated pursuant to the provisions
of
Section 13.1 and this Section 13.2 shall be consummated by the
delivery by the Paying
Agent of the consideration to be received by the Holder on the
Purchase Date.
Notwithstanding anything herein to the contrary, any Holder
delivering to the
Paying Agent the Purchase Notice contemplated by this Section 13.2
shall have the right
to withdraw such Purchase Notice at any time prior to the close of
business on the day
which is 8 Business Days immediately preceding the Purchase Date by
delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section
13.3.
The Paying
Agent shall promptly notify the Company of the receipt by it
of
any Purchase Notice or written withdrawal thereof.
Section 13.3 Effect of Purchase Notice;
Withdrawal. Upon receipt by the
Paying Agent of a Purchase Notice as specified in Section 13.2, the
Holder of the
Security in respect of which such Purchase Notice was given shall
(unless such Purchase
Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled
to receive solely the Purchase Price with respect to such
Security. Such Purchase Price
shall be paid to such Holder by the Paying Agent, (subject to the
deposit of funds with
the Paying Agent pursuant to Section 13.4), promptly following the
later of (x) the
Purchase Date with respect to such Security (provided the
conditions in Section 13.2 have
been satisfied) and (y) the time of delivery of such Security to
the Paying Agent by the
Holder thereof in the manner required by Section 13.2.
Securities in respect of which a
Purchase Notice has been given by the Holder thereof may not be
converted pursuant to
Article 11 hereof on or after the date of the delivery of such
Purchase Notice unless
such Purchase Notice has first been validly withdrawn as specified
in the following two
paragraphs.
A Purchase Notice may be withdrawn, in whole or in part, by means
of a
written notice of withdrawal delivered to the office of the Paying
Agent at any time
prior to the close of business on the day which is 8 Business Days
immediately preceding
the Purchase Date, specifying:
(1) the certificate number, if any, of the Security in
respect of which
such notice of withdrawal is being submitted;
(2) the principal amount of the Security with respect to
which such notice
of withdrawal is being submitted; and
(3) the principal amount, if any, of such Security which
remains subject to
the original Purchase Notice, and which has been or will be
delivered for purchase by the
Company.
The Paying Agent will promptly return to the respective Holders
thereof any
Securities with respect to which a Purchase Notice has been
withdrawn in compliance with
this Indenture, in which case, upon such return, the Purchase
Notice with respect thereto
shall be deemed to have been withdrawn.
Section 13.4 Deposit of Purchase Price. On or
before the Purchase Date,
the Company shall deposit with the Paying Agent an amount of money
sufficient to pay the
Purchase Price of all the Securities or portions thereof which are
to be purchased as of
the Purchase Date.
Section 13.5 Securities
Purchased in Part. Any Security which is to be
purchased only in part pursuant to the provisions of this Article
XIII shall be
surrendered to the Paying Agent (with, if the Company or the
Trustee so requires, due
endorsement by, or a written instrument of transfer in form
satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly
authorized in writing) and the Paying Agent shall deliver such
Security to the Company.
The Company shall execute, and the Trustee shall authenticate and
deliver to the Holder
of such Security, without service charge, a new Security or
Securities, of any authorized
denomination as requested by such Holder, in an aggregate principal
amount equal to and
in exchange for the portion of the principal of the Security so
surrendered but not
purchased; provided, however that each such new Security will be in
a principal amount of
$1,000 or integral multiple thereof (or any integral multiple of
$1.00 in the case of a
PIK Security).
Section 13.6 Covenant to Comply With
Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section
13.1 hereof, the Company
shall, to the extent required by applicable law, (i) comply with
Rule 13e-4 and Rule
14e-1 (or any successor provision) under the Exchange Act, (ii)
file the related Schedule
TO (or any successor schedule, form or report) under the Exchange
Act, and (iii)
otherwise comply with all Federal and state securities laws so as
to permit the rights
and obligations under Article XIII to be exercised in the time and
in the manner
specified herein.
Section 13.7 Repayment to the
Company. The Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed as
provided in Section 11 of
the Securities, held by them for the payment of the Purchase Price;
provided, however,
that to the extent that the aggregate amount of cash deposited by
the Company pursuant to
Section 13.4 exceeds the aggregate Purchase Price of the Securities
or portions thereof
which the Company is obligated to purchase as of the Purchase Date,
then, unless
otherwise agreed in writing with the Company, promptly after the
Business Day following
the Purchase Date, the Trustee shall return any such excess to the
Company together with
interest thereon (subject to the provisions of Section
8.1(f))."
Section
1.10. The Indenture is hereby amended by the
substitution of
Exhibits A, B and C thereto with new Exhibits A, B and C in the
respective forms attached
to this First Supplemental Indenture as Exhibits A, B and C.
The 2007 Securities
outstanding on the date this First Supplemental Indenture becomes
effective pursuant to
Section 2.2 below, shall be exchanged by the Trustee pursuant to
Section 10.5 of the
Indenture for the form of Security attached hereto as Exhibit
C.
ARTICLE 2
MISCELLANEOUS
Section 2.1. This First Supplemental
Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall
be construed in
connection with and as part of, the Indenture for any and all
purposes.
Section 2.2. This First Supplemental
Indenture shall become effective
immediately upon its execution and delivery by each of the Company,
the Trustee and by
each of the Holders.
Section 2.3. Except as specifically
modified herein, the Indenture and
the Securities are in all respects ratified and confirmed and shall
remain in full force
and effect in accordance with their terms.
Section 2.4. Except as otherwise expressly
provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed
to be assumed, by the
Trustee by reason of this First Supplemental Indenture. This
First Supplemental
Indenture is executed and accepted by the Trustee subject to all
the terms and conditions
set forth in the Indenture with the same force and
effect.
Section 2.5. THIS FIRST SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 2.6. The parties may sign any
number of copies of this First
Supplemental Indenture. Each signed copy shall be an
original, but all of them together
represent the same agreement. One signed copy is enough to
prove this First Supplemental
Indenture.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed
this First Supplemental Indenture on behalf of the respective
parties hereto as of the
date first above written.
PG&E CORPORATION
By:
Name:
Title:
U.S. BANK, N.A., as Trustee
By:
Name:
Title:
Acknowledged and consented to:
CITADEL CREDIT TRADING LTD.
By:
Principal amount of
Name:
Securities owned:
$
Title:
XXXXXXX INVESTMENT FUND LTD.
By:
Principal amount of
Name:
Securities owned:
$
Title:
CITADEL EQUITY FUND LTD.
By:
Principal amount of
Name:
Securities owned:
$
Title:
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
INDENTURE REFERRED TO ON
THE REVERSE HEREOF.
PG&E CORPORATION
9.50% Convertible Subordinated Notes due 2010
No.
CUSIP:
Issue Date: ______,
20__ Principal Amount:
$
PG&E CORPORATION, a California corporation, promises to pay to
Cede & Co. or
registered assigns, the principal amount of _____________________
dollars ($__________)
on June 30, 2010.
Interest Payment Dates: June 30 and December 31, commencing December 31, 2002.
Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Security
set forth on
the reverse side of this Security, which further provisions shall
for all purposes have
the same effect as if set forth at this place.
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed
under its corporate seal.
Dated: _____, 20__ PG&E CORPORATION
By:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. BANK, N.A.,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated: _______ __, 20__
[FORM OF REVERSE OF GLOBAL SECURITY]
9.50% Convertible Subordinated Notes due 2010
This
Security is one of a duly authorized issue of 9.50% Convertible
Subordinated
Notes due 2010 (the "Securities") of PG&E Corporation, a
California corporation
(including any successor corporation under the Indenture
hereinafter referred to, the
"Company"), issued under an Indenture, dated as of June 25, 2002
(together with any
supplemental indenture thereto, including the First Supplemental
Indenture, dated as of
October 18, 2002, the "Indenture"), between the Company and
U.S. Bank, N.A., as trustee
(the "Trustee"). The terms of the Security include those
stated in the Indenture, those
made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended
("TIA"), and those set forth in this Security. This Security
is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a
statement of all such
terms. To the extent permitted by applicable law, in the
event of any inconsistency
between the terms of this Security and the terms of the Indenture,
the terms of the
Indenture shall control. Capitalized terms used but not
defined herein have the meanings
assigned to them in the Indenture referred to below unless
otherwise indicated.
1. Interest
The
Company promises to pay interest on the principal amount of the
Securities at
the interest rate of 7.50% (the "Prior Interest Rate") from June
25, 2002 until October
18, 2002 and interest at the interest rate of 9.50% (the "Interest
Rate") from October
19, 2002 until repayment in full at June 30, 2010, or until an
earlier repurchase. The
Company promises to pay interest on any PIK Security issued by the
Company at the
Interest Rate from the date of issuance of such PIK Security until
repayment in full at
June 30, 2010, or until an earlier repurchase. The Company
will pay Interest on this
Security semi-annually in arrears on June 30 and December 31 of
each year (each, an
"Interest Payment Date"), commencing December 31, 2002.
Interest on the Securities shall be computed (i) for any full
semi-annual period
for which a particular Interest Rate is applicable, on the basis of
a 360-day year of
twelve 30-day months and (ii) for any period for which a particular
Interest Rate is
applicable for less than a full semiannual period for which
Interest is calculated, on
the basis of a 30-day month and, for such periods of less than a
month, the actual number
of days elapsed over a 30-day month.
The
Company shall have the right, at any time and from time to time,
during the
term of the Securities, to make payments of interest on any
Interest Payment Date prior
to the Maturity Date or to make payments on any accrued Liquidated
Damages by issuing
additional 9.50% Convertible Preferred Notes due 2010 (the "PIK
Securities"), on not less
than 30 days (and not more than 45 days) notice to the Trustee and
notice to the Holders
(the "PIK Notice") prior to each such Interest Payment Date;
provided that on the
Maturity Date the Company shall be required to pay all accrued and
unpaid interest on the
Securities, and any outstanding Liquidated Damages, in cash, and no
PIK Notice shall be
given with respect to such last interest payment date. The
PIK Securities shall be
issued under the Indenture and, except to the extent set forth in
Section 2.14 of the
Indenture, shall in all respects be identical to the originally
issued Securities.
No
PIK Securities may be issued in denominations of less than $1.00 of
principal
amount (and such PIK Securities must be issued in integral
multiples of $1.00) and no
fractional PIK Securities may be issued in lieu of cash interest
pursuant to the fourth
paragraph of this Section 1 and the Company shall, instead, pay a
cash adjustment in the
same manner as provided in the Indenture with respect to the
conversion of Securities in
shares of Common Stock.
If
this Security is repurchased by the Company on a date that is after
the record
date and prior to the corresponding Interest Payment Date, interest
and additional
amounts, if any, accrued and unpaid hereon to but not including the
applicable Change of
Control Purchase Date, as the case may be, will be paid to the same
Holder to whom the
Company pays the principal of this Security.
A
Holder of any Security at the close of business on a record date
will be entitled
to receive interest (including Liquidated Damages, if any) on such
Security on the
corresponding Interest Payment Date. Interest on Securities
converted after a record
date but prior to the corresponding Interest Payment Date (other
than any Security whose
maturity is prior to such Interest Payment Date) will be paid to
the Holder of the
Securities on the record date but, upon conversion, the Holder must
pay the Company the
interest, Liquidated Damages and Pass-Through Dividends, if any,
which have accrued and
will be paid on such Interest Payment Date upon receipt of such
amounts from the Company.
If
the principal amount hereof or any portion of such principal amount
or any
interest, including the payment of Liquidated Damages and
Pass-Through Dividends, if any,
on any Security is not paid when due (whether upon acceleration
pursuant to Section 7.2
of the Indenture, upon the date set for repurchase pursuant to
Section 13.1 of the
Indenture, upon the date set for payment of the Change of Control
Purchase Price pursuant
to Section 6 hereof or upon the Stated Maturity of this Security),
then in each such case
the overdue amount shall, to the extent permitted by law, bear
interest at 1% over the
then currently applicable rate, compounded semi-annually, which
interest shall accrue
from the date on which such overdue amount was originally due to
the date of payment of
such amount, including interest thereon, has been made or duly
provided for. All such
interest shall be payable on demand.
Subject to the record date provisions described in the Indenture,
the Company shall
pay to each Holder an amount per Security equal to the Cash
Dividends, if any, paid by
the Company per share of Common Stock multiplied by the principal
amount of such Security
divided by the Conversion Price in effect on the record date for
such payment. Pass-
Through Dividends, if any,
will be payable on the payment date of each such Pass-Through
Dividend to Holders as of the record date for determination of the
stockholders entitled
to receive each such Pass-Through Dividend.
2. Method of Payment.
Except as provided below, interest and Liquidated Damages will be
paid (i) on
Global Securities to DTC in immediately available funds or (ii) on
Certificated
Securities, to the person in whose name Securities are registered
at the close of
business on the record date, (a) on any Certificated Securities
having an aggregate
principal amount of $5,000,000 or less, by check mailed to the
Holders of such
Securities; (b) on any Certificated Securities having an aggregate
principal amount of
more than $5,000,000, by wire transfer in immediately available
funds at the election of
the Holders of those Securities; and (c) in the case of interest or
Liquidated Damages
payable in kind, by deposit or delivery of PIK
Securities.
At
Stated Maturity the Company will pay principal and interest in cash
on
Securities at the Company's office for payment, which initially
will be the Corporate
Trust Office of the Trustee.
Subject to the terms and conditions of the Indenture, the Company
will make
payments in cash in respect of the Change of Control Purchase Price
and amounts payable
at Stated Maturity to Holders who surrender Securities to the
Paying Agent to collect
such payments in respect of the Securities. The Company will pay
cash amounts in money of
the United States that at the time of payment is legal tender for
payment of public and
private debts. However, the Company may make such cash
payments by check payable in such
money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, U.S. Bank, N.A. (the "Trustee") will act as Paying
Agent, Conversion
Agent and Registrar. The Company may appoint and change any of the
Paying Agent,
Conversion Agent or Registrar without notice, other than notice to
the Trustee. Neither
the Company nor any of its
Subsidiaries nor any of their Affiliates may act as Paying
Agent, Conversion Agent or Registrar.
4. Indenture.
This
Security is one of a duly authorized issue of Securities of the
Company
designated as its 9.50% Convertible Subordinated Notes due 2010,
issued under the
Indenture. The terms of this Security include those stated in
the Indenture and those
required by or made part of the Indenture by reference to the Trust
Indenture Act of
1939, as amended, as in effect on the date of the Indenture.
This Security is subject to
all such terms, and the Holder of this Note is referred to the
Indenture and said Act for
a statement of them.
The
Securities are general unsecured subordinated obligations of the
Company
limited to $280,000,000. Notwithstanding the foregoing, the
aggregate principal amount of
the Securities aggregate principal amount permitted to be
outstanding at any time may
exceed the amount set forth in the foregoing sentence only by an
amount sufficient to
permit payments of interest or Liquidated Damages in PIK Securities
as provided for in
the Indenture.
5. Purchase By the Company at the Option of the Holder.
Upon
the valid delivery of the Purchase Notice no earlier than 90 days
and no later
than 60 days prior to June 30, 2007, the Holder shall have the
right, at the option of
the Holder, and subject to the terms and conditions of the
Indenture, to require the
Company to repurchase, and the Company shall become obligated to
repurchase, on June 30,
2007 (and only on such date), the Securities held by such Holder or
any portion of the
principal amount hereof, provided that the portion of the principal
amount of the
Security to be outstanding after such purchase is at least equal to
$1,000 (or in the
case of a PIK Security, at least an integral multiple of $1.00) for
a purchase price
equal to the principal amount plus accrued and unpaid interest,
including any Liquidated
Damages and Pass-Through Dividends, if any, payable with respect to
such Security. The
Purchase Price shall be paid in cash.
6. Purchase By the Company at the Option of the Holder upon Change of Control.
At
the option of the Holder by provision of a Change of Control
Purchase Notice and
subject to the terms and conditions of the Indenture, the Company
shall become obligated
to offer to purchase the Securities held by such Holder or any
portion of the principal
amount hereof that is at least an integral multiple of $1,000 (or
in the case of any PIK
Security, at least an integral multiple of $1.00), within 30 days
after the occurrence of
a Change of Control of the Company for a Change of Control Purchase
Price equal to the
principal amount plus accrued and unpaid interest, including any
Liquidated Damages and
Pass-Through Dividends, if any, payable with respect to such
Security on the Change of
Control Purchase Date. The Change of Control Purchase Date
shall be no earlier than 30
days nor later than 60 days after the delivery of the notice
described in the preceding
sentence. The Change of Control Purchase Price shall be paid in
cash.
Holders have the right to withdraw any Change of Control Purchase
Notice, as the
case may be, by delivering to the Paying Agent a written notice of
withdrawal in
accordance with the provisions of the Indenture.
If
cash sufficient to pay the Change of Control Purchase Price of all
Securities or
portions thereof to be purchased as of the Change of Control
Purchase Date is deposited
with the Paying Agent, on the Business Day following the Change of
Control Purchase Date,
interest will cease to accrue on such Securities (or portions
thereof) (including
Liquidated Damages and Pass-Through Dividends, if any) immediately
after such Change of
Control Purchase Date, and the Holder thereof shall have no other
rights as such other
than the right to receive the Change of Control Purchase Price upon
surrender of such
Security.
7. Conversion.
(a) Subject to and in compliance with the provisions of the
Indenture, a Holder
shall have the right, at such Holder's option, to convert all or
any portion, if the
portion to be converted is $1,000 or an integral multiple $1,000
(or, in the case of a
PIK Security, the portion to be converted may be $1.00 or an
integral multiple of $1.00),
of such security into fully paid and nonassessable shares of Common
Stock at the
Conversion Price in effect on the Conversion Date.
(b) No Holder may convert any Security to the extent that,
immediately following
any such conversion and upon receipt of any shares of Common Stock
issuable upon such
conversion, such Holder would either (i) become or be included in
any person, including
any syndicate or group deemed to be a "person" under Section
13(d)(3) of the Exchange
Act, that is the single largest holder of voting power represented
by the Company's
capital stock (or otherwise become the single largest holder of the
Common Stock) (the
"Shareholder Limitation") or (ii) beneficially own or be included
in any "person" that
beneficially owns in excess of 4.9% of the voting power represented
by the Company's
capital stock (or otherwise beneficially own in excess of 4.9% of
the outstanding Common
Stock) (the "4.9% Limitation") after, in either case, giving effect
to such conversion
(the Shareholder Limitation and the 4.9% Limitation are
collectively referred to herein
as the "Conversion Limitations"). The determinations of the number
of shares that (i)
constitute 4.9% of the outstanding Common Stock or voting power and
(ii) are held by the
largest holder will be made in reliance upon the information
contained in publicly
available filings made with the SEC unless the Company is aware
that such information is
incorrect and has made the correct information public and disclosed
such information to
the Holders at the time of any such proposed conversion. In order
to facilitate
compliance with the foregoing, each Holder will be required to make
a representation that
it and its Affiliates will comply with the Conversion Limitations
immediately after
converting any Security and receipt of any shares of Common Stock
issuable upon such
conversion.
(c) Notwithstanding the Shareholder Limitation, however, a
Holder may convert
Securities that would otherwise cause such Holder to hold shares of
Common Stock in
excess of the Shareholder Limitation if, as to such excess number
of shares of Common
Stock, (the "Excess Shares"), such Holder (i) irrevocably covenants
to the Company to
sell such Excess Shares within 10 days after the date of conversion
and (ii) confirms
that it has, on or prior to such conversion date, entered into a
binding arrangement to
sell the Excess Shares within 10 days after such conversion date
either (a) in a regular
way transaction on a national securities exchange (or the principal
market where the
shares of Common Stock are then traded) or (b) to one or more
persons that are not
"affiliates" (used herein as defined in Rule 144 promulgated under
the Securities Act) of
such Holder ("Third Parties"), each of whom represents for the
benefit of the company
that, upon purchase of the applicable Excess Shares, such Third
Party, together with its
affiliates, will not be the beneficial owner of a number of shares
of Common Stock in
excess of the Shareholder Limitation. In addition, such
Holder, by converting its
securities, shall be deemed to agree to vote the applicable Excess
Shares only in
accordance with the recommendations of the Board of Directors of
the Company or any Third
Party that has agreed to purchase such shares, if any record date
for a vote of the
Common Stock is established for any day between the conversion date
and the consummation
of the sale of the applicable Excess Shares. The Shareholder
Limitation will cease to
have any force and effect upon consummation of a Spin-Off of POR
Spin-Co, if, on the date
that is 14 days after delivery to the Company of a request by the
Majority Holders to
such effect (which request may be given no more than once during
any 180-day period), the
Company shall not have delivered a certificate to the Holders
stating that the removal of
the Shareholder Limitation would, in the good faith judgment of the
Company, not be
consistent with the applicable regulatory or other legal
requirements.
A
Security in respect of which a Holder has delivered a Change of
Control Purchase
Notice, exercising the option of such Holder to require the Company
to purchase such
Security, may be converted only if such Change of Control Purchase
Notice is withdrawn in
accordance with the terms of the Indenture.
The
initial Conversion Price shall be $15.0873, subject to adjustment
in certain
events described in the Indenture.
To
surrender a Security for conversion, a Holder must (1) complete and
manually
sign the conversion notice below (or complete and manually sign a
facsimile of such
notice) and deliver such notice to the Conversion Agent, (2)
surrender the Security to
the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents and (4)
pay any transfer or similar tax, if required.
No
fractional shares of Common Stock shall be issued upon conversion
of any
Security. Instead of any fractional share of Common Stock
that would otherwise be issued
upon conversion of such Security, the Company shall pay a cash
adjustment as provided in
the Indenture.
If
the Company (i) is a party to a consolidation, merger or binding
share exchange,
(ii) reclassifies the Common Stock or (iii) conveys, transfers or
leases its properties
and assets substantially as an entirety to any Person, the right to
convert a Security
into shares of Common Stock may be changed into a right to convert
it into securities,
cash or other assets of the Company or such other Person, in each
case in accordance with
the Indenture.
8. Subordination of Securities.
The
indebtedness evidenced by the Securities is, to the extent and in
the manner
provided in Article 5 of the Indenture, expressly subordinate and
subject in right of
payment to the prior payment in full of all Senior Debt of the
Company, as defined in the
Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and
this Security is issued subject to the provisions of the Indenture
with respect to such
subordination. Each Holder of this Security, by accepting the
same, agrees to and shall
be bound by such provisions and authorizes the Trustee on its
behalf to take such action
as may be necessary or appropriate to effectuate the subordination
so provided and
appoints the Trustee his or her attorney-in-fact for such
purpose.
No
reference herein to the Indenture and no provision of this Security
or of the
Indenture shall alter or impair the obligation of the Company,
which is absolute and
unconditional, to pay the principal of and interest (including the
Change of Control
Purchase Price, Liquidated Damages or Pass-Through Dividends, if
any) on this Security at
the place, at the respective times, at the rate and in the coin or
currency herein
prescribed.
9. Denominations; Transfer; Exchange.
The
Securities are in fully registered form, without coupons, in
denominations of
$1,000 of principal amount and integral multiples of $1,000 (or in
the case of PIK
Securities, denominations of $1.00 of principal amount and integral
multiples of $1.00).
A Holder may register, transfer or exchange of Securities in
accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish
appropriate endorsements, legal opinions and transfer documents and
to pay any taxes and
fees required by law or permitted by the Indenture. The
Registrar need not transfer or
exchange any Securities in respect of which a Change of Control
Purchase Notice has been
given and not withdrawn.
10. Persons Deemed Owners.
The
registered Holder of this Security shall be treated as the owner of
this
Security for all purposes.
11. Unclaimed Money or Securities.
The
Trustee and the Paying Agent shall pay to the Company upon written
request any
money held by them for the payment of any amount with respect to
the Securities that
remains unclaimed for two years after the date upon which such
payment shall have been
due. After payment to the Company, Holders entitled to the
money or securities must look
to the Company for payment as general creditors unless an
applicable abandoned property
law designates another person after the date upon which such
payment shall have become
due.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the
Securities may be amended with the written consent of the Holders
of at least a majority
in aggregate principal amount of the outstanding Securities and
(ii) certain Defaults may
be waived with the written consent of the Holders of a majority in
aggregate principal
amount of the outstanding Securities. The Indenture and the
Securities may also be
amended by the Company and the Trustee, without the consent of any
Holder, in certain
circumstances set forth in the Indenture; provided, that certain
provisions of the
Indenture and the Securities may not be amended without the consent
of each affected
Holder.
13. Defaults and Remedies.
If
any Event of Default with respect to the Securities shall occur and
be
continuing, the principal of all the Securities may be declared due
and payable in the
manner and with the effect provided in the Indenture.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture,
in its individual or any other
capacity, may become the owner or pledgee of Securities
and may otherwise deal with and collect obligations owed to it by
the Company or its
Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights
it would have if it were not Trustee.
15. No Recourse Against Others.
A
director, officer, employee or shareholder, as such, of the Company
shall not
have any liability for any obligations of the Company under the
Securities or the
Indenture or for any claim based on, in respect of or by reason of
such obligations or
their creation. By accepting a Security, each Securityholder
waives and releases all
such liability. The waiver and release are part of the
consideration for the issue of the
Securities.
16. Authentication.
This
Security shall not be valid until an authorized signatory of the
Trustee
manually signs the Trustee's Certificate of Authentication on the
other side of this
Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder
or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN
(=joint tenants with right of survivorship and not as tenants in
common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
18. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.
19. Requests for Copies.
The
Company will furnish to any Securityholder upon written request and
without
charge a copy of the Indenture and, if requested, a copy of this
Security in larger type.
Requests may be made to:
PG&E CORPORATION
Xxx Xxxxxx, Xxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx
00000
Attention: Assistant Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
PG&E Corporation
One Market, Xxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief
Counsel—Corporate
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
20. Registration Rights.
The
Holders of the Securities are entitled to the benefits of the
Resale
Registration Rights Agreement, dated as of June 25, 2002, between
the Company and the
purchasers identified on the signature pages thereto, including the
receipt of Shelf
Liquidated Damages upon a Registration Default (as defined in such agreement).
ASSIGNMENT FORM |
CONVERSION NOTICE |
To assign this Security fill in the form below: |
To convert this Security into Common Stock of the Company check the box [ ] |
I or we assign and transfer
this Security to __________________________________________ |
To convert only part of this
Security, state the principal amount to be converted (which must be
$1,000 or an integral multiple of $1,000 or in the case of any PIK
Security $1.00 or an integral multiple of $1.00): |
Date: __________ Your Signature: _________________________________
_________________________________________________________________________
(Sign exactly as your name appears on the other side
of this Security)
Signature Guaranteed
________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:_____________________________
Authorized
Signatory
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________($___________).
Date |
Amount of Increase in Principal Amount of Global Security |
Amount of Decrease in Principal Amount of Global Security |
Principal Amount of Global Security After Increase or Decrease |
Notation by Registrar or Security Custodian |
EXHIBIT B
[FORM OF FACE OF 144A GLOBAL SECURITY]
THE SECURITY EVIDENCED BY THIS
CERTIFICATE AND ANY SHARES OF COMMON STOCK ISSUABLE UPON
THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT (A "QIB"); OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT)
(AN "IAI");
(2) AGREES THAT IT WILL
NOT, (I) WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k)
(TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF
APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF
THE TRANSFER OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A
QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE
REGISTRATION OF TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM
THE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE STATE
SECURITIES LAWS, OR (II) AFTER THE TIME PERIOD REFERRED TO UNDER
RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF
APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A
REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE
FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE (AS SUCH TERM IS
DEFINED IN RULE 144
UNDER THE SECURITIES ACT);
(3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND;
(4) AGREES THAT IT WILL,
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY
INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO IN CLAUSE 2(I)
OF THIS LEGEND,
COMPLETE AND DELIVER A TRANSFER CERTIFICATE, THE FORM OF WHICH IS
AVAILABLE FROM THE
TRUSTEE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF
THE FOREGOING
RESTRICTIONS.
The foregoing legend may be removed from this Security on
satisfaction of the
conditions specified in the Indenture.
PG&E CORPORATION
9.50% Convertible Subordinated Notes due 2010
No.
CUSIP:
Issue Date: ______,
20__ Principal Amount:
$
PG&E CORPORATION, a California corporation, promises to pay to
Cede & Co. or
registered assigns, the principal amount of _________________
dollars
($
)
on June 30, 2010.
Interest Payment Dates: June 30 and December 31, commencing December 31, 2002.
Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Security
set forth on
the reverse side of this Security, which further provisions shall
for all purposes have
the same effect as if set forth at this place.
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed
under its corporate seal.
Dated: _____, 20__ PG&E CORPORATION
By:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. BANK, N.A.,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated: _______ __, 20__
[FORM OF REVERSE OF 144A GLOBAL SECURITY IS
IDENTICAL TO REVERSE OF EXHIBIT A]
EXHIBIT C
[FORM OF FACE OF CERTIFICATED SECURITY]
THE SECURITY EVIDENCED BY THIS
CERTIFICATE AND ANY SHARES OF COMMON STOCK ISSUABLE UPON
THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT (A "QIB"); OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT)
(AN "IAI");
(2) AGREES THAT IT WILL
NOT, (I) WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k)
(TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF
APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF
THE TRANSFER OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A
QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE
REGISTRATION OF TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM
THE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE STATE
SECURITIES LAWS, OR (II) AFTER THE TIME PERIOD REFERRED TO UNDER
RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF
APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A
REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE
FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE (AS SUCH TERM IS
DEFINED IN RULE 144
UNDER THE SECURITIES ACT);
(3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND;
(4) AGREES THAT IT WILL,
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY
INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO IN CLAUSE 2(I)
OF THIS LEGEND,
COMPLETE AND DELIVER A TRANSFER CERTIFICATE, THE FORM OF WHICH IS
AVAILABLE FROM THE
TRUSTEE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF
THE FOREGOING
RESTRICTIONS.
The foregoing legend may be removed from this Security on
satisfaction of the
conditions specified in the Indenture.
PG&E CORPORATION
9.50% Convertible Subordinated Notes due 2010
No.
Issue Date: ______,
20__ Principal Amount:
$
PG&E CORPORATION, a California corporation, promises to pay to
___________________
or registered assigns, the principal
amount of _________________ dollars
($
) on June 30, 2010.
Interest Payment Dates: June 30 and December 31, commencing December 31, 2002.
Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Security
set forth on
the reverse side of this Security, which further provisions shall
for all purposes have
the same effect as if set forth at this place.
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed
under its corporate seal.
Dated: _____, 20__ PG&E CORPORATION
By:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. BANK, N.A.,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated: _______ __, 20__
[FORM OF REVERSE OF
CERTIFICATED SECURITY IS IDENTICAL TO THE REVERSE OF EXHIBIT A
EXCEPT
THAT THE LAST PAGE THEREOF SHALL NOT BE INCLUDED
IN THE CERTIFICATED SECURITY]