Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
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entered into as of May 22, 2001 by and among PG&E National Energy Group, Inc., a
Delaware corporation (the "Company"), and the Initial Purchasers (as hereinafter
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defined).
This Agreement is made pursuant to the Purchase Agreement dated May
17, 2001 (the "Purchase Agreement"), by and among the Company, as issuer of the
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$1,000,000,000 aggregate principal amount of 10.375% Senior Notes due 2011 (the
"Notes"), and the Initial Purchasers, which provides for, among other things,
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the sale by the Company to the Initial Purchasers of the aggregate principal
amount of Notes specified therein. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide to the
Initial Purchasers and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
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defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
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Section 3 hereof.
"Affiliate" has the meaning given to that term in Rule 405 under the
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Securities Act or any successor rule thereunder.
"Applicable Period" shall have the meaning set forth in Section 3(u)
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hereof.
"Business Day" shall mean any day other than a Saturday, a Sunday, or
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a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"Closing Date" shall mean May 22, 2001, the initial date of delivery
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of the Notes from the Company to the Initial Purchasers.
"Company" shall have the meaning set forth in the preamble to this
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Agreement and also includes the Company's successors and permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any other
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depositary appointed by the Company; provided, however, that such depositary
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must have an address in the Borough of Manhattan, The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
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2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended from time to time.
"Exchange Notes" shall mean the 10.375% Senior Notes due 2011 issued
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by the Company under the Indenture containing terms identical in all material
respects to the Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid or duly provided for on the Notes or, if no
such interest has been paid, from the date of their original issue, (ii) they
will not contain terms with respect to transfer restrictions under the
Securities Act, and (iii) they will not provide for any Special Interest Premium
thereon.
"Exchange Offer" shall mean the offer by the Company to the Holders to
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exchange all of the Registrable Notes held by each such Holder for a like amount
of Exchange Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
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Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
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hereof.
"Holder" shall mean any Initial Purchaser, for so long as it owns any
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Registrable Notes, and each of its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Notes under the
Indenture.
"Indenture" shall mean the Indenture, dated as of May 22, 2001,
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between the Company, as issuer, and Wilmington Trust Company, as trustee, as the
same may be amended or supplemented from time to time in accordance with the
terms thereof.
"Initial Purchasers" shall mean Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx &
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Co. Incorporated, Xxxxxxx Xxxxx Barney Inc. and X.X. Xxxxxx Securities Inc.
"Inspectors" shall have the meaning set forth in Section 3(p) hereof.
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"Majority Holders" shall mean the Holders of a majority of the
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aggregate principal amount of outstanding Notes or Exchange Notes, as the case
may be.
"Notes" shall have the meaning set forth in the preamble to this
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Agreement.
"Parent" shall mean PG&E Corporation, the sole indirect holder of all
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of the stock of the Company.
"Participating Broker-Dealer" shall have the meaning set forth in
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Section 3(u) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
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unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof or other legal entity.
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"Prospectus" shall mean the prospectus included in a Registration
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Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all documents incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
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to this Agreement.
"Records" shall have the meaning set forth in Section 3(p) hereof.
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"Registrable Notes" shall mean the Notes, until the earliest to occur
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of (a) the date on which any Note has been exchanged by a Person other than a
Participating Broker-Dealer for Exchange Notes in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of any Note for
one or more Exchange Notes, the date on which such Exchange Notes are sold to a
purchaser in accordance with the Exchange Offer Registration Statement, (c) the
date on which any Note has been registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement and (d) the date on which
any Note is eligible to be distributed to the public pursuant to Rule 144(k)
under the Securities Act.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
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fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Notes in accordance
with the rules and regulations of the NASD, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one counsel for all underwriters and
Holders as a group in connection with blue sky qualification of any of the
Exchange Notes or Registrable Notes) and compliance with the rules of the NASD,
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any Prospectus
and any amendments or supplements thereto, and in preparing or assisting in
preparing, printing and distributing any underwriting agreements, Notes sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) the fees and disbursements
of counsel for the Company and of the independent certified public accountants
of the Company and its subsidiaries, including the expenses of any "cold
comfort" letters required by or incident to the performance of and compliance
with this Agreement, (vi) the reasonable fees and expenses of the Trustee and
its counsel and any exchange agent or custodian, and (vii) the reasonable fees
and expenses of any special experts retained by the Company in connection with
any Registration Statement.
"Registration Statement" shall mean any registration statement of the
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Company which covers any of the Exchange Notes or Registrable Notes pursuant to
the provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
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"Rule 144(k) Period" shall mean the period of two years (or such
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shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Closing Date.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities Act" shall mean the Securities Act of 1933, as amended
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from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
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Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
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2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
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Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
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statement of the Company pursuant to the provisions of Section 2(b) hereof which
covers all of the Registrable Notes (except Registrable Notes which the Holders
have elected not to include in such Shelf Registration Statement or the Holders
of which have not complied with their obligations under the penultimate
paragraph of Section 3 hereof or under the first paragraph of Section 2(b)
hereof) on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"Special Interest Premium" shall have the meaning set forth in Section
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2(e) hereof.
"TIA" shall have the meaning set forth in Section 3(m) hereof.
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"Trustee" shall mean the trustee under the Indenture.
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2. Registration Under the Securities Act.
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(a) Exchange Offer. Except as set forth in Section 2(b) below, the
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Company shall, for the benefit of the Holders, at the Company's cost, (i) file
with the SEC within 180 calendar days after the Closing Date an Exchange Offer
Registration Statement on an appropriate form under the Securities Act relating
to the Exchange Offer, (ii) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to be declared effective under the
Securities Act by the SEC not later than the date which is 270 calendar days
after the Closing Date, and (iii) provided such Exchange Offer Registration
Statement has been declared effective under the Securities Act by the SEC,
commence the Exchange Offer and keep the Exchange Offer open for not less than
30 days, or longer if required by applicable law, after the date on which such
Registration Statement was declared effective by the SEC (such period referred
to herein as the "Exchange Period") and at the termination thereof issue,
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Exchange Notes in exchange for all Registrable Notes tendered prior thereto in
the Exchange Offer.
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Each Holder of Registrable Notes to be exchanged in the Exchange Offer
shall be required, as a condition to participating in the Exchange Offer, to
represent that it acquires the Exchange Notes in the ordinary course of such
Holder's business and that it (i) is not an Affiliate of the Company, (ii) does
not hold any Notes to be exchanged for Exchange Notes in the Exchange Offer that
were acquired other than in the ordinary course of business, (iii) is not a
broker-dealer tendering Registrable Notes acquired directly from the Company,
(iv) at the time of the Exchange Offer, has no arrangements or understandings
with any Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Notes.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) utilize the services of the Depositary for the Exchange Offer
with respect to Notes represented by a global certificate;
(iii) permit Holders to withdraw tendered Registrable Notes at any
time prior to the close of business, New York City time, on the last Business
Day of the Exchange Period, by sending to the institution specified in the
notice to Holders, a telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Registrable Notes
delivered for exchange, and a statement that such Holder is withdrawing his
election to have such Registrable Notes exchanged;
(iv) notify each Holder that any Registrable Security not tendered by
such Holder in the Exchange Offer will remain outstanding and continue to accrue
interest but will not retain any rights under this Agreement (except in the case
of the Initial Purchasers and Participating Broker-Dealers as provided herein);
and
(v) otherwise comply in all material respects with all applicable
laws and regulations relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange all Registrable Notes or portions thereof
duly tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement and
letter of transmittal;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for exchange
by the Company; and
(iii) issue, and cause the Trustee under the Indenture to promptly
authenticate and deliver to each Holder, Exchange Notes equal in principal
amount to the principal amount of the Notes as are surrendered by such Holder.
Interest on each Exchange Note issued pursuant to the Exchange Offer
will accrue from the last date on which interest was paid or duly provided for
on the Note surrendered in
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exchange therefor or, if no interest has been paid on such Note, from the date
of original issue of such Note. To the extent not prohibited by any judicial
order, judgment, law, regulation or applicable interpretation of the staff of
the SEC, the Company shall use reasonable best efforts to complete the Exchange
Offer as provided above, and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and regulations
in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions other than the conditions referred to in Section 2(b)(i) and
(ii) below and those conditions that are customary in similar exchange offers,
except as may be required by applicable law. Each Holder of Registrable Notes
who wishes to exchange such Registrable Notes for Exchange Notes in the Exchange
Offer will be required to make certain customary representations in connection
therewith, including, in the case of any Holder, representations that (i) it is
not an Affiliate of the Company, (ii) it is not a broker-dealer tendering
Registrable Notes acquired directly from the Company, (iii) the Notes being
exchanged, and the Exchange Notes to be received, by it have been or are being
acquired in the ordinary course of its business and (iv) at the time of the
Exchange Offer, it has no arrangements or understandings with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes. The Company shall inform the Initial Purchasers, after
consultation with the Trustee, of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders in order to facilitate the tender of Registrable Notes in
the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
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mutandis, solely with respect to Exchange Notes held by Initial Purchasers and
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Participating Broker-Dealers, and the Company shall have no further obligation
to register the Registrable Notes held by any other Holder pursuant to Section
2(b) of this Agreement.
(b) Shelf Registration. If (i) because of any change in law,
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regulation or in currently prevailing interpretations thereof by the staff of
the SEC, the Company is not permitted to effect the Exchange Offer as
contemplated by Section 2(a) hereof, (ii) the Exchange Offer is not consummated
within 300 days after the Closing Date or (iii) any Holder of Registrable Notes
that is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) shall notify the Company prior to the 20th day following the
consummation of the Exchange Offer (A) that such Holder was prohibited by
applicable law or SEC policy from participating in the Exchange Offer, or (B)
that such Holder may not resell the Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Participating Broker-Dealer and holds Notes acquired directly from
the Company or one of its Affiliates (any of the events specified in (i), (ii)
or (iii) being a "Shelf Registration Event", and the date of occurrence thereof,
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the "Shelf Registration Event Date"), then in addition to or in lieu of
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conducting the Exchange Offer contemplated by Section 2(a), as the case may be,
the Company shall promptly notify the Holders in writing thereof and shall, at
its cost, file as promptly as practicable after such Shelf Registration Event
Date and, in any event, within 90 days after such Shelf Registration Event Date,
a Shelf Registration Statement providing for the sale by the Holders of all of
the Registrable Notes (other than Registrable Notes owned by Holders who have
elected not to include such Registrable Notes
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in such Shelf Registration Statement or who have not complied with their
obligations under the penultimate paragraph of Section 3 hereof or under this
paragraph), and shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable and in any event, on or before the 120th day after the Shelf
Registration Event Date or, if later, the 300th day after the Closing Date. No
Holder of Registrable Notes shall be entitled to include any of its Registrable
Notes in any Shelf Registration pursuant to this Agreement unless and until such
Holder agrees in writing to be bound by all of the provisions of this Agreement
applicable to such Holder and furnishes to the Company in writing, within 15
days after receipt of a request therefor, such information as the Company may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC to be included in such Shelf Registration
Statement or Prospectus included therein, reasonably request for inclusion in
any Shelf Registration Statement or Prospectus included therein. Each Holder as
to which any Shelf Registration is being effected agrees to furnish to the
Company, without request and as soon as practicable, all information with
respect to such Holder necessary to make the information previously furnished to
the Company by such Holder not materially misleading.
The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective and the Prospectus usable
for resales for the earlier of: (x) the expiration of the Rule 144(k) Period or
(y) such time as all of the Notes covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or cease to be
Registrable Notes (the period from the effective date of the Shelf Registration
Statement until the earlier of the events described in clauses (x) or (y) being
the "Effectiveness Period"). The Company shall not permit any securities other
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than Registrable Notes to be included in the Shelf Registration. The Company
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder of Registrable Notes covered thereby, a reasonable number of
copies of the Prospectus which is a part of the Shelf Registration Statement,
notify each such Holder when the Shelf Registration has become effective and
take any other action required to permit unrestricted resales of the Registrable
Notes. The Company further agrees to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company agrees to furnish to the Holders of
Registrable Notes covered by such Shelf Registration Statement copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
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connection with any Registration Statement filed pursuant to Section 2(a) and/or
2(b) hereof and will reimburse the Initial Purchasers for the reasonable fees
and disbursements Xxxxxxx Xxxxxxx & Xxxxxxxx incurred in connection with the
Exchange Offer. Except as provided herein, each Holder shall pay all expenses
of its counsel, underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable Notes
pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
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Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof
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will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
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effective, the offering of Registrable Notes pursuant to such Exchange Offer
Registration Statement or Shelf Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Exchange Offer Registration Statement or
Shelf Registration Statement will be deemed not to have been effective during
the period of such interference, until the offering of Registrable Notes
pursuant to such Registration Statement may legally resume. The Company will be
deemed not to have used its reasonable best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if it voluntarily
takes any action that would result in any such Registration Statement not being
declared effective or that would result in the otherwise eligible Holders of
Registrable Notes covered thereby not being able to exchange or offer and sell
such Registrable Notes during that period, unless such action is required by
applicable law or regulation or permitted by Section 2(b)(iv)(B).
(e) Special Interest Premium. In the event that:
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(i) the Exchange Offer Registration Statement is not filed with the
SEC on or prior to the 180th day after the Closing Date, then, commencing on the
181st day after the Closing Date, a special interest premium (the "Special
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Interest Premium") shall accrue on the principal amount of the Notes at a rate
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of 0.50% per annum;
(ii) the Exchange Offer Registration Statement is not declared
effective by the SEC on or prior to the 270th day after the Closing Date, then,
commencing on the 271st day after the Closing Date, a Special Interest Premium
shall accrue on the principal amount of the Notes at a rate of 0.50% per annum;
(iii) (A) the Company has not exchanged Exchange Notes for all Notes
validly tendered, in accordance with the terms of the Exchange Offer, on or
prior to the 300th day after the Closing Date or (B) if the Shelf Registration
Statement is required to be filed pursuant to Section 2(b) but is not declared
effective by the SEC on or prior to the 300th day after the Closing Date, then,
commencing on the 301st day after the Closing Date, a Special Interest Premium
shall accrue on the principal amount of the Notes at the rate of 0.50% per
annum; or
(iv) the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be continuously effective or the
Prospectus contained in such Shelf Registration Statement ceases to be usable
for resales (A) at any time prior to the expiration of the Effectiveness Period
or (B) if related to corporate developments, public filings with the SEC or
similar events or because the Prospectus contains an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and such
failure continues for more than 60 days (whether or not consecutive and whether
or not arising out of a single or multiple circumstances) in any twelve-month
period, then the Special Interest Premium shall accrue on the principal amount
of the Notes at a rate of 0.50% per annum commencing on the day that (in the
case of (A) above), or the 61st (cumulative) day after (in the case of (B)
above), such Shelf Registration Statement ceases to be effective or the
Prospectus ceases to be usable for resales;
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provided, however, that the aggregate amount of the Special Interest Premium in
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respect of the Notes may not exceed 0.50% per annum (regardless of whether
multiple events triggering a Special Interest Premium under this subsection (e)
exist); provided, further, however, that (1) upon the filing of the Exchange
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Offer Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement (in the case of
clause (ii) above), (3) upon the exchange of Exchange Notes for all Notes
validly tendered (in the case of clause (iii)(A) above) or upon the
effectiveness of the Shelf Registration Statement (in the case of clause
(iii)(B) above) and (4) upon the earlier of (y) such time as the Shelf
Registration Statement which had ceased to remain effective or the Prospectus
which had ceased to be usable for resales again becomes effective and usable for
resales, as applicable, and (z) the expiration of the Effectiveness Period (in
each case of clause (iv) above), the Special Interest Premium on the principal
amount of the Notes as a result of such clause (or the relevant subclause
thereof) shall cease to accrue; provided, further, however, that if the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 300th day after the Closing Date and the Company shall request Holders to
provide the information required by the SEC for inclusion in the Shelf
Registration Statement, the Notes owned by Holders who do not provide such
information when required pursuant to Section 2(b) will not be entitled to any
Special Interest Premium for any day after the 300th day after the Closing Date,
regardless of the existence of any events which would otherwise trigger a
Special Interest Premium under this subsection (e) for such Holders.
Any Special Interest Premium due pursuant to Section 2(e)(i), (ii),
(iii) or (iv) above will be payable in cash on the next succeeding May 15 or
November 15, as the case may be, to eligible Holders (as determined under this
subsection (e)) on the relevant record dates for the payment of interest
pursuant to the Indenture.
(f) Specific Enforcement. Without limiting the remedies available to
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the Holders, the Company acknowledges that any failure by the Company to comply
with its obligations under Section 2(a) and Section 2(b) hereof may result in
material irreparable injury to the Holders for which there is no adequate remedy
at law, that it would not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of
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the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form shall (i) be
selected by the Company, (ii) in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and, in the case of an Exchange Offer, be available for the
exchange of Registrable Notes, and (iii) comply as to form in all
material respects
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with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use its
reasonable best efforts to cause such Registration Statement to become
effective and remain effective (and, in the case of a Shelf
Registration Statement, the Prospectus to be usable for resales) in
accordance with Section 2 hereof; provided, however, that if (1) such
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filing is pursuant to Section 2(b), or (2) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant to Section
2(a) is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall furnish to and afford the
Holders of the Registrable Notes and each such Participating Broker-
Dealer, as the case may be, covered by such Registration Statement,
their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed; and the Company shall not file
any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded
an opportunity to review prior to the filing of such document if the
Majority Holders of the Registrable Notes, depending solely upon which
Holders must be afforded the opportunity of such review, or such
Participating Broker-Dealer, as the case may be, their counsel or the
managing underwriters, if any, shall reasonably object in a timely
manner;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep
such Registration Statement effective for the Effectiveness Period or
the Applicable Period, as the case may be, and cause each Prospectus
to be supplemented, if so determined by the Company or requested by
the SEC, by any required prospectus supplement and as so supplemented
to be filed pursuant to Rule 424 (or any similar provision then in
force) under the Securities Act, and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the
disposition of all Notes covered by each Registration Statement during
the Effectiveness Period or the Applicable Period, as the case may be,
in accordance with the intended method or methods of distribution by
the selling Holders thereof described in this Agreement (including
sales by any Participating Broker-Dealer);
(c) in the case of an Exchange Offer Registration Statement, if in
the reasonable opinion of counsel to the Company there is a question
as to whether the Exchange Offer is permitted by applicable law, seek
a no-action letter or other favorable decision from the SEC allowing
the Company to consummate an Exchange Offer for such Notes. The
Company hereby agrees to pursue the issuance of such a decision to the
SEC staff level but shall not be required to take commercially
unreasonable action to effect a change of SEC policy. The Company
hereby agrees, however, to (i) participate in telephonic conferences
with the SEC, (ii) deliver to the SEC staff an analysis prepared by
counsel to the Company setting
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forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (iii) diligently
pursue a resolution (which need not be favorable) by the SEC staff of
such submission;
(d) in the case of an Exchange Offer Registration Statement, prior to
the effectiveness of such statement, provide a supplemental letter to
the SEC (i) stating that the Company is registering the Exchange Offer
in reliance on the position of the SEC enunciated in Exxon Capital
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Holdings Corporation (available May 13, 1988), Xxxxxx Xxxxxxx and Co.,
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Inc. (available June 5, 1991), Xxxxx & Wood LLP (available February 7,
---- ----------------
1997) and, if applicable, any no-action letter obtained pursuant to
Section 3(c) and (ii) including a representation that the Company has
not entered into any arrangement or understanding with any Person to
distribute the Exchange Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in
its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of
the Exchange Notes received in the Exchange Offer;
(e) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Notes included in the Shelf Registration Statement, at
least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Notes is being filed and
advising such Holder that the distribution of Registrable Notes will
be made in accordance with the method selected by the Majority Holders
of the Registrable Notes, (ii) furnish to each Holder of Registrable
Notes included in the Shelf Registration Statement and to each
underwriter of an underwritten offering of Registrable Notes, if any,
without charge, as many copies of each Prospectus, including each
preliminary prospectus, and any amendment or supplement thereto, and
such other documents as such Holder or underwriter may reasonably
request, in order to facilitate the public sale or other disposition
of the Registrable Notes and (iii) consent to the use of the
Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Notes included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Notes covered by the Prospectus or any amendment or
supplement thereto;
(f) in the case of a Shelf Registration, register or qualify the
Registrable Notes under all applicable state securities or "blue sky"
laws of such jurisdictions by the time the applicable Registration
Statement is declared effective by the SEC as any Holder of
Registrable Notes covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Notes shall
reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder and
underwriter to consummate the disposition in each such jurisdiction of
such Registrable Notes owned by such Holder; provided, however, that
-------- -------
the Company shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required
11
to qualify but for this Section 3(f), (ii) file any general consent to
service of process in any jurisdiction where it would not otherwise be
subject to such service of process or (iii) subject itself to taxation
in any such jurisdiction if it is not then so subject;
(g) (1) in the case of a Shelf Registration or (2) if Participating
Broker-Dealers from whom the Company has received prior written notice
that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(u) hereof, are
seeking to sell Exchange Notes and are required to deliver
Prospectuses, promptly notify each Holder of Registrable Notes, or
such Participating Broker-Dealers, as the case may be, their counsel
and the managing underwriters, if any, and promptly confirm such
notice in writing (i) when a Registration Statement has become
effective and when any post-effective amendments thereto become
effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement
or Prospectus or for additional information after the Registration
Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of the
Registrable Notes or the Exchange Notes to be offered or sold by any
Participating Broker-Dealer in any jurisdiction described in Section
3(f) hereof or the initiation of any proceedings for that purpose,
(iv) in the case of a Shelf Registration, if, between the effective
date of a Registration Statement and the closing of any sale of
Registrable Notes covered thereby, the representations and warranties
of the Company contained in any purchase agreement, securities sales
agreement or other similar agreement cease to be true, correct and
complete in all material respects, (v) of the happening of any event
or the failure of any event to occur or the discovery of any facts,
during the Effectiveness Period, which makes any statement made in
such Registration Statement or the related Prospectus untrue in any
material respect or which causes such Registration Statement or
Prospectus to omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, as well as any other corporate
developments, public filings with the SEC or similar events causing
such Registration Statement not to be effective or the Prospectus not
to be useable for resales and (vi) of the reasonable determination of
the Company that a post-effective amendment to the Registration
Statement would be appropriate;
(h) obtain the withdrawal of any order suspending the effectiveness
of a Registration Statement as soon as practicable;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of
each Registration Statement relating to such Shelf Registration and
any post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
12
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and
not bearing any restrictive legends (except any customary legend borne
by securities held through The Depository Trust Company or any similar
depository) and in such denominations (consistent with the provisions
of the Indenture and the officer's certificate establishing the forms
and the terms of the Notes pursuant to the Indenture) and registered
in such names as the selling Holders or the underwriters may
reasonably request (provided such names are consistent with the names
of the selling securityholders set forth in the Shelf Registration
Statement) at least two Business Days prior to the closing of any sale
of Registrable Notes pursuant to such Shelf Registration Statement;
(k) in the case of a Shelf Registration or an Exchange Offer
Registration, promptly after the occurrence of any event specified in
Section 3(g)(ii), 3(g)(iii), 3(g)(v) (subject to the 60-day cumulative
grace period within any twelve-month period provided for in Section
2(e)(iv)(B)) or 3(g)(vi) hereof, prepare a supplement or post-
effective amendment to such Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes, such Prospectus will not include
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company shall notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such
misstatement or omission;
(l) obtain a CUSIP number, and any other appropriate security
identification number, for the Exchange Notes or the Registrable
Notes, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with certificates for
the Exchange Notes or the Registrable Notes, as the case may be, in a
form eligible for deposit with the Depositary;
(m) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration
---
of the Exchange Notes or Registrable Notes, as the case may be, and
effect such changes to such documents as may be required for them to
be so qualified in accordance with the terms of the TIA and execute,
and cause the Trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents required to be
filed with the SEC to enable such documents to be so qualified in a
timely manner;
(n) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions in connection
therewith as are reasonably requested
13
by the Holders of at least 25% in aggregate principal amount of the
Registrable Notes in order to expedite or facilitate the registration
or the disposition of the Registrable Notes;
(o) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) an
Initial Purchaser, in the case where such Initial Purchaser holds
Notes acquired by it as part of its initial placement, or (y) Holders
of at least 25% in aggregate principal amount of the Registrable Notes
covered thereby: (i) make such representations and warranties to
Holders of such Registrable Notes and the underwriters (if any), with
respect to the business of the Company as then conducted and the
Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which may be
in the form of a reliance letter) in form and substance reasonably
satisfactory to the managing underwriters (if any) and the Holders of
a majority in amount of the Registrable Notes being sold, addressed to
each selling Holder and the underwriters (if any) covering the matters
customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such
underwriters (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters from
the independent certified public accountants of the Company, addressed
to each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other
matters as reasonably requested by such underwriters in accordance
with Statement on Auditing Standards No. 72; and (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those
set forth in Section 4 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement and the
managing underwriters) customary for such agreements with respect to
all parties to be indemnified pursuant to said Section (including,
without limitation, such underwriters and selling Holders); and in the
case of an underwritten registration, the above requirements shall be
satisfied at each closing under the related underwriting agreement or
as and to the extent required thereunder;
(p) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, make reasonably available
for inspection by any selling Holder of Registrable Notes or
Participating Broker-Dealer, as applicable, who certifies to the
Company
14
that it has a current intention to sell Registrable Notes pursuant to
the Shelf Registration, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant
or other agent retained by any such selling Holder, Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during the
----------
Company's normal business hours, all financial and other records,
pertinent organizational and operational documents and properties of
the Company and the Parent (collectively, the "Records") as shall be
-------
reasonably necessary to enable them to conduct due diligence
activities, and cause the officers, trustees and employees of the
Company and the Parent to supply all relevant information in each case
reasonably requested by any such Inspector in connection with such
Registration Statement; Records and information which the Company
determines, in good faith, to be confidential and any Records and
information which it notifies the Inspectors are confidential shall
not be disclosed to any Inspector except where (i) the disclosure of
such Records or information is necessary to avoid or correct a
material misstatement or omission in such Registration Statement, (ii)
the release of such Records or information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is
necessary in connection with any action, suit or proceeding or (iii)
such Records or information previously has been made generally
available to the public; each selling Holder of such Registrable Notes
and each such Participating Broker-Dealer will be required to agree in
writing that Records and information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the
Company unless and until such is made generally available to the
public through no fault of an Inspector or a selling Holder; and each
selling Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree in writing that it
will, upon learning that disclosure of such Records or information is
sought in a court of competent jurisdiction, or in connection with any
action, suit or proceeding, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent
disclosure of the Records and information deemed confidential;
(q) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods, provided that the obligations under this paragraph (q) shall
be satisfied by the
15
timely filing of quarterly and annual reports on Forms 10-Q and 10-K
under the Exchange Act;
(r) if an Exchange Offer is to be consummated, upon delivery of the
Registrable Notes by Holders to the Company (or to such other Person
as directed by the Company ), in exchange for the Exchange Notes, the
Company shall xxxx, or cause to be marked, on such Notes delivered by
such Holders that such Notes are being cancelled in exchange for the
Exchange Notes; it being understood that in no event shall such Notes
be marked as paid or otherwise satisfied;
(s) cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel
in connection with any filings required to be made with the NASD;
(t) take all other steps necessary to effect the registration of the
Registrable Notes covered by a Registration Statement contemplated
hereby;
(u) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably
acceptable to the Initial Purchasers or another representative of the
Participating Broker-Dealers, and which shall contain a summary
statement of the positions taken or policies made by the staff of the
SEC with respect to the potential "underwriter" status of any broker-
dealer that holds Registrable Notes acquired for its own account as a
result of market-making activities or other trading activities (a
"Participating Broker-Dealer") and that will be the beneficial owner
----------------------------
(as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes to
be received by such broker-dealer in the Exchange Offer, whether such
positions or policies have been publicly disseminated by the staff of
the SEC or such positions or policies, in the reasonable judgment of
the Initial Purchasers or such other representative, represent the
prevailing views of the staff of the SEC, including a statement that
any such broker-dealer who receives Exchange Notes for Registrable
Notes pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such Exchange
Notes, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(g),
without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, including any preliminary
Prospectus, and any amendment or supplement thereto, as such
Participating Broker-Dealer may reasonably request (the Company hereby
consents to the use of the Prospectus forming part of the Exchange
Offer Registration Statement or any amendment or supplement thereto by
any Person subject to the prospectus delivery requirements of the
Securities Act, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Notes covered by
the Prospectus or any amendment or supplement thereto), (iii) use its
reasonable best efforts to keep the
16
Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period
of time as such Persons must comply with such requirements under the
Securities Act and applicable rules and regulations in order to resell
the Exchange Notes; provided, however, that such period shall not be
-------- -------
required to exceed 210 days (or such longer period if extended
pursuant to the last sentence of Section 3 hereof) (the "Applicable
----------
Period"), and (iv) include in the transmittal letter or similar
------
documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer
holding Registrable Notes acquired for its own
account as a result of market-making activities or
other trading activities, it will deliver a
prospectus meeting the requirements of the
Securities Act in connection with any resale of
Exchange Notes received in respect of such
Registrable Notes pursuant to the Exchange Offer";
and (y) a statement to the effect that by a Participating Broker-
Dealer making the acknowledgment described in clause (x) and by
delivering a Prospectus in connection with the exchange of Registrable
Notes, the Participating Broker-Dealer will not be deemed to admit
that it is an underwriter within the meaning of the Securities Act;
and
(B) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver to the Initial Purchasers or to another
representative of the Participating Broker-Dealers, if reasonably
requested by an Initial Purchaser or such other representative of
Participating Broker-Dealers, on behalf of the Participating Broker-
Dealers upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably satisfactory to such Initial
Purchaser or such other representative of the Participating Broker-
Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements
and such other matters as may be reasonably requested (it being agreed
that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officer's
certificate substantially similar to that specified in Section 7(i) of
the Purchase Agreement and such additional certifications as are
customarily delivered in a public offering of debt Notes and (iii)
upon the effectiveness of the Exchange Offer Registration Statement,
comfort letters, in each case, in customary form if permitted by
Statement on Auditing Standards No. 72.
The Company may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Company such information
regarding such seller as may be required by the staff of the SEC to be included
in a Registration Statement. The Company may exclude from such registration the
Registrable Notes of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such
17
request. The Company shall have no obligation to register under the Securities
Act the Registrable Notes of a seller who so fails to furnish such information.
In the case of a Shelf Registration Statement, or if Participating
Broker-Dealers who have notified the Company that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided in
this Section 3(u) are seeking to sell Exchange Notes and are required to deliver
Prospectuses, each Holder agrees that, upon receipt of any notice from the
Company of the occurrence of any event specified in Section 3(g)(ii), 3(g)(iii),
3(g)(v) or 3(g)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof or until it is advised in writing (the "Advice") by the
------
Company that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies in such Holder's possession, other than permanent
file copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes or Exchange Notes, as the case may be, current at the time of
receipt of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes or Exchangeable Notes, as the case may be,
pursuant to a Registration Statement, the Company shall use its reasonable best
efforts to file and have declared effective (if an amendment), as soon as
practicable after the resolution of the related matters, an amendment or
supplement to the Registration Statement and shall extend the period during
which such Registration Statement is required to be maintained effective and the
Prospectus usable for resales pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice to and
including the date when the Company shall have made available to the Holders (x)
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with a
--------------------------------
Shelf Registration Statement or in connection with any delivery of a Prospectus
contained in an Exchange Offer Registration Statement by any Participating
Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange
Notes, the Company shall indemnify and hold harmless each Holder of Registrable
Notes included within any such Shelf Registration Statement and each
Participating Broker-Dealer or Initial Purchaser selling Exchange Notes, and
each Person, if any, who controls any such Person within the meaning of Section
15 of the Securities Act:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment or supplement thereto),
covering Registrable Notes or Exchange Notes, as applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated or necessary in order to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus, or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
18
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that any such
settlement is effected with the prior written consent of the Company;
and
(iii) against any and all expenses whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by such
Holder, such Participating Broker-Dealer, or any underwriter (except
to the extent otherwise expressly provided in Section 4(c) hereof)),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
-------- -------
claim, damage or expense to the extent arising out of (i) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by the
Initial Purchasers or any Holder, underwriter or Participating Broker-Dealer for
use in a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) or (ii) the failure of any Holder to comply
with the provisions of the last paragraph of Section 3.
(b) Each of the Initial Purchasers and each Holder, underwriter or
Participating Broker-Dealer agrees, severally and not jointly, to indemnify and
hold harmless the Company and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all loss, liability, claim, damage and expense
whatsoever described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser, Holder, underwriter or Participating Broker-
Dealer expressly for use in such Registration Statement (or any amendment
thereto), or any such Prospectus (or any amendment or supplement thereto);
provided, however, that in the case of a Shelf Registration Statement, no such
-------- -------
Holder shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Notes pursuant to
such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have under this Section 4 to the extent that it is
not materially prejudiced by such failure as a result thereof, and in any event
shall not relieve it
19
from liability which it may have otherwise on account of this Agreement. In the
case of parties indemnified pursuant to Section 4(a) or (b) above, counsel to
the indemnified parties shall be selected by such parties. An indemnifying party
may participate at its own expense in the defense of such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to local counsel), separate from their own
counsel, for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional written
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unenforceable by an indemnified party
although applicable in accordance with its terms, the Company and the Holders
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company and the Holders, as incurred; provided, however, that 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 that was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by this Agreement in
such proportion as shall be appropriate to reflect the relative fault of the
Company, on the one hand, and the Holders, on the other hand, with respect to
the statements or omissions which resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holders, on the other hand, 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 Company, on the one hand, or by or on behalf of the
Holders, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 4, each
Affiliate of a Holder, and each director, officer and employee and Person, if
any, who controls a Holder or such Affiliate within the meaning of Section 15 of
the Securities Act or Section 20
20
of the Exchange Act shall have the same rights to contribution as such Holder
and each Person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.
5. Participation in an Underwritten Registration. No Holder may
---------------------------------------------
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Notes on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Notes
-------------------------
covered by the Shelf Registration Statement who desire to do so may sell the
Notes covered by such Shelf Registration in an underwritten offering, subject to
the provisions of Section 3(l) hereof. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be selected by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in such offering; provided, however,
-------- -------
that such underwriters and managers must be reasonably satisfactory to the
Company.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company is subject to
----------------------
the reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Notes remain outstanding, the Company will file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC thereunder;
provided, however, that if the Company ceases to be so required to file such
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reports, it will, upon the request of any Holder of Registrable Notes, (a) make
publicly available such information as is necessary to permit sales of its
securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of its
securities pursuant to Rule 144A under the Securities Act, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Notes without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, (ii) Rule 144A under the Securities Act, as such
rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Notes, the Company will deliver to such Holder a written statement as to whether
it has complied with such requirements.
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(b) No Inconsistent Agreements. The Company and the Parent have not
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entered into, nor will the Company or the Parent on or after the date of this
Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof without the written consent of Holders of a
majority in aggregate principal amount of the outstanding Registrable Notes.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's or
the Parent's other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
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including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the outstanding Registrable Notes
affected by such amendment, modification, supplement, waiver or departure;
provided that no amendment, modification or supplement or waiver or consent to
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the departure with respect to the provisions of Section 4 hereof shall be
effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder of Registrable Notes. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any Holder
of Registrable Notes, by written agreement signed by the Company and the Initial
Purchasers, to cure any ambiguity, correct or supplement any provision of this
Agreement that may be inconsistent with any other provision of this Agreement or
to make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given, by
written agreement signed by the Company and the Initial Purchasers to the extent
that any such amendment, modification, supplement, waiver or consent is, in
their reasonable judgment, necessary or appropriate to comply with applicable
law and regulation (including any interpretation of the Staff of the SEC) or any
change therein and (iii) to the extent any provision of this Agreement relates
to an Initial Purchaser, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may be
given, by written agreement signed by such Initial Purchaser and the Company.
(d) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Initial
Purchasers:
c/x Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Debt Capital Markets, Power Group
and (ii) if to the Company, initially at the Company's address:
PG&E National Energy Group, Inc.
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 7(d).
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All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
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shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(f) Third Party Beneficiaries. Each Holder and any Participating
-------------------------
Broker-Dealer shall be third party beneficiaries of the agreements made
hereunder among the Initial Purchasers and the Company, and the Initial
Purchasers shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
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IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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(k) Notes Held by the Company or its Affiliates. Whenever the
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consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or its Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PG&E NATIONAL ENERGY GROUP, INC.
By: /s/ X. Xxxxxxxx Xxxxx
------------------------------------
Name: X. Xxxxxxxx Xxxxx
Title: President and Chief Operating Officer
Confirmed and accepted as of
the date first above written:
XXXXXX BROTHERS INC.
By: XXXXXX BROTHERS INC.
For itself and as Representative of the
several Initial Purchasers
By: /s/ Xxxx X. Xxxx
----------------------------------
Authorized Signatory
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