Contract
Exhibit 99.2
EXECUTION COPY
_________________________________________________________________
UTILITY STOCK PLEDGE AGREEMENT (35%)—CONTINUED TRANCHE B
LOAN
by and among
PG&E CORPORATION,
as Pledgor
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent
for the benefit of the Lenders, as Pledgee
_________________________________________________________________
Dated as of October 18, 2002
_________________________________________________________________
UTILITY STOCK PLEDGE
AGREEMENT (35%)—CONTINUED TRANCHE B LOAN
STOCK PLEDGE AGREEMENT
(35%)—CONTINUED TRANCHE B LOAN (as amended,
modified or supplemented from time to time, this "Agreement"),
dated as of
October 18, 2002, among PG&E CORPORATION, a California
corporation (the
"Pledgor"), XXXXXX COMMERCIAL PAPER INC., a corporation organized
and
existing under the laws of the State of New York, as Administrative
Agent
for the lenders (the "Lenders") from time to time parties to the
Credit
Agreement described below and DEUTSCHE BANK TRUST COMPANY AMERICAS
(the
"Pledgee"), as Collateral Agent for the benefit of the
Lenders.
W I T N E S S E T H :
WHEREAS, the Pledgor, is a party to the
Amended and Restated Credit
Agreement, dated as of June 25, 2002 (as amended, the "Existing
Credit
Agreement"), with the lenders parties thereto, Xxxxxx Commercial
Paper
Inc., as Administrative Agent, and others, pursuant to which such
lenders
made the Tranche A Loan (as defined in the Existing Credit
Agreement, the
"Existing Tranche A Loan") and the Tranche B Loan (as defined in
the
Existing Credit Agreement, the "Existing Tranche B Loan");
WHEREAS, pursuant to the Second Amended
and Restated Credit Agreement,
dated as of the date hereof (as amended, supplemented or otherwise
modified
from time to time, the "Credit Agreement"), among the Pledgor, the
Lenders
parties thereto, the Administrative Agent and others, the Existing
Credit
Agreement is being amended and restated in its entirety to modify
certain
of the terms applicable to the Existing Tranche B Loan, which
shall
continue to be outstanding under the Credit Agreement (the Existing
Tranche
B Loan, as so modified and continued, the "Continued Tranche B
Loan"), to
reflect repayment of the Existing Tranche A Loan and to provide for
the
making of an additional Tranche B Loan (the "New Tranche B
Loan");
WHEREAS, the Pledgor owns 94% of the
issued and outstanding common
stock of Pacific Gas and Electric Company, a California corporation
(the
"Issuer"); and
WHEREAS, it is a condition precedent to
the obligation of the Lenders
parties to the Existing Credit Agreement to agree to amend and
restate the
Existing Credit Agreement, and to the obligations of
the Lenders to make
the New Tranche B Loan under the Credit Agreement, that this
Agreement
shall have been executed and delivered;
NOW, THEREFORE, in consideration of the foregoing premises and to
induce
the Administrative Agent and the Lenders to enter into the
Credit
Agreement, the Pledgor hereby agrees with the Administrative Agent,
for the
benefit of the Lenders, as follows:
1. SECURITY FOR OBLIGATIONS.
This Agreement is made by the Pledgor
for the benefit of the Pledgee, acting as Collateral Agent for the
benefit
of the Lenders (as more particularly described in Section 3.1), to
secure:
(i)
the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of
all Obligations of the
Pledgor under the Credit Agreement and the
other Financing Documents
in respect of the Continued Tranche B Loan
and the obligations of the
Pledgor under the Option Agreement,
whether direct or indirect,
absolute or contingent, due or to become
due, now existing or
hereafter arising and howsoever evidenced,
and the due performance and
compliance by the Pledgor with the terms
thereof;
(ii)
any and all sums advanced by the Pledgee or any Continued
Tranche B Lender in order to preserve the Collateral or preserve
its
security interest in the Collateral (as defined below); and
(iii)
in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities
referred to in
clauses (i) and (ii) above, the reasonable expenses of retaking,
holding,
preparing for sale or lease, selling or otherwise disposing or
realizing on
the Collateral, or of any exercise by the Pledgee of its rights
hereunder
with respect thereto, together with reasonable attorneys' fees and
court
costs related thereto,
all such obligations, liabilities, sums and expenses set forth in
clauses
(i) through (iii) of this Section 1, whether now existing or
hereafter
arising, being herein collectively called the "Secured
Obligations".
2. DEFINITIONS. (a) Unless
otherwise defined herein, all capitalized
terms used herein and defined in Appendix A to the Credit Agreement
shall
be used herein as therein defined, and the principles of
construction set
forth in Appendix A to the Credit Agreement shall apply to this
Agreement.
(b)
In addition, the following capitalized terms used herein
shall have the definitions specified
below:
"Agreement" has the meaning set forth in the first paragraph
hereof.
"Collateral" has the meaning set forth in
Section 3.1 hereof.
"Continued Tranche B Loan" has the meaning
set forth in the second
recital hereto.
"Continued Tranche B Lender" means any
Lender holding a Continued
Tranche B Loan, in its capacity as the holder of such Loan.
"Credit Agreement" has the meaning set
forth in the second recital
hereto.
"Existing Credit Agreement" has the
meaning set forth in the first
recital hereto.
"Existing Tranche A Loan" has the meaning
set forth in the first
recital hereto.
"Existing Tranche B Loan" has the meaning
set forth in the first
recital hereto.
"Issuer" has the meaning set forth in the
third recital hereto.
"Lenders" has the meaning set forth in the
first paragraph hereof.
"Newco Spin" has the meaning set forth in
the Credit Agreement.
"Newco Stock" means the Capital Stock of
Newco Energy Corporation, a
California corporation.
"New Tranche B Loan" has the meaning set
forth in the second recital
hereto.
"Pledged Stock" means the shares of
Capital Stock of the Issuer
described on Annex A hereto, and any shares of Capital Stock of the
Issuer
at any time issued in respect of the Capital Stock described on
Annex A
hereto.
"Pledgee" has the meaning set forth in the
first paragraph hereof.
"Pledgor" has the meaning set forth in the
first paragraph hereof.
"Proceeds" has the meaning given such term
in the UCC.
"Secured Obligations" has the meaning set
forth in Section 1 hereof.
"Securities Act" means the Securities Act
of 1933, as amended and as
in effect from time to time.
"UCC" means the Uniform Commercial Code as
in effect in the State of
New York from time to time.
"Utility Stock Pledge Agreement
(65%)—Continued Tranche B Loan" means
the Utility Stock Pledge Agreement (65%)—Continued Tranche B
Loan, dated as
of the date hereof, among the parties hereto, pursuant to which 65%
of the
common stock of the Issuer is being pledged to secure Obligations
relating
to the Continued Tranche B Loan.
"Utility Stock Pledge Agreement
(65%)—New Tranche B Loan" means the
Utility Stock Pledge Agreement (65%)—New Tranche B Loan,
dated as of the
date hereof, among the parties hereto, pursuant to which 65% of the
common
stock of the Issuer is being pledged to secure the Secured
Obligations.
"Utility Stock Pledge Agreement
(35%)—Continued Tranche B Loan" means
the Utility Stock Pledge Agreement (35%)—Continued Tranche B
Loan, dated as
of the date hereof, among the parties hereto, pursuant to which
the
Collateral is being pledged to secure Obligations relating to
the
Continued Tranche B Loan.
3. PLEDGE OF PLEDGED STOCK,
ETC.
3.1 Pledge. (a) The Pledgor
hereby transfers, pledges and assigns to
the Pledgee, and grants to the Pledgee a first priority security
interest
in, all of the right, title and interest of the Pledgor in and to
the
following, whether now existing or hereafter from time to time
acquired by
the Pledgor (collectively, the "Collateral"):
(i) the Pledged Stock;
(ii) all other property hereafter
delivered in substitution for any of
the Pledged Stock, all certificates and instruments representing
or
evidencing such other property and all cash, securities,
interest,
dividends, distributions rights and other property at any time and
from
time to time received, receivable or otherwise distributed in
respect of or
in exchange for any or all thereof (including, without limitation,
any
Newco Stock distributed to the Pledgor in respect of the Pledged
Stock in
connection with the Newco Spin); and
(iii) all
Proceeds of any and all of the foregoing.
(b) The foregoing transfer, pledge,
assignment and grant of a
security interest is made to secure the prompt and complete payment
and
performance when due of the Secured Obligations.
(c) Concurrently herewith, the
parties hereto are entering into the
Utility Stock Pledge Agreement (35%)—New Tranche B Loan. It
is the
intention of the parties hereto and thereto that the security
interest and
lien created hereby shall be a separate security interest and lien
from
that created by the Utility Stock Pledge Agreement (35%)—New
Tranche B
Loan, and that the security interest and lien created hereby shall
be equal
in priority to that created by the Utility Stock Pledge Agreement
(35%)—New
Tranche B Loan. It is also the intention of the parties
hereto and thereto
that any avoidance, pursuant to Sections 547 and 550 of the
Bankruptcy
Code, of the security interest and lien created by the Utility
Stock Pledge
Agreement (35%)—New Tranche B Loan shall have no effect on
the lien and
security interest created hereby, which shall continue as a
perfected first
priority interest in the Collateral securing the Secured
Obligations
notwithstanding any such avoidance of the security interest and
lien
created by the Utility Stock Pledge Agreement (35%)—New
Tranche B Loan.
(d) Concurrently herewith, the
parties hereto are entering into the
Utility Stock Pledge Agreement (65%)—Continued Tranche B Loan
and the
Utility Stock Pledge Agreement (65%)—New Tranche B Loan, in
each case
covering collateral that is separate and distinct from the
Collateral. It
is the intention of the parties hereto and thereto that the
security
interest and lien created hereby shall be a separate security
interest and
lien from those created by the Utility Stock Pledge Agreement
(65%)—
Continued Tranche B Loan and the Utility Stock Pledge Agreement
(65%)—New
Tranche B Loan.
3.2 Procedures. i) To
the extent that the Pledgor at any time or
from time to time owns, acquires or obtains any right, title or
interest in
any Collateral, such Collateral shall automatically (and without
the taking
of any action by the Pledgor) be pledged pursuant to Section 3.1 of
this
Agreement and, in addition thereto, the Pledgor shall (as promptly
as
practicable and, in any event, within 10 days after it obtains
such
Collateral) deliver to the Pledgee any stock certificates
evidencing such
Collateral, duly endorsed in blank, and take such other actions as
the
Pledgee shall reasonably request to perfect the Pledgee's security
interest
in such Collateral.
(b) In addition to the actions
required to be taken pursuant to
Section 3.2(a) hereof, the Pledgor shall from time to time, at the
sole
expense of the Pledgor, cause appropriate financing statements (on
Form
UCC-1 or other appropriate form) under the Uniform Commercial Code
as in
effect in the various relevant States, in form covering all
Collateral
hereunder (with the form of such financing statements to be
satisfactory to
the Pledgee), to be filed in the relevant filing offices so that at
all
times the Pledgee has a security interest in all Collateral which
is
perfected by the filing of such financing statements (in each case
to the
maximum extent perfection by filing may be obtained under the laws
of any
relevant State).
3.3 Subsequently Acquired
Collateral. If the Pledgor shall acquire
(by purchase, dividend or similar distribution or otherwise) any
additional
Collateral at any time or from time to time after the date hereof,
such
Collateral shall automatically (and without any further action
being
required to be taken) be subject to the pledge and security
interests
created pursuant to Section 3.1 hereof and, furthermore, the
Pledgor will
promptly thereafter take (or cause to be taken) all action with
respect to
such Collateral in accordance with the procedures set forth in
Section 3.2
hereof, and will promptly thereafter deliver to the Pledgee (i)
a
certificate executed by a principal executive officer of the
Pledgor
describing such Collateral and certifying that the same has been
duly
pledged in favor of the Pledgee (for the benefit of the Lenders)
hereunder
and (ii) supplements to Annexes A and B hereto as are reasonably
necessary
to cause such annexes to be complete and accurate at such
time.
3.4 Transfer Taxes. Each
pledge of Collateral under Section 3.1
hereof shall be accompanied by any transfer tax stamps required
in
connection with the pledge of such Collateral.
3.5 Certain Representations and
Warranties Regarding the Collateral.
The Pledgor represents and warrants that on the date hereof (i)
the Pledged
Stock consists of the number and type of shares described in Annex
A
hereto; (ii) the Pledged Stock constitutes that percentage of the
issued
and outstanding common stock of the Issuer as is set forth in Annex
A
hereto; and (iii) the Pledgor has complied with the respective
procedure
set forth in Sections 3.2(a) and (b) hereof with respect to each
item of
Collateral hereunder.
4. APPOINTMENT OF SUB-AGENTS;
ENDORSEMENTS, ETC. If and to the
extent necessary to enable the Pledgee to perfect its security
interest in
any of the Collateral or to exercise any of its remedies hereunder,
the
Pledgee shall have the right to appoint one or more sub-agents for
the
purpose of retaining physical possession of the Collateral, which
may be
held in the name of the Pledgor, endorsed or assigned in blank or
in favor
of the Pledgee or any nominee or nominees of the Pledgee or a
sub-agent
appointed by the Pledgee.
5. VOTING, ETC., WHILE NO
EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing an Event of Default, the
Pledgor
shall be entitled to exercise any and all voting and other
consensual
rights pertaining to the Collateral owned by it, and to give
consents,
waivers or ratifications in respect thereof.
6. DIVIDENDS AND OTHER
DISTRIBUTIONS. All cash dividends, cash
distributions, cash Proceeds and other cash amounts payable in
respect of
the Collateral (other than proceeds of any foreclosure in respect
of the
Collateral pursuant to Section 7 hereof, which proceeds shall
be
distributed and applied as provided in Section 9 hereof) shall be
received
(a) by the Pledgor, if no Event of Default shall have occurred and
be
continuing and (b) by the Pledgee, if any Event of Default shall
have
occurred and be continuing (all of which amounts so received by the
Pledgee
to be delivered by the Pledgee to the Administrative Agent for
application
toward prepayment of the Secured Obligations). The Pledgee
shall also be
entitled to receive directly, and to retain as part of the
Collateral:
(i)
all other or additional capital stock or other property
(including, but not limited to, cash
dividends other than as set forth
above) paid or distributed by way of
dividend or otherwise in respect
of the Collateral;
(ii) all
other or additional capital stock or other property paid
or distributed in respect of the
Collateral by way of split, spin-off,
split-up, reclassification, combination or
similar rearrangement;
(iii) all other or additional capital stock
or other property
(including, but not limited to, cash)
which may be paid in respect of
the Collateral by reason of any
consolidation, merger, exchange,
conveyance of assets, liquidation or
similar reorganization; and
(iv)
without limiting the generality of the foregoing, all shares
of Newco Stock distributed in respect of
the Collateral.
Nothing contained in this Section 6 shall
limit or restrict in any way
the Pledgee's right to have pledged to it proceeds of the
Collateral in any
form in accordance with Section 3 of this Agreement. All
dividends,
distributions or other payments which are received by the Pledgor
contrary
to the provisions of this Section 6 and Section 7 hereof shall be
received
in trust for the benefit of the Pledgee, shall be segregated from
other
property or funds of the Pledgor and shall be forthwith paid over
to the
Pledgee as Collateral in the same form as so received (with any
necessary
endorsement).
7. REMEDIES IN CASE OF
DEFAULT OR EVENT OF DEFAULT. Subject to the
Credit Agreement, if there shall have occurred and be continuing an
Event
of Default, the Pledgee shall be entitled to exercise all of the
rights,
powers and remedies (whether vested in it by this Agreement, any
other
Financing Document or by law) for the protection and enforcement of
its
rights in respect of the Collateral, and the Pledgee shall be
entitled to
exercise all the rights and remedies of a secured party under the
Uniform
Commercial Code as in effect in any relevant jurisdiction and also
shall be
entitled, without limitation, to exercise the following
rights:
(i) to
receive all amounts payable in respect of the Collateral;
(ii) upon
receipt of all requisite regulatory approvals, to
transfer all or any part of the Collateral into the Pledgee's name
or the
name of its nominee or nominees;
(iii) upon receipt of all requisite
regulatory approvals, to
vote all or any part of the Collateral (whether or not transferred
into the
name of the Pledgee) and give all consents, waivers and
ratifications in
respect of the Collateral and otherwise act with respect thereto as
though
it were the outright owner thereof (the Pledgor hereby
irrevocably
constituting and appointing the Pledgee the proxy and
attorney-in-fact of
the Pledgor, with full power of substitution to do so) and to
exercise any
and all of the rights or powers of the Pledgor in its capacity as
a
stockholder of the Issuer;
(iv) at any
time and from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral,
or any interest therein, at any public or private sale, without
demand of
performance, advertisement or notice of intention to sell or of the
time or
place of sale or adjournment thereof or to redeem or otherwise (all
of
which are hereby waived by the Pledgor to the extent permitted
by
applicable Law), for cash, on credit or for other property, for
immediate
or future delivery without any assumption of credit risk, and for
such
price or prices and on such terms as the Pledgee in its absolute
discretion
may determine, in each case, to the extent permitted by applicable
Law.
The Pledgee shall not be obligated to make any such sale of
Collateral
regardless of whether any notice of sale has theretofore been
given. The
Pledgor hereby waives and releases to the fullest extent permitted
by law
any right or equity of redemption with respect to the Collateral,
whether
before or after sale hereunder (other than the right to pay the
Secured
Obligations in full), and all rights, if any, of marshalling the
Collateral
and any other security for the Secured Obligations or
otherwise. At any
such sale, to the extent permitted by applicable Law, the Pledgee
may bid
for and purchase all or any part of the Collateral so sold free
from any
such right or equity of redemption. The Pledgee shall not be
liable for
failure to collect or realize upon any or all of the Collateral or
for any
delay in so doing nor shall any of them be under any obligation to
take any
action whatsoever with regard thereto; and
(v)
to set-off any and all Collateral against any and all
Secured Obligations and to apply such Collateral to the payment of
any and
all Secured Obligations.
If, pursuant to applicable Law, prior
notice of any of the foregoing
actions is required to be given to the Pledgee, the Pledgee
hereby
acknowledges that the minimum time required by such applicable Law,
or if
no minimum is specified, ten (10) days, shall be deemed a
reasonable notice
period.
8. REMEDIES, ETC.,
CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or in any
other
Financing Document, or now or hereafter existing at law or in
equity or by
statute shall be cumulative and concurrent and shall be in addition
to
every other such right, power or remedy. The exercise or beginning
of the
exercise by the Pledgee of any one or more of the rights, powers
or
remedies provided for in this Agreement or any other Financing
Document or
now or hereafter existing at law or in equity or by statute or
otherwise
shall not preclude the simultaneous or later exercise by the
Pledgee of all
such other rights, powers or remedies, and no failure or delay on
the part
of the Pledgee to exercise any such right, power or remedy shall
operate as
a waiver thereof. No notice to or demand on the Pledgor in
any case shall
entitle it to any other or further notice or demand in similar or
other
circumstances or constitute a waiver of any of the rights of the
Pledgee to
any other or further action in any circumstances without notice or
demand.
9. APPLICATION OF
PROCEEDS. All monies collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to
the terms
of this Agreement, together with all other monies received by the
Pledgee
hereunder, shall be applied at the written instruction of the
Administrative Agent for satisfaction of the Secured Obligations in
the
order provided in the Credit Agreement.
10. PURCHASERS OF COLLATERAL.
Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein
granted,
pursuant to judicial process or otherwise), the receipt given by
the
Pledgee or the officer making the sale shall be a sufficient
discharge to
the purchaser or purchasers of the Collateral so sold, and such
purchaser
or purchasers shall not be obligated to see to the application of
any part
of the purchase money paid over to the Pledgee or such officer or
be
answerable in any way for the misapplication or nonapplication
thereof.
11. [OMITTED]
12. CERTAIN LIMITATIONS
(a) The Pledgee shall not be obligated to
perform or discharge any obligation of the Pledgor as a result of
the
pledge hereby effected.
(b) The acceptance by the Pledgee
of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at
any time
or in any event obligate the Pledgee to appear in or defend any
action or
proceeding relating to the Collateral to which it is not a party,
or to
take any action hereunder or thereunder, or to expend any money or
incur
any expenses or perform or discharge any obligation, duty or
liability
under the Collateral.
13. FURTHER ASSURANCES;
POWER-OF-ATTORNEY. ii) At any time and from
time to time, upon the written request of the Pledgee, and at the
sole
expense of the Pledgor, the Pledgor will promptly and duly execute
and
deliver any and all such further instruments and documents and take
such
further action as the Pledgee reasonably may deem appropriate in
order to
perfect and preserve the Pledgee's security interest in the
Collateral and
in order for the Pledgee to obtain the full benefits of this
Agreement and
of the rights and powers herein granted, including, without
limitation, the
filing of any financing or continuation statements under the
Uniform
Commercial Code in effect in any jurisdiction and the filing of any
other
equivalent or similar statement or document under any other
applicable Law
with any other applicable Governmental Authority with respect to
the
security interests granted hereby. The Pledgor also hereby
authorizes the
Pledgee to file any such financing or continuation statement
without the
signature of the Pledgor to the extent permitted by applicable
Law. If any
amount payable under or in connection with any of the Collateral
shall be
or become evidenced by any promissory note or other instrument,
such note
or instrument shall be immediately delivered to the Pledgee and
pledged to
the Pledgee hereunder, duly endorsed, to the extent necessary, to
the
Pledgee.
(b) The Pledgor hereby appoints the
Pledgee such Pledgor's attorney-
in-fact, with full authority in the place and stead of the Pledgor
and in
the name of the Pledgor or otherwise, to act from time to time,
solely
after the occurrence and during the continuance of an Event of
Default and
subject to the Credit Agreement, in the Pledgee's reasonable
discretion to
take any action and to execute any instrument which the Pledgee may
deem
reasonably necessary or advisable to accomplish the purposes of
this
Agreement.
14. [OMITTED]
15. TRANSFER BY THE PLEDGOR.
The Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge
or
otherwise encumber any of the Collateral or any interest therein
(except as
may be permitted in accordance with the terms of the Financing
Documents).
16. REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE PLEDGOR. iii)
The Pledgor represents, warrants and covenants that:
(i)
it is the legal, beneficial and record owner of, and has
good and marketable title to, all
Collateral consisting of Pledged
Stock and it has all rights in the
Collateral necessary for the
security interest purported to be created
hereunder to attach
(subject, in each case, to no pledge,
lien, security interest, charge,
option or other encumbrance whatsoever,
except the liens and security
interests created by this
Agreement);
(ii) it has
full power, authority and legal right to pledge all
the Collateral pledged by it pursuant to
this Agreement;
(iii) this Agreement has been duly
authorized, executed and
delivered by the Pledgor and constitutes a
legal, valid and binding
obligation of the Pledgor enforceable
against the Pledgor in
accordance with its terms, except to the
extent that the
enforceability hereof may be limited by
applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws generally
affecting creditors' rights and by
equitable principles (regardless of
whether enforcement is sought in equity or
at law);
(iv) except
to the extent already obtained or made, no consent of
any other party (including, without
limitation, any stockholder or
creditor of the Pledgor or the Issuer) and
no consent, license,
permit, approval or authorization of,
exemption by, notice or report
to, or registration, filing or declaration
with, any Governmental
Authority is required to be obtained by
the Pledgor in connection with
(a) the execution, delivery or performance
of this Agreement, (b) the
validity or enforceability of this
Agreement, (c) the perfection or
enforceability of the Pledgee's security
interest in the Collateral or
(d) except for compliance with or as may
be required by applicable
securities laws, the exercise by the
Pledgee of any of its rights or
remedies provided herein; provided, that
any Person acquiring the
voting securities of the Issuer or Newco
may require prior approval
from the Federal Energy Regulatory
Commission and the California
Public Utilities
Commission.
(v)
the execution, delivery and performance of this Agreement
will not violate any provision of any
applicable Law or regulation or
of any order, judgment, writ, award or
decree of any court, arbitrator
or Governmental Authority, domestic or
foreign, applicable to the
Pledgor, or of the certificate of
incorporation, operating agreement,
limited liability company agreement,
partnership agreement or by-laws
of the Pledgor or of any securities or
other interests issued by the
Pledgor or the Issuer, or of any mortgage,
deed of trust, indenture,
lease, loan agreement, credit agreement or
other material contract,
agreement or instrument or undertaking to
which the Pledgor or the
Issuer is a party or by which any of its
assets may be bound and will
not result in the creation or imposition
of (or the obligation to
create or impose) any lien or encumbrance
on any of the assets of the
Pledgor or the Issuer except as
contemplated by this Agreement;
(vi) all
of the Collateral consisting of Pledged Stock has been
duly and validly issued and acquired, is
fully paid and non-assessable
and is subject to no options to purchase
or similar rights; and
(vii) the pledge and collateral assignment
to the Pledgee of
the Collateral consisting of Pledged
Stock, together with continued
possession by the Pledgee of any
certificates, instruments, documents
or other writings evidencing the Pledged
Stock and/or the making of
relevant filings or recordings and/or any
other action required to be
taken in accordance with Section 3.2 (all
of which have been made or
taken, as the case may be), creates in
favor of the Pledgee a valid
and perfected first priority security
interest in such Collateral, and
the proceeds thereof, subject to no prior
Lien or encumbrance (other
than any Permitted Lien that is a
non-consensual lien arising by
operation of law) or to any agreement
purporting to grant to any third
party a Lien or encumbrance (other than
any Permitted Lien that is a
non-consensual lien arising by operation
of law, and other than the
Lien created by the Utility Stock Pledge
Agreement (35%) – New Tranche
B Loan) on the property or assets of the
Pledgor which would include
the Pledged Stock and the Pledgee is
entitled to all the rights,
priorities and benefits afforded by the
Uniform Commercial Code or
other relevant law as enacted in any
relevant jurisdiction to
perfected security interests in respect of
such Collateral.
(b) The Pledgor covenants and
agrees that it will defend the
Pledgee's right, title and security interest in and to the
Collateral and
the proceeds thereof against the claims and demands of all
persons
whomsoever; and the Pledgor covenants and agrees that it will have
like
title to and right to pledge any other property at any time
hereafter
pledged to the Pledgee as Collateral hereunder and will likewise
defend the
right thereto and security interest therein of the Pledgee.
17. JURISDICTION OF ORGANIZATION;
NAME. The Pledgor's name,
jurisdiction of organization and identification number are set
forth in
Annex B hereto. The Pledgor will not change its name or its
jurisdiction
of organization, except upon 15 days' prior written notice to
the
Collateral Agent and delivery to the Collateral Agent of all
additional
executed financing statements and other documents reasonably
requested by
the Collateral Agent to maintain the validity, perfection and
priority of
the security interests provided for herein.
18. PLEDGOR'S OBLIGATIONS ABSOLUTE,
ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional
and shall
remain in full force and effect without regard to, and shall not
be
released, suspended, discharged, terminated or otherwise affected
by, any
circumstance or occurrence whatsoever (except as provided under
Section
20), including, without limitation: (i) any renewal,
extension, amendment
or modification of or addition or supplement to or deletion from
any
Financing Document or any other instrument or agreement referred
to
therein, or any assignment or transfer of any thereof; (ii) any
waiver,
consent, extension, indulgence or other action or inaction under or
in
respect of any such agreement or instrument including, without
limitation,
this Agreement; (iii) any furnishing of any additional security to
the
Pledgee or its assignee or any acceptance thereof or any release of
any
security by the Pledgee or its assignee (except as provided under
Section
20); (iv) any limitation on any party's liability or obligations
under any
such instrument or agreement or any invalidity or unenforceability,
in
whole or in part, of any such instrument or agreement or any term
thereof;
or (v) any bankruptcy, insolvency, reorganization, composition,
adjustment,
dissolution, liquidation or other like proceeding relating to the
Pledgor
or the Issuer, or any action taken with respect to this Agreement
by any
trustee or receiver, or by any court, in any such proceeding,
whether or
not the Pledgor shall have notice or knowledge of any of the
foregoing.
19. REGISTRATION, ETC.
(a) If there shall have occurred and be
continuing an Event of Default, then upon receipt by the Pledgor
from the
Pledgee of a written request or requests that the Pledgor cause
any
registration, qualification or compliance under any Federal or
state
securities law or laws to be effected with respect to all or any
part of
the Collateral consisting of Pledged Stock, the Pledgor as soon
as
practicable and at its expense will cause such registration to be
effected
(and be kept effective) and will cause such qualification and
compliance to
be declared effected (and be kept effective) as may be so requested
if such
registration, qualification or compliance is necessary to permit
or
facilitate the sale and distribution of such Collateral, including,
without
limitation, registration under the Securities Act, as then in
effect (or
any similar statute then in effect), appropriate qualifications
under
applicable blue sky or other state securities laws and
appropriate
compliance with any other government requirements, provided, that
the
Pledgee shall furnish to the Pledgor such information regarding the
Pledgee
as the Pledgor may reasonably request in writing and as shall be
required
in connection with any such registration, qualification or
compliance. The
Pledgor will cause the Pledgee to be kept advised in writing as to
the
progress of each such registration, qualification or compliance and
as to
the completion thereof, will furnish to the Pledgee such number
of
prospectuses, offering circulars or other documents incident
thereto as the
Pledgee from time to time may reasonably request, and will
indemnify the
Pledgee and all others participating in the distribution of such
Collateral
against all claims, losses, damages and liabilities caused by any
untrue
statement (or alleged untrue statement) of a material fact
contained
therein (or in any related registration statement, notification or
the
like) or by any omission (or alleged omission) to state therein (or
in any
related registration statement, notification or the like) a
material fact
required to be stated therein or necessary to make the statements
therein
not misleading, except insofar as the same may have been caused by
an
untrue statement or omission based upon information furnished in
writing to
the Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee
shall determine to exercise its
right to sell all or any part of the Collateral consisting of
Pledged Stock
pursuant to Section 7 hereof, and the Collateral or the part
thereof to be
sold shall not, for any reason whatsoever, be effectively
registered under
the Securities Act, as then in effect, the Pledgee may sell such
Collateral
or part thereof, as the case may be, by private sale in such manner
and
under such circumstances as the Pledgee may deem necessary or
reasonably
advisable in order that such sale may legally be effected without
such
registration. Without limiting the generality of the
foregoing, in any
event the Pledgee (i) may proceed to make such private sale
notwithstanding
that a registration statement for the purpose of registering
such
Collateral or part thereof shall have been filed under such
Securities Act,
(ii) may approach and negotiate with a single possible purchaser to
effect
such sale, and (iii) may restrict such sale to a purchaser who
will
represent and agree that such purchaser is purchasing for its own
account,
for investment, and not with a view to the distribution or sale of
such
Collateral or part thereof. In the event of any such sale,
the Pledgee
shall incur no responsibility or liability, except to the extent
incurred
by reason of its gross negligence, bad faith or willful misconduct,
for
selling all or any part of the Collateral at a price which the
Pledgee, in
its sole and absolute discretion, deems reasonable under the
circumstances,
notwithstanding the possibility that a substantially higher price
might
have been realized if the sale were deferred until after
registration as
aforesaid.
20. TERMINATION;
RELEASE. After payment in full of the
Secured
Obligations and termination of the Credit Agreement, this Agreement
and the
security interest created hereby shall terminate (provided that
all
indemnities set forth herein including, without limitation, in
Section 11
hereof shall survive any such termination), and the Pledgee, at the
request
and expense of the Pledgor, will execute and deliver to the Pledgor
a
proper instrument or instruments acknowledging the satisfaction
and
termination of this Agreement, and will duly assign, transfer and
deliver
to the Pledgor (without recourse and without any representation
or
warranty) such of the Collateral as has not theretofore been sold
or
otherwise applied or released pursuant to this Agreement, together
with any
monies at the time held by the Pledgee or any of its sub-agents
hereunder.
21. NOTICES, ETC. All
notices, requests, demands or other
communications hereunder shall be made in the manner and with the
effect
provided in Section 9.3 of the Credit Agreement at the addresses
provided
below or at such other address as shall have been furnished in
writing by
the relevant Person to the party required to give notice
hereunder:
(a)
If to the Pledgor, at:
PG&E Corporation
Xxx Xxxxxx, Xxxxx Xxxxx Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Assistant Treasurer
Tel.: (000) 000-0000
Fax.: (000) 000-0000
(b)
If to the Pledgee, at:
Deutsche Bank Trust Company Americas
Corporate Trust and Agency Services
000 Xxxxx Xxx, XX: 0603
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx Day
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to the Administrative Agent at:
Xxxxxx Commercial Paper Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx/Xxxx Xxxxxx
Tel: (000) 000-0000/(000) 000-0000
Fax: (000) 000-0000/(000) 000-0000
22. WAIVER; AMENDMENT. None
of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any
manner
whatsoever unless in writing duly signed by the Pledgor and the
Pledgee.
23. MISCELLANEOUS. This
Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure
to the
benefit of and be enforceable by each of the parties hereto and
its
successors and assigns, provided that the Pledgor may not assign
any of its
rights or obligations under this Agreement without the prior
consent of the
Pledgee. The headings in this Agreement are for purposes of
reference only
and shall not limit or define the meaning hereof. This
Agreement may be
executed in any number of counterparts, each of which shall be an
original,
but all of which shall constitute one instrument. In the
event that any
provision of this Agreement shall prove to be invalid or
unenforceable,
such provision shall be deemed to be severable from the other
provisions of
this Agreement which shall remain binding on all parties
hereto. The
rights, powers, privileges and immunities of the Collateral Agent
set forth
in the Credit Agreement shall apply to the Collateral Agent as if
expressly
set forth herein.
24. GOVERNING LAW. THIS
AGREEMENT, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE AND MATTERS RELATING TO
THE
CREATION, VALIDITY, ENFORCEMENT OR PRIORITY OF THE SECURITY
INTERESTS
CREATED BY THIS AGREEMENT, SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF
(OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT AS
MAY BE
REQUIRED BY OTHER MANDATORY PROVISIONS OF LAW.
25. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT ANY OF
THEM MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING
OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE
OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR
ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS
PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDERS TO ENTER INTO THE CREDIT
AGREEMENT AND
THE OTHER FINANCING DOCUMENTS.
IN WITNESS WHEREOF, the Pledgor, the Pledgee, the
Administrative Agent have caused this Agreement to be executed
by
their duly
elected officers duly authorized as of the date first
above
written.
PLEDGOR
PG&E CORPORATION
XXXXX X.
XXXXXX
By _______________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Chief Financial
Officer
ADMINISTRATIVE AGENT
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
XXXXX X. XXXXX, XX.
By __________________
Name: Xxxxx X. Xxxxx,Xx.
Title: Authorized Signatory
PLEDGEE
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent
XXXXXXX XXXXX DAY
By __________________
Name: Xxxxxxx Xxxxx Day
Title: Vice President
ANNEX A
to
PLEDGE AGREEMENT
LIST OF PLEDGED STOCK
Number
Name
of
Type of
of
Certificate No.
Issuer
Interest Shares
Pacific Gas
and
Common
105,641,741 ZQU10
Electric
Company
Stock
____________________________________________________________________________
ANNEX B
to
PLEDGE AGREEMENT
Name of
Pledgor: PG&E
Corporation
Jurisdiction
of Organization: California
Identification
Number: C1953580
