REGISTRATION RIGHTS AGREEMENT
Dated as of July 1, 1997
by and between
CALPINE CORPORATION
and
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
SCOTIA CAPITAL MARKETS (USA) INC.
BANCAMERICA SECURITIES, INC.
CIBC WOOD GUNDY SECURITIES CORP.
-------------------------------
8 3/4% Senior Notes Due 2007
1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of July 1, 1997, by and among Calpine Corporation, a
Delaware corporation (the "Company"), and Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated, Salomon Brothers Inc, Scotia
Capital Markets (USA) Inc., BancAmerica Securities, Inc. and CIBC Wood Gundy
Securi ties Corp. (the "Purchasers").
This Agreement is made pursuant to the Purch ase Agreement,
dated of even date herewith (the "Purch ase Agreement"), between the Company and
the Purchasers, which provides for the sale by the Company to the Pur chasers of
an aggregate of $200,000,000 principal amount of the Company's 8 3/4% Senior
Notes Due 2007 (the "Senior Notes"). In order to induce the Purchasers to enter
into the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agree ment. The execution of this Agreement is a
condition to the Closing under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
Capitalized terms used herein without defini tion shall have
their respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Advice: See Section 4(o).
Closing Date: July 8, 1997, or such other
date as may be agreed upon for the sale and purchase of
the Senior Notes pursuant to the Purchase Agreement.
Company: Calpine Corporation, a Delaware
corporation.
Exchange Act: The Securities Exchange Act of
1934, as amended, and the rules and regulations of the
SEC promulgated thereunder.
Exchange Offer: The exchange offer by the
Company of Exchange Notes for Registrable Securities pursuant to Section 3(d)
hereof.
Exchange Offer Registration: A registration
under the Securities Act effected pursuant to Section
3(d) hereof.
Exchange Offer Registration Statement: An
-------------------------------------
exchange offer registration statement on Form S-4 or
Form S-1 (or, if applicable, on another appropriate
form) and all amendments and supplements to such regis
tration statement, in each case including the Prospectus
contained therein, all exhibits thereto and all material
incorporated by reference or deemed to be incorporated
by reference therein.
Exchange Notes: Securities issued by the Company under an
indenture containing terms identical to the Senior Notes (except that such
Exchange Notes (i) shall have been issued in an Exchange Offer and (ii) shall
have an interest rate of 8 3/4% per annum (9 1/4% per annum if such Exchange
Offer is not consummated by January 4, 1998), without provision for adjustment
as provided in paragraph 1 on the reverse of the Senior Notes), to be offered to
holders of Senior Notes in exchange for Senior Notes pursuant to the Exchange
Offer.
Indenture: The Indenture, dated as of July 8, 1997, between
the Company and The Bank of New York, as Trustee, pursuant to which the Senior
Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
regis tration statement in reliance upon Rule 430A), as amend ed or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement or
of the Exchange Notes, as the case may be, and all other amendments and
supplements to the Prospec tus, including post-effective amendments and all
materi al incorporated by reference or deemed to be incorporat ed by reference
in such Prospectus.
Registrable Securities: All Senior Notes
which are Restricted Securities.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration
statement of the Company which covers any of the Ex change Notes or Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration state ment,
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
state ment.
Restricted Securities: Any and all Senior Notes upon original
issuance thereof and at all times subsequent thereto until, as to any Senior
Note, (i) the sale of such Senior Note has been effectively registered under the
Securities Act and such Senior Note has been disposed of in accordance with the
Registration State ment relating thereto or (ii) it is distributed to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act or (iii) an Exchange Offer Registration has been
declared effective and such Senior Note has been ex changed for an Exchange Note
by a person who is not then deemed to be an Underwriter as defined in Section
2(11) of the Securities Act.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933,
as amended, and the rules and regulations promulgated by
the SEC thereunder.
Shelf Registration: See Section 3 hereof.
Special Counsel: Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Purchasers or such other special counsel as may be
designated by the holders of a majority in aggregate principal amount of
Registrable Securities outstanding.
TIA: The Trust Indenture Act of 1939, as
amended.
2. Securities Subject to this Agreement; Holders
(a) The securities entitled to the bene
fits of this Agreement are the Registrable Securities.
(b) A Person is deemed to be a holder of
Registrable Securities whenever such Person beneficially owns Registrable
Securities; provided, that only Regis trable Securities of holders who are
registered holders of Registrable Securities shall be counted for purposes of
calculating any proportion of holders of Registrable Securities entitled to take
action or give notice pursu ant to this Agreement.
3. Shelf Registrations; Exchange Offers
(a) Shelf Registrations. As promptly
as practicable and in no event later than December 1, 1997, the Company shall
prepare and file with the SEC a Registration Statement under the Securities Act
for an offering to be made on a continuous basis pursuant to Rule 415 (or any
similar rule that may be adopted by the SEC) under the Securities Act covering
all the Registra ble Securities (the "Shelf Registration").
(b) The Shelf Registration shall be on
Form S-1 or another appropriate form permitting regis tration of such
Registrable Securities for resale by such holders in the manner or manners
designated by them.
(c) The Company shall use its best ef
forts to cause the Shelf Registration to become effec tive under the Securities
Act in accordance with Section 3(a) hereof and shall keep the Shelf Registration
con tinuously effective for a period of two years from the Closing Date or such
shorter period which will terminate when all Registrable Securities covered by
the Shelf Registration are no longer Restricted Securities. The Company shall
also supplement or make amendments to any Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used by
the Company or if required by the Securities Act or if reasonably requested by
holders of a majority of the principal amount of the Registrable Securities then
outstanding covered by the Shelf Registration.
(d) Exchange Offer. Notwithstanding the
provisions of Section 3(a), at the option of the Compa ny, to the extent any
applicable law or applicable interpretation of the staff of the SEC would permit
holders thereafter to resell Exchange Notes without restriction, the Company
may, in lieu of complying with Section 3(a), cause to be filed an Exchange Offer
Regis tration Statement covering the offer by the Company to
the holders of Senior Notes to exchange all of the Registrable Securities for
Exchange Notes, to have such Exchange Offer Registration Statement declared
effective
by the SEC not later than January 4, 1998 and to have
such Registration Statement remain effective until the
closing of the Exchange Offer. The Company shall com
mence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC by mailing the related exchange
offer Pro spectus and accompanying documents to each holder of Senior Notes
stating, in addition to such other disclo sures required by applicable law:
(i) that the Exchange Offer is
being made pursuant to this Agreement and that all
Registrable Securities validly tendered will be
accepted for exchange;
(ii) the date of acceptance for
exchange (which shall be a period of at least 60 days from the date
such notice is mailed) (the "Exchange Date");
(iii) that any Registrable Security
not tendered will remain outstanding and continue to accrue interest
but, except as set forth in the last paragraph of this Section 3(d),
will not re tain any rights under this Agreement;
(iv) that holders of Senior Notes
electing to have a Registrable Security exchanged pursuant to the
Exchange Offer will be required to surrender such Registrable Security,
together with the enclosed letters of transmittal, to the insti tution
and at the address (located in the Borough of Manhattan, The City of
New York) specified in the notice prior to the close of business on the
last Exchange Date; and
(v) that holders of Senior Notes
will be entitled to withdraw their election not later than the close of
business on the last Ex change Date, by sending to the institution and
at the address (located in the Borough of Manhattan, The City of New
York) specified in the notice a telegram, telex, facsimile transmission
or letter setting forth the name of such holder, the princi pal amount
of Registrable Securities delivered for exchange and a statement that
such holder is with
1
drawing its election to have such Senior Notes ex
changed.
As soon as practicable after the Exchange Date, the Company
shall:
(i) accept for exchange Registrable
Securities or portions thereof tendered and not
validly withdrawn pursuant to the Exchange Offer;
and
(ii) deliver, or cause to be deliv
ered, to the Trustee for cancellation all Registra ble Securities or
portions thereof so accepted for exchange by the Company and issue, and
cause the trustee under the indenture governing the Exchange Notes to
promptly authenticate and mail to each holder, a new Exchange Note, as
the case may be, equal in principal amount to the principal amount of
the Registrable Securities surrendered by such Holder.
The Company shall use its best efforts to com plete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the Securi ties Act, the Exchange Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions, other than that the Exchange Offer does not violate
applicable law or any applicable interpretation of the staff of the SEC. The
Company shall inform the Purchasers of the names and addresses of the holders of
Senior Notes to whom the Ex change Offer is made, and the Purchasers shall have
the right to contact such holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
In connection with the Exchange Registration, the Company will
provide a letter to the staff of the SEC that contains statements and
representations sub stantially in the form set forth in Mary Kay Cosmetics, Inc.
(no-action letter available June 5, 1991), Morqan Stanley & Co. Incorporated
(no-action letter available June 5, 1991), Warnaco, Inc. (no-action letter
available October 11, 1991), Shearman & Sterling (no-action letter available
July 2, 1993), Grupo Financiero InverMexico, S.A. (no-action letter available
April 4, 1995) and no- action letters to similar effect.
As provided in the Indenture, in the event that neither the
Shelf Registration nor the Exchange Offer Registration Statement is declared
effective by January 4, 1998, the interest rate on the Senior Notes shall be
permanently increased, beginning at such time, by 1/2% per annum.
4. Registration Procedures
In connection with the Company's registration obligations
pursuant to Section 3 hereof, the Company shall use its best efforts to effect
such registrations to permit the consummation of the Exchange Offer or the sale
of such Registrable Securities in accordance with the intended method or methods
of disposition thereof, and pursuant thereto the Company shall as expeditiously
as possible:
(a) prepare and file with the SEC,
within the time period specified in Section 3, a Regis tration Statement or
Registration Statements on any appropriate form under the Securities Act, which
form, in the case of a Shelf Registration, shall be available for the sale of
the Registrable Securities by the hold ers thereof in accordance with the
intended method or methods of distribution thereof, and use its best ef forts to
cause each such Registration Statement to become effective and remain effective
as provided here in; provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto (including
documents which would be incorporated or deemed to be incorporated therein by
reference and amendments to such documents, other than documents required to be
filed pursuant to the Exchange Act), the Company shall furnish to the Special
Counsel copies of the Registration Statement or Prospectus and all such
documents in the form proposed to be filed at least five business days prior
thereto and with respect to amend ments or supplements thereof, at least two
business days prior thereto, which documents will be subject to the review of
the Special Counsel, and the Company shall not file any such Registration
Statement or amendment there to or any Prospectus or any supplement thereto
(includ ing such documents which, upon filing, would be incorpo rated or deemed
to be incorporated by reference therein and amendments to such documents, other
than documents required to be filed pursuant to the Exchange Act) to which the
Special Counsel shall reasonably object on a
timely basis, unless the Company is advised by its counsel that such
Registration Statement or amendment thereto or any Prospectus or supplement
thereto is required to be filed by applicable law;
(b) prepare and file with the SEC such
amendments and post-effective amendments to each Regis tration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securi ties Act;
(c) notify the selling holders of Regis
trable Securities (except in the cases of clauses (ii) and (iii) hereof) and
their Special Counsel promptly, and (if requested by any such person) confirm
such notice in writing, (i) when a Prospectus or any Prospec tus supplement or
post-effective amendment related to such Registrable Securities has been filed,
and, with respect to a Registration Statement or any post-effec tive amendment
related to such Registrable Securities, when the same has become effective, (ii)
of the receipt of any comments from the SEC, (iii) of any request by the SEC for
amendments or supplements to a Registration Statement or related Prospectus or
for additional infor mation, (iv) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (v) if at any time the representations and
warranties of the Company contained in any agreement contemplated by paragraph
(1) below in connection with the sale of Restricted Securities by selling
holders thereof cease to be true and correct, (vi) of the re ceipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale or
exchange in any jurisdiction of the United States of America or the initiation
of any proceeding for such purpose, (vii) of the happening of any event which
makes any statement of a material fact made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue or which requires the making of any changes in a
Registration Statement or related Prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circum stances under which they were made, not
misleading, and (viii) of the Company's determination that a post effective
amendment to a Registration Statement would be appropriate;
(d) use every reasonable effort to
obtain the withdrawal of any order suspending the effec tiveness of a
Registration Statement or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale or
exchange in any jurisdiction of the United States of America, as promptly as
practicable;
(e) if reasonably requested by any
holder of Registrable Securities covered by a Registra tion Statement, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
information as such holder reasonably requests to be included there in as may be
required by applicable law, (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
such post-effective amendment, and (iii) supplement or make amendments to any
Registration Statement if reasonably requested by any holder of Registrable
Securities covered by such Registration Statement as may be required by
applicable law;
(f) in the case of a Shelf Registration,
furnish to each selling holder of Registrable Securities and the Special
Counsel, without charge, at least one conformed copy of the Registration
Statement or State ments and any post-effective amendment thereto, includ ing
financial statements and schedules, all documents incorporated therein by
reference or deemed incorporated therein by reference and all exhibits
(including those previously furnished or incorporated by reference), at the
earliest practicable time under the circumstances after the filing of such
documents with the SEC;
(g) in the case of a Shelf Registration,
deliver to each selling holder of Registrable Securities and the Special
Counsel, without charge, as many copies of the Prospectus or Prospectuses
(including each pre liminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the
Company consents to the use of such Prospectus or any amendment or supplement
thereto in accordance with applicable law by each of the selling holders of
Regis trable Securities in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(h) prior to any public offering or ex
change of Registrable Securities, to use its best ef forts to register or
qualify or cooperate with the selling holders of Registrable Securities and
their Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale or exchange, as the case may be, under the
securities or blue sky laws of such state or local jurisdictions as any seller
reasonably requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things neces sary
or advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, howev er,
that the Company will not be required to (A) qualify generally to do business in
any jurisdiction where it is not then so qualified, (B) take any action which
would subject it to general service of process in any such jurisdiction where it
is not then so subject or (C) register or qualify securities prior to the
effective date of any Registration Statement under Section 3 hereof;
(i) in the case of a Shelf Registration,
cooperate with the selling holders of Registrable Secu rities to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restric tive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names, in all cases consistent with the requirements set
forth in the Indenture, as the holders may request;
(j) subject to the exceptions contained
in (A), (B) and (C) of subsection (h) hereof, cause the Registrable Securities
covered by the applicable Regis tration Statement to be registered with or
approved by such other federal, state and local governmental regula
tory agencies or authorities in the United States as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such Registrable
Securi ties and cooperate with each seller of Registrable Securities in
connection with any filings required to be made with the National Association of
Securities Deal ers, Inc.;
(k) upon the occurrence of any event
contemplated by Section 4(c)(vii) or 4(c)(viii) above, as promptly as
practicable thereafter, prepare and file with the SEC a supplement or
post-effective amendment to the applicable Registration Statement or a
supplement to 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 Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(l) in the case of a Shelf Registration,
enter into such customary agreements and take all such other actions in
connection therewith (including those reasonably requested by the holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Secu rities including, but not
limited to, an underwritten offering and in such connection, (i) to the extent
possible, make such representations and warranties to the holders and any
underwriters of such Registrable Securities with respect to the business of the
Company and its subsidiaries, the Registration Statement, Pro spectus and
documents incorporated by reference or deemed incorporated by reference, if any,
in each case, in form, substance and scope 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 (which counsel and
opinions, in form, scope and substance, shall be reason ably satisfactory to
Special Counsel) addressed to each selling holder and underwriter of Registrable
Securi ties, covering the matters customarily covered in opin ions requested in
underwritten offerings, (iii) obtain "cold comfort" letters from the independent
certified public accountants of the Company (and, if necessary, any other
certified public accountant of any subsidiary
of the Company, or of any business acquired by the Company for which financial
statements and financial data is or is required to be included in the Registra
tion Statement) addressed to each selling holder and underwriter of Registrable
Securities, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connec tion with
underwritten offerings, and (iv) deliver such documents and certificates as may
be reasonably request ed by the holders of a majority in principal amount of the
Registrable Securities being sold to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (i) above
and to evidence compliance with any customary conditions con tained in an
underwriting agreement;
(m) in the case of a Shelf Registration,
make available for inspection by a representative of the holders of Registrable
Securities being sold, Special Counsel and an accountant retained by such
selling hold ers, in a manner designed to permit underwriters to sat isfy their
due diligence investigation under the Securi ties Act, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company and its subsidiaries to
supply all information reasonably requested by any such representative, attor
ney or accountant in connection with such registration; provided, however, that
any records, information or documents that are designated by the Company as
confi dential at the time of delivery of such records, infor mation or documents
shall be kept confidential by such persons, unless (i) such records, information
or docu ments are in the public domain or otherwise publicly available, (ii)
disclosure of such records, information or documents is required by court or
administrative order, (iii) disclosure of such records, information or
documents, in the written opinion of counsel to such person, is otherwise
required by law (including, without limitation, pursuant to the requirements of
the Securi ties Act) or (iv) disclosure of such records, informa tion or
document is necessary to avoid or correct a misstatement or omission in the
Registration Statement, Prospectus supplement or any post-effective amendment;
(n) provide an indenture trustee for the
Registrable Securities or Exchange Notes, as the case may be, and cause the
indenture (or the indenture gov erning the Exchange Notes) to be qualified under
the TIA
not later than the effective date of any registration; and in connection
therewith, cooperate with the trustee to effect such changes to such indenture
as may be required for such indenture to be so qualified in accor dance with the
terms of the TIA and execute, and use its best efforts to cause the trustee to
execute, all docu ments as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner; and
(o) comply with all applicable rules and
regulations of the SEC and, in the case of a Shelf Registration, make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder 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), com mencing on the
first day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statement shall cover said
12-month period.
The Company may require each seller of Regis trable Securities
under a Shelf Registration to furnish to the Company such information regarding
the distribu tion of such Registrable Securities as the Company may from time to
time reasonably request in writing and each holder in acquiring such Registrable
Securities agrees to supply such information to the Company promptly upon such
request.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, in the event of a Shelf Registration, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4(c)(iii), 4(c)(iv), 4(c)(vi), 4(c)(vii) or 4(c)(viii)
hereof, such holder will forthwith discontinue disposition of such Registra ble
Securities covered by such Registration Statement or Prospectus until such
holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the appli cable Prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated or deemed to be incorporated by reference in such Prospectus.
5. Registration Expenses
The Company shall pay all fees and expenses incident to the
performance of or compliance with this Agreement by the Company including,
without limitation, (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (in cluding reasonable fees and disbursements of counsel for any
underwriters or holders in connection with blue sky qualification of any of the
Exchange Notes or Regis
trable Securities), (iii) all expenses of any persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees and (v) the fees and disbursements of counsel for the
Company, Special Counsel to the holders of Registra ble Securities and of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding fees of counsel to the underwriters
and underwriting dis counts and commissions and transfer taxes, if any, relating
to the sale or disposition of Registrable Securities by a holder of Registrable
Securities.
6. Indemnification
The Company agrees to indemnify and hold harm less the
Purchasers and each holder of Registrable Secu rities and each person, if any,
who controls the Pur chasers or any holder of Registrable Securities within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(includ ing, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a mate rial fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended and supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to the Purchas ers or any holder of Registrable Securities furnished to the
Company in writing by such Purchasers or holder of Registrable Securities
expressly for use therein.
In connection with any Shelf Registration in which a holder of
Registrable Securities is participat ing, in furnishing information relating to
such holder of Registrable Securities to the Company in writing expressly for
use in such Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto, the holders of such Registrable
Securities agree severally and not jointly, to indemnify and hold harmless the
Purchasers and each person, if any, who controls the Purchasers within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Company, its directors, its officers who sign a Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses reason
ably incurred in connection with defending or investi gating any such action or
claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to such information relating to such holder of
Registrable Securities furnished in writing by or on behalf of such holder of
Registrable Securities expressly for use in the Registration State ment, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
The Purchasers agree, severally and not joint ly, to indemnify
and hold harmless the Company, the holders of Registrable Securities, the
directors of the Company, the officers of the Company who sign the Regis tration
Statement and each person, if any, who controls
the Company or any holder of Registrable Securities within the meaning of either
Section 15 of the Securi ties Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabili ties (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defend ing or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to the Purchasers furnished to the Company in writing
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amend ments or supplements thereto.
In case any proceeding (including any govern mental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to any of the three preceding paragraphs, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnify ing party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemni fied party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemni fied
party shall have mutually agreed to the retention of such counsel or (ii) the
parties to any such proceed ing (including any impleaded parties) include both
the indemnifying party and the indemnified party and repre sentation of both
parties by the same counsel would be inappropriate due to the actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdic tion, be liable for (a) the fees and expenses of more than one
separate firm (in addition to any local coun
2
sel) for the Purchasers and all persons, if any, who control the Purchasers
within the meaning of either Sec tion 15 of the Securities Act or Section 20 of
the Exchange Act, (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Regis tration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
holders of Registrable Securities and all persons, if any, who control any
holders of Registrable Securities within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In
such case involving the Purchasers and such control persons of the Purchasers,
such firm shall be designated in writing by Credit Suisse First Boston
Corporation. In such case involving the holders of Registrable Secu rities and
such controlling persons of holders of Regis trable Securities, such firm shall
be designated in writing by holders of a majority in aggregate principal amount
of Registrable Securities. In all other cases, such firm shall be designated by
the Company. The indemnifying party shall not be liable for any settle ment of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settle ment or judgment. Notwithstanding the
foregoing sen tence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indem nified party for fees and expenses of
counsel as contem plated by the second and third sentences of this para graph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent, provided that (i) such set
tlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement unless the indemni fying party has contested such
obligation and provides reasonable assurances that such payment can be made upon
resolution of such dispute. No indemnifying party shall, without the prior
written consent of the indemni fied party, effect any settlement of any pending
or threatened proceeding in respect of which any indemni
fied party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first, second or
third paragraph of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such propor tion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that result ed in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
holders of Registrable Securi ties on the one hand and the Purchasers 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 holders
of Registrable Securities or by the Purchasers and the parties', relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Sec tion 6 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immedi ately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no holder of Registrable
Securities shall be required to indemnify or contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold by
such
holder of Registrable Securities and distributed to the public were offered to
the public exceeds the amount of any damages that such holder of Registrable
Securities has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or al leged omission. No person guilty of
fraudulent misrep resentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrep resentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indem nified party at law or in equity.
The indemnity and contribution provisions con tained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Purchasers or any person controlling
the Purchasers, any holder of Registrable Securities or any person controlling
the holder of Registrable Securities, or the Company, its officers or directors
or any person controlling the Company.
7. Miscellaneous
(a) Remedies. In the event of a breach
by the Company of any of its obligations under this Agreement, each holder of
Registrable Securities, in addition to being entitled to exercise all rights
grant ed by law, including recovery of damages, will be enti tled to specific
performance of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, they shall waive the defense that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The
Company shall not, on or after the date of this Agree ment, enter into any
agreement with respect to its secu rities which is inconsistent with the rights
granted to the holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof.
(c) Amendments and Waivers. The provi
sions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supple
mented, 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
majori ty of the then outstanding aggregate principal amount of Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter which relates exclusively to the
rights of holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which does not directly or indirectly
affect the rights of other holders of Registrable Secu rities may be given by
holders of at least a majority in aggregate principal amount of the Registrable
Securities being sold by such holders.
(d) Notices. All notices and other com
munications provided or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, or telecopier:
(i) if to a holder of Registrable
Securities, at the most current address given by such holder to the
Company in accordance with the provisions of this Section 7(d), which
address ini tially is, with respect to the Purchasers, the ad dress set
forth on the first page of the Purchase Agreement; and
(ii) if to the Company, initially
at its address set forth on the first page of the Purchase Agreement
and thereafter by such other address, notice of which is given in
accordance with the provision of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being sent by next-day solvent air courier; when answered back, if
telexed; and when re ceipt acknowledged, if telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the person giving the same to the Trustee
under the Inden ture at the address specified in such Indenture.
(e) Successors and Assigns. This Agree
ment shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties, in
3
cluding without limitation and without the need for an express assignment,
subsequent holders of Registrable Securities.
(f) Counterparts. This Agreement may be
executed in any number of counterparts and by the par ties 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.
(g) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(h) Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without regard to principles of conflicts of laws.
(i) Severability. If any term, provi
sion, covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provi sions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantial ly the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipu lated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
(j) Entire Agreement. This Agreement is
intended by the parties as a final expression of their agreement, and is
intended to be a complete and exclu sive statement of the agreement and
understanding of the parties hereto in respect of the subject matter con tained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein, with respect to the registration
rights granted by the Company with respect to the secu rities sold pursuant to
the Purchase Agreement. This Agreement supersedes all prior agreements and under
4
standings between the parties with respect to such
subject matter.
(k) Securities Held by the Company or its Affiliates. Whenever
the consent or approval of holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
any of its affiliates (as such term is de fined in Rule 405 under the Securities
Act) (other than the Purchasers or subsequent holders of Registrable Securities
if such subsequent holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the holders of such
required percentage or amount.
5
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CALPINE CORPORATION
By:_________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
SCOTIA CAPITAL MARKETS (USA) INC.
BANCAMERICA SECURITIES, INC.
CIBC WOOD GUNDY SECURITIES CORP.
By: CREDIT SUISSE FIRST BOSTON
CORPORATION
By:_________________________________
Name:
Title:
6