CALENERGY CAPITAL TRUST
6 1/4% CONVERTIBLE PREFERRED SECURITIES
TERM INCOME DEFERRABLE EQUITY SECURITIES (TIDES)SM
(LIQUIDATION PREFERENCE $50 PER EACH OF THE TIDES)
GUARANTEED TO A LIMITED EXTENT BY, AND
CONVERTIBLE INTO COMMON STOCK OF,
CALENERGY COMPANY, INC.
REGISTRATION RIGHTS AGREEMENT
April 10, 1996
CS FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, N.Y. 10055
Dear Sirs:
CalEnergy Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust") by CalEnergy Company, Inc., a
Delaware corporation (the "Guarantor"), proposes to issue and sell to CS First
Boston Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Purchasers"), upon the terms set forth in a purchase agreement dated April 3,
1996 (the "Purchase Agreement"), among the Purchasers, the Guarantor and the
Trust 6 1/4% Convertible Preferred Securities Term Income Deferrable Equity
Securities (TIDES)SM or TIDESSM (liquidation preference $50 per each of the
TIDES) (the "TIDES") (the "Initial Placement"). As an inducement to you to
enter into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Trust and the Guarantor agree with you, (i) for
the benefit of the Purchasers and (ii) for the benefit of the holders from
time to time of the TIDES, the 6 1/4% Convertible Junior Subordinated
Debentures Due 2016 (the "Debentures") and the Common Stock, par value $0.0675
per share (the "Common Stock"), of the Guarantor (together with the related
Rights) issuable upon conversion of the TIDES or the Debentures (collectively,
together with the Guarantee of the Guarantor of the TIDES, the
"Securities"), including the Purchasers (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Confidential Offering Circular dated April 4, 1996, in
respect of the TIDES. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers selected or approved by the Trust and the
Guarantor in accordance with the provisions set forth in Section 6 hereof,
that shall administer an underwritten offering, if any.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended
or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities.
"Registrable Securities" means, with respect to any Holder, all
Securities held by such Holder; provided, however, that a Security ceases to
be a Registrable Security when (i) it has been effectively registered under
the Act and disposed of in accordance with the Shelf Registration Statement or
(ii) it is, in the written opinion of counsel to the Trust and the Guarantor,
permitted to be freely sold or
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distributed to the public pursuant to any exemption from the registration
requirements of the Securities Act, including subsection (k) of Rule 144, but
excluding Rule 144A; and provided that all references to Registrable Securities
herein shall mean, with respect to any Security or Securities, collectively the
associated TIDES, Debentures, shares of Common Stock, Rights and Guarantee of
such TIDES and shall not be deemed to apply separately in respect of such
associated Securities.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
covering resales of the Registrable Securities of the Trust and the Guarantor
pursuant to the provisions of Section 2 hereof filed with the Commission which
covers some or all of the Registrable Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement,
selected or approved by the Trust and the Guarantor in accordance with the
provisions set forth in Section 6 hereof.
2. Shelf Registration. (a) The Trust and the Guarantor shall as promptly
as reasonably practicable prepare and file with the Commission and thereafter
shall each use its reasonable best efforts to cause to be declared effective
under the Act as soon as reasonably practicable, but (subject to Section 2(d)
below) in no event later than October 7, 1996, a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders
from time to time in accordance with the methods of distribution set forth in
such Shelf Registration Statement, provided, however, that no Holder shall be
entitled to have the Registrable Securities held by it covered by such Shelf
Registration unless such Holder is in compliance with Section 3(m) hereof.
(a) The Trust and the Guarantor shall each use its reasonable best
efforts (i) to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders
for a period of three years from the date the Shelf Registration Statement is
declared effective or such shorter period that will terminate upon the earlier
of the following: (A) when all the TIDES covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement, (B)
when all Debentures issued to Holders in respect of TIDES that had not been
sold pursuant to the Shelf Registration Statement have been sold pursuant to
the Shelf Registration Statement, (C) when all shares of Common Stock
(together with the related Rights) issued upon conversion of any such TIDES or
any such Debentures that had not been sold pursuant to the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement and (D)
when, in the written opinion of counsel to the Trust and the Guarantor, all
outstanding Securities have ceased to be Registrable Securities (in any such
case, such period being called the "Shelf Registration Period") and (ii) after
the effectiveness of the Shelf Registration Statement, promptly upon the
request of any Holder to take any action reasonably necessary to register the
sale of any Registrable Securities of such Holder on such Shelf Registration
Statement and to identify such Holder as a selling securityholder.
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(b) In the event of a "Registration Default" (as defined in the
Indenture governing the Debentures (the "Indenture") and in the Amended and
Restated Declaration of Trust of the Trust, dated as of April 4, 1996 (the
"Declaration")), then the per annum interest rate on the Debentures and the
TIDES will increase by 50 basis points (.50%), from and including the date on
which any such Registration Default shall occur (or be deemed to occur as
described in the Indenture and the Declaration) to but excluding the date on
which all Registration Defaults have been cured or deemed cured as described
in the Indenture and the Declaration, all subject to the terms and conditions
of the Indenture and the Declaration.
(c) Notwithstanding any other provision hereof, the Trust and the
Guarantor or the Guarantor acting alone may postpone or suspend the filing or
the effectiveness of the Shelf Registration Statement (or any amendments or
supplements thereto), or the sale of Securities pursuant thereto, if (i) such
action is required by applicable law or regulation, or (ii) such action is
taken in good faith and for valid business reasons (not including avoidance of
the Trust's and Guarantor's obligations hereunder), including the acquisition
or divestiture of assets, other pending corporate developments, public filings
with the Commission or other similar events, so long as the Trust and the
Guarantor promptly thereafter comply with the requirements of Section 3(i)
hereof, if applicable. The Trust and the Guarantor shall be deemed not to have
used their reasonable best efforts to keep the Shelf Registration Statement
effective during the requisite period if either the Trust or the Guarantor
intentionally takes any action not referred to in clause (i) or (ii) of this
Section 2(d) that would result in Holders of Registrable Securities covered
thereby not being able to offer and sell any such Registrable Securities during
that period. Notwithstanding the occurrence of any event referred to in such
clauses (i) or (ii) (a "Suspension"), such event shall not, except as set forth
in the Indenture and the Declaration, suspend, postpone or in any other manner
affect the running of the time period by which the Shelf Registration Statement
must be declared effective, or during which it must remain effective, in order
to prevent the occurrence of a Registration Default pursuant to the Indenture or
the Declaration, and, if the filing or effectiveness of the Shelf Registration
Statement is postponed or suspended as a result of a Suspension, a Registration
Default shall nonetheless exist under the Indenture and the Declaration if all
other requirements set forth for the occurrence of a Registration Default shall
be satisfied, and the provisions of the Debentures and the TIDES requiring the
payment of additional interest during the period of such Registration Default,
as set forth in the Indenture and the Declaration, shall be applicable. The
Trust and the Guarantor agree to notify the Holders of the occurrence of a
Suspension as promptly as practicable after such occurrence and to mail notice
thereof to Holders reasonably promptly following the termination of any
suspension.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Guarantor shall furnish to the Purchasers, prior
to the filing thereof with the Commission, a copy of any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if
any, to the Prospectus included therein (provided that, for this purpose,
amendments or supplements shall not be deemed to include documents
incorporated by reference into such Shelf Registration Statement) and shall
each use its reasonable best efforts to reflect in each such document, when so
filed with the Commission, such comments as the Purchasers reasonably may
propose on a timely basis.
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(b) The Trust and the Guarantor shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the Securities
Act and the Exchange Act and the respective rules and regulations thereunder,
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, 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 not misleading and (iii) any Prospectus forming part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading (except, in
each case, for any untrue statements of a material fact or omissions of a
material fact made in reliance on and in conformity with information furnished
to the Guarantor or the Trust by or on behalf of Holders or underwriters).
(c) (1) The Trust and the Guarantor shall advise the Purchasers and, in
the case of clause (i), the Holders and, if requested by the Purchasers or any
such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
(exclusive of documents incorporated by reference) has become
effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Trust and the Guarantor shall advise the Purchasers and the
Holders and, if requested by the Purchasers or any such Holder, confirm
such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) of the receipt by the Trust or the Guarantor of any
notification with respect to the suspension of the qualification of
the securities included therein for sale in any jurisdiction or the
initiation of any proceeding for such purpose;
(iii) of the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus
(exclusive of documents incorporated by reference) so that, as of
such date, the Shelf Registration Statement and the Prospectus do
not contain an untrue statement of a material fact and no not omit
to state a material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading (which advice may be accompanied by an instruction that
such notice constitutes material non-public information and to
suspend the use of the Prospectus until the requisite changes have
been made), and which instruction shall require that such Holders
shall not communicate such material non-public information to any
third
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party and shall not sell or purchase, or offer to sell or
purchase any securities of the Trust or the Guarantor after receipt
of such advice and prior to the effectiveness of any action
required to be taken by the Trust or the Guarantor pursuant to
Section 3(i) hereof; and
(iv) if the Guarantor determines that the filing of a
post-effective amendment to the Registration Statement would be
appropriate.
(d) The Trust and the Guarantor shall use their reasonable best efforts
to prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(e) The Trust and the Guarantor shall furnish to each Holder of
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto (including any reports or other documents
incorporated therein by reference), including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits (including
those incorporated by reference).
(f) The Trust and the Guarantor shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage of
any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and each of the Trust and the Guarantor consents to the
use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Securities and the underwriters, if any, in connection with
the offering and sale of the Securities covered by the Prospectus or any
amendment or supplement thereto during the Shelf Registration Period, provided
that such use complies with this Agreement and with all applicable laws and
regulations.
(g) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Guarantor shall register or qualify
such Securities or cooperate with the Holders of Securities included therein
and their respective counsel in connection with the registration or
qualification of such Securities for offer and sale under the securities or
blue sky laws of such jurisdictions in the United States as any such Holders
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of
the Securities covered by such Shelf Registration Statement; provided,
however, that neither the Trust nor the Guarantor will be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of process or
to taxation in any such jurisdiction where it is not then so subject.
(h) Unless any Securities shall be in book-entry only form, the Trust
and the Guarantor shall cooperate with the Holders of Securities to facilitate
the timely preparation and delivery of certificates representing Securities to
be sold pursuant to any Shelf Registration Statement free of any restrictive
legends and in such permitted denominations and registered in such names as
Holders may request in connection with the sale of Securities pursuant to such
Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by Section
3(c)(2)(iii), subject to Section 2(d), the Trust and the Guarantor shall
reasonably promptly prepare a post-effective amendment to any
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Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except, in each
case, for an untrue statement of a material fact or omission of a material
fact made in reliance on and in conformity with written information furnished
to the Guarantor or the Trust by or on behalf of Holders or underwriters
specifically for use therein). The Trust and the Guarantor agree to notify the
Holders to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and the Holders shall suspend use of the
Prospectus, and not communicate such material non-public information to any
third party, and not sell or purchase, or offer to sell or purchase, any
securities of the Trust or the Guarantor, until the Trust or the Guarantor
have amended or supplemented the Prospectus so it does not contain any such
misstatement or omission. At such time as such public disclosure is otherwise
made or the Trust and the Guarantor determine in good faith that such
disclosure is not necessary, the Trust and the Guarantor agree promptly to
notify the Holders of such determination and to amend or supplement the
Prospectus if necessary, so it does not contain any such untrue statement or
omission therein and to furnish the Holders such numbers of copies of the
Prospectus as so amended or supplemented as the Holders may reasonably
request.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Guarantor shall provide a CUSIP number
for the TIDES and the Debentures in the event of and at the time of any
distribution thereof to Holders, registered under such Shelf Registration
Statement, and provide the applicable trustee with certificates for such
Securities, in a form eligible for deposit with The Depository Trust Company.
(k) The Trust and the Guarantor shall use their best efforts to comply
with all applicable rules and regulations of the Commission and shall make
generally available to their security holders or otherwise provide in
accordance with Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable Shelf Registration Statement an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act.
(l) The Trust and the Guarantor shall use their reasonable best efforts
to cause the Indenture, the Declaration and the Guarantee to be qualified
under the Trust Indenture Act in a timely manner.
(m) The Trust and the Guarantor may require each Holder of Securities to
be sold pursuant to any Shelf Registration Statement to furnish to the Trust
and the Guarantor such information regarding the Holder and the distribution
of such Securities as the Trust and the Guarantor may from time to time
reasonably require for inclusion in such Shelf Registration Statement and the
Guarantor and the Trust may exclude from such registration the Securities of
any Holder that fails to furnish such information within a reasonable time
after receiving such request.
(n) The Trust and the Guarantor shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters
reasonably agree should be included therein and to which the Trust and the
Guarantor do not reasonably object and shall make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable after
they are notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
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(o) Subject to Section 6 and Section 2(d), the Trust and the Guarantor
shall enter into such customary agreements (including underwriting agreements
in customary form) which are reasonably acceptable to the Trust and the
Guarantor and shall take all other reasonably requested actions in order to
expedite or facilitate the registration or the disposition of the Registrable
Securities, and in connection therewith, if an underwriting agreement is
entered into, cause the same to contain indemnification provisions and
procedures substantially identical to those set forth in Section 5 (or such
other provisions and procedures acceptable to the Managing Underwriters, if
any, and reasonably acceptable to the Guarantor and the Trust) with respect to
all parties to be indemnified pursuant to Section 5.
(p) Subject to Section 6 and Section 2(d), the Trust and the Guarantor
shall (i) make reasonably available for inspection by the Holders of
Securities to be registered thereunder, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Holders or any such underwriter all
reasonably requested customary and relevant financial and other records,
pertinent corporate documents and properties of the Trust and the Guarantor
and its subsidiaries; (ii) cause the Guarantor's officers, directors and
employees and the Issuer Trustees to supply all such information reasonably
requested by such Holders or any such underwriter, attorney, accountant or
agent in connection with any such Shelf Registration Statement as is customary
for similar due diligence examinations, in each case pursuant to
confidentiality arrangements reasonably requested by the Guarantor and the
Trust; provided, however, that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
the Holders and the other parties entitled thereto by one counsel designated
by and on behalf of such Holders and reasonably acceptable to the Guarantor
and the Trust; (iii) make such representations and warranties to the Holders
of Securities registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily made by the Guarantor to Holders or to
underwriters in underwritten offerings; (iv) obtain opinions of counsel to the
Trust and the Guarantor (who may be the General Counsel of the Guarantor) and
updates thereof addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions requested by
Holders or underwriters in underwritten offerings (it being agreed that the
matters to be covered by such opinion shall include, without limitation, as of
the date of the opinion and as of the effective date of the Shelf Registration
Statement or most recent post-effective amendment thereto, as the case may be,
the absence from such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, including the documents incorporated
by reference therein, of an untrue statement of a material fact or the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; (v) obtain "cold comfort" letters
and updates thereof from the independent certified public accountants of the
Guarantor (and, if necessary, any other independent certified public
accountants of any subsidiary of the Guarantor or of any business acquired by
the Guarantor for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to
each such Holder of Securities registered thereunder and the underwriters, if
any, in customary form and covering matters of the type customarily covered in
"cold comfort" letters delivered to Holders or underwriters in connection with
underwritten offerings; and (vi) deliver such customary documents and
certificates as may be reasonably requested by any such Holders and the
Managing Underwriters, if any, including those to evidence compliance with
Section 3(i) and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Trust and the Guarantor. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this
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Section 3(p) shall be performed at each closing under any underwritten
offering to the extent required thereunder.
(q) The Trust and the Guarantor will use its reasonable best efforts to
cause the Common Stock relating to such Shelf Registration Statement to be
listed on each securities exchange, if any, on which any shares of Common
Stock are then listed.
(r) In the event that any broker-dealer registered under the Exchange
Act and selected or approved in accordance with the provisions set forth in
Section 6 hereof shall, underwrite any Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Rules of Fair Practice and the By-Laws of the
National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as
a Holder of such Securities or as an underwriter, a placement or sales agent
or a broker or dealer in respect thereof, or otherwise,the Guarantor and the
Trust shall take reasonable steps to (subject to Section 2(d) and 3(p)) assist
such broker-dealer in complying with the requirements of such Rules and
By-Laws, including, without limitation, by (A) if such Rules or By-Laws,
including Schedule E thereto, shall so require, engaging (at the expense of
the Holders) a "qualified independent underwriter" (as defined in such
Schedule) selected or approved by the Trust and the Guarantor to participate
in the preparation of the Shelf Registration Statement relating to such
Securities and to exercise usual standards of due diligence in respect
thereto, (B) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof and
(C) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules of
Fair Practice of the NASD.
(s) The Trust and the Guarantor shall use their reasonable best efforts
to comply with all applicable rules and regulation of the Commission.
4. Registration Expenses. Except as otherwise provided in Section 6, the
Guarantor shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Holders for the reasonable fees and disbursements of one firm of
counsel designated by the Guarantor and reasonably acceptable to the
Purchasers to act as counsel for the Holders in connection therewith; provided,
however that the Trust and the Guarantor shall not be responsible for any fees
and expenses of any underwriter (including any discounts, commissions or legal
fees and expenses) other than the reasonable fees and expenses of counsel in
connection with state blue sky qualifications of the Registrable Securities.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Trust and the Guarantor, jointly and severally,
agree to indemnify and hold harmless each Purchaser and each Holder of
Securities covered thereby (including the Purchasers), each director, officer,
employee and agent of the Purchasers and each person who controls any
Purchaser or any such Holder within the meaning of either the Securities Act
or the Exchange Act against any losses, claims, damages or liabilities, joint
or several, to which such Purchaser or Holder may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Shelf Registration Statement as originally filed or in
any amendment thereof, or in any preliminary Prospectus or Prospectus or any
Exchange Act filing incorporated therein, or in any amendment thereof or
supplement thereto, or arise
9
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and agrees to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that (i) the Guarantor
and the Trust will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in, or omission or alleged omission from,
any of such documents in reliance upon and in conformity with written
information furnished to the Guarantor by any Purchaser through CSFBC or any
such Holder specifically for use therein and (ii) the foregoing indemnity with
respect to any untrue statement or alleged untrue statement contained in, or
omission or alleged omission from, any preliminary prospectus relating to a
Shelf Registration Statement shall not inure to the benefit of any Holder (or
any person controlling such Holder) from whom the person asserting any such
loss, claim, damage or liability purchases any of the Securities that are the
subject thereof if such person did not receive a copy of the final prospectus
(or the final prospectus as supplemented) at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement or alleged untrue statement or omission or alleged omission
contained in the preliminary prospectus was corrected in the final prospectus
(or the final prospectus as supplemented) and the corrected prospectus was
made available to such Holder prior to the time of such sale. This indemnity
agreement will be in addition to any liability which the Guarantor or the
Trust may otherwise have.
The Trust and the Guarantor, jointly and severally, also agree to
indemnify or contribute to Losses (as defined below) of, as provided in
Section 5(d), any underwriters of Securities registered under the Shelf
Registration Statement, their officers, directors, employees and agents and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Purchasers and the selling Holders provided
in this Section 5(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(o)
and Section 6 hereof.
(a) As a condition to the inclusion of a Holder's Registrable Securities
in a Shelf Registration Statement, such Holder shall agree to indemnify and
hold harmless (i) the Trust and the Guarantor, (ii) each of the directors of
the Guarantor, (iii) each of its officers who signs such Shelf Registration
Statement and (iv) each person who controls the Trust or the Guarantor within
the meaning of either the Securities Act or the Exchange Act to the same extent
as the foregoing indemnity from the Trust and the Guarantor, but only with
reference to written information relating to such Holder furnished to the
Guarantor by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(b) Promptly after receipt by an indemnified party under Section 5(a) or
(b) of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability it may have to any indemnified party otherwise than
under Section 5(a) or (b), except to the extent that it has been materially
prejudiced by such failure; and provided that such omission will not relieve
it from any liabilities which it may otherwise have to an indemnified party.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the
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commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 5 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified party
shall have the right to appoint counsel to represent the indemnified party and
their respective controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the indemnified
party against the indemnifying party under this Section 5 if the employment of
such counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action, or if, in the written opinion of
counsel to either the indemnifying party or the indemnified party,
representation of both parties by the same counsel would be inappropriate due to
actual or likely conflicts of interest between them, and in that event the fees
and expenses of one firm of separate counsel (in addition to the fees and
expenses of local counsel) shall be paid by the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld, effect any settlement
of any pending or threatened action in respect of which any indemnified 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 any claims that are the subject
matter of such action. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld.
(c) In the event that the indemnity provided in Section 5(a) or (b) is
unavailable to or insufficient to hold harmless an indemnified party for any
reason, then each indemnifying party shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which such indemnified party may be subject in such proportion as
is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from
the Initial Placement and the Shelf Registration Statement which resulted in
such Losses; provided, however, that in no case shall the Purchasers or any
subsequent Holder of any Security be responsible, in the aggregate, for any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the Shelf Registration
Statement exceeds the amount of damages which such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Relative fault
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 indemnifying
party, on the one hand, or by the indemnified party, on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The parties agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 5(d), no
11
person guilty of fraudulent misrepresentation (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 misrepresentation. For purposes of this
Section 5, each person who controls a Holder within the meaning of either the
Securities Act or the Exchange Act shall have the same rights to contribution as
such Holder, and each person who controls the Guarantor or the Trust within the
meaning of either the Securities Act or the Exchange Act, each officer of the
Guarantor who shall have signed the Shelf Registration Statement and each
director of the Guarantor shall have the same rights to contribution as the
Guarantor, subject in each case to the applicable terms and conditions of this
Section 5(d).
(d) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Guarantor or the Trust or any of the officers, directors, employees,
agents or controlling persons referred to in Section 5 hereof, and will
survive the sale by a Holder of Securities covered by the Shelf Registration
Statement.
6. Underwritten Offering. The Holders of Registrable Securities covered
by the Shelf Registration Statement who desire to do so may sell such
Registrable Securities in an underwritten offering in accordance with the
conditions set forth below and subject to Section 2(d) and 3(p). In any such
underwritten offering, (a) the investment banker or bankers and manager or
managers that will administer the offering will be selected or approved by the
Guarantor and the Trust, and (b) the underwriting arrangements with respect
thereto will be approved by the Holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such
underwriting arrangements must be reasonably acceptable to the Guarantor and
the Trust. No Holder may participate in any underwritten offering contemplated
hereby unless (a) such Holder agrees to sell such Holder's Registrable
Securities in accordance with such approved underwriting arrangements, (b)
such Holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) at least 25% of the outstanding Registrable Securities held by all
Holders are included in such underwritten offering. The Holders participating
in any underwritten offering shall be responsible for any expenses customarily
borne by selling securityholders, including underwriting discounts and
commissions and fees and expenses of counsel to the selling securityholders
and shall reimburse the Trust and the Guarantor for the fees and disbursements
of their counsel, their independent public accountants and any printing
expenses incurred in connection with such underwritten offering.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Trust and the Guarantor have
not, as of the date hereof, entered into, and shall not, on or after the
date hereof, enter into, any agreement with respect to their securities or
otherwise that conflicts with the rights granted to the Holders herein or the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Trust and the Guarantor have obtained the written
consent of the Purchasers.
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(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Guarantor in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each Holder,
the address of such Holder set forth in the books and records of the
Trust or the registrar and transfer agent for the Securities;
(2) if to the Purchasers, initially at the address set forth in the
Purchase Agreement; and
(3) if to the Trust or the Guarantor, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchaser or the Trust and the Guarantor by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent
by the Trust or the Guarantor thereto, subsequent Holders of Securities. The
Trust and the Guarantor hereby agree to extend the benefits of this Agreement
to any Holder of Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) 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.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) 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.
(h) Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired or
affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
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If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Trust and the
Guarantor and the several Purchasers in accordance with its terms.
Very truly yours,
CALENERGY CAPITAL TRUST
By Gregory Abel, solely in his capacity
as trustee and not in his individual
capacity,
/s/ Gregory Abel
---------------------------------------
Gregory Abel
By Steven A. McArthur, solely in his
capacity as trustee and not in his indi-
vidual capacity,
/s/ Steven A. McArthur
---------------------------------------
Steven A. McArthur
The foregoing Registration
Rights Agreement is hereby
confirmed and accepted as of CALENERGY COMPANY, INC.
the date first above written.
CS FIRST BOSTON CORPORATION By /s/ Steven A. McArthur
-----------------------------------
Name: Steven A. McArthur
Title: Senior Vice President
By /s/ Jonathon D. Brown
-----------------------------
Name: Jonathon D. Brown
Title: Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Richard A. Vaccari
-----------------------------
Name: Richard A. Vaccari
Title: Managing Director