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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): May 26, 1998
CALPINE CORPORATION
(A Delaware Corporation)
Commission File Number: 033-73160
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
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ITEM 5. OTHER EVENTS
On May 26, 1998, Calpine Corporation ("Calpine"), a Delaware corporation,
announced it had signed a 20-year contract to provide electricity to the Magic
Valley Electric Cooperative, Inc. of Mercedes, Texas beginning in 2001. The
power will be supplied by Calpine's Magic Valley Generating Station, a 700
megawatt natural gas-fired power plant under development in Edinburg, TX. Magic
Valley, a 51,000 member non-profit electric cooperative, initially will purchase
from 250 to 400 megawatts of capacity, with an option to purchase additional
capacity. The electric cooperative will be the "anchor tenant" for Calpine's new
Magic Valley plant. Calpine is marketing additional capacity to other wholesale
customers, initially targeting south Texas. Permitting for the Magic Valley
plant is underway, with construction expected to begin in late 1999.
In conjunction with the Magic Valley plant, Calpine entered into an agreement
with the City of Edinburg to purchase water from the City's waste-water treatm-
ent plant for use at the power plant.
Calpine has also entered into agreements with Houston, TX-based CCNG, Inc., an
oil and gas exploration, development and marketing company, to provide fuel
management services for the Magic Valley plant. In addition, both companies will
jointly pursue a variety of other natural gas opportunities in the Texas market.
As part of this new fuels venture, Calpine has granted CCNG Investments, L.P.
("CCNG"), options to purchase 1.1 million shares of Calpine Common Stock ("Stock
Purchase Agreement"). Under the terms of the Stock Purchase Agreement, CCNG has
the one-time right prior to September 28, 1998, to elect to purchase from
Calpine up to 1.0 million shares of Calpine's common stock, $0.001 par value.
The per share purchase price will be determined by the average of the closing
prices of Calpine's common stock for the ten trading days immediately preceding
the receipt of written notice. Additionally, prior to December 31, 1998, CCNG
has the one-time right to purchase from Calpine additional shares of common
stock at a price of $17-7/8 per share. The additional shares may be purchased in
an amount equal to the greater of (i) 50,000 shares of common stock or (ii) up
to ten percent of that number of shares of common stock purchased by CCNG
pursuant to the initial option for 1.0 million shares.
ITEM 7. EXHIBITS
10.8.5 Stock Purchase Agreement dated May 1, 1998 and between Calpine
Corporation and CCNG Investments, L.P.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
By: /s/ Ann. B. Curtis
------------------------------------
Ann B. Curtis
Senior Vice President and
Chief Financial Officer
June 9, 1998
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EXHIBIT 10.8.5
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock............................................1
1.1 Sale and Issuance of Common Stock............................1
1.2 Closing......................................................1
2. Representations and Warranties of the Company.........................2
2.1 Organization, Good Standing and Qualification................2
2.2 Capitalization and Voting Rights.............................2
2.3 Authorization................................................2
2.4 Valid Issuance of Common Stock...............................2
2.5 Offering.....................................................3
2.6 Changes......................................................3
3. Representations and Warranties of the Investor........................3
3.1 Authorization................................................3
3.2 Purchase Entirely for Own Account............................3
3.3 Disclosure of Information....................................3
3.4 Investment Experience........................................4
3.5 Accredited Investor..........................................4
3.6 Restricted Securities........................................4
3.7 Further Limitations on Disposition...........................4
3.8 Legends......................................................4
4. California Commissioner of Corporations...............................5
4.1 Corporate Securities Law.....................................5
5. Conditions of Investor's Obligations at Each Closing..................5
5.1 Representations and Warranties...............................5
5.2 Proceedings and Documents....................................5
5.3 Qualifications...............................................5
6. Conditions of the Company's Obligations at Closing....................6
6.1 Representations and Warranties...............................6
6.2 Payment of Purchase Price....................................6
6.3 Qualifications...............................................6
7. Board of Directors....................................................7
8. Form S-3 Registration Rights..........................................6
8.1 Definitions..................................................6
8.2 Registration Rights..........................................6
8.3 Obligations of the Company...................................7
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8.4 Furnish Information..........................................8
8.5 Indemnification..............................................8
8.6 Reports Under Securities & Exchange Act of 1934.............10
8.7 Termination of Registration Rights..........................11
9. Restrictions on Sale of Common Stock.................................11
9.1 Public Offerings............................................11
10. Miscellaneous........................................................11
10.1 Survival of Warranties......................................11
10.2 Successors and Assigns......................................11
10.3 Governing Law...............................................11
10.4 Counterparts................................................11
10.5 Titles and Subtitles........................................12
10.6 Notices.....................................................12
10.7 Amendments and Waivers......................................12
10.8 Severability................................................12
10.9 Entire Agreement............................................12
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the first day of May, 1998, by and
between Calpine Corporation, a Delaware corporation (the "Company"), and CCNG,
Investments, L.P., a Texas limited partnership (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement:
(a) at any time prior to September 28, 1998, the Investor
shall have the one-time right to elect to purchase from the Company, and the
Company agrees to sell and issue to the Investor, at the Initial Closing (as
defined below) pursuant to Section 1.2, up to One Million (1,000,000) shares of
the Company's Common Stock, $0.001 par value ("Common Stock"), at a price per
share equal to the average of the closing prices of such Common Stock for the
ten (10) trading days immediately preceding the Initial Closing; and
(b) at any time prior to December 31, 1998, the Investor
shall have the one-time right to elect to purchase, and the Company agrees to
sell and issue to the Investor, at any Subsequent Closing (as defined below)
pursuant to Section 1.2, additional shares of the Company's Common Stock at a
price of $17-7/8 per share in an amount equal to the greater of (i) 50,000
shares of Common Stock or (ii) up to ten percent (10%) of that number of shares
of Common Stock purchased by the Investor at the Initial Closing pursuant to
Section 1.1(a).
(c) The number of shares purchasable under Section 1.1(a)
and Section 1.1(b) and the price payable under Section 1.1(b) hereof shall be
appropriately adjusted for any stock splits, combinations, reclassifications or
similar events.
1.2 Closing. The purchase and sale of the Common Stock pursuant
to Section 1.1(a) shall take place at the offices of the Company, 50 West San
Fernando Street, San Jose, California 95113, at 9:00 A.M. on the tenth (10th)
business day following the Company's receipt of written notice from the Investor
to the Company that the Investor elects to purchase a stated number of shares of
Common Stock pursuant to Section 1.1(a) hereof, or at such other time and place
as the Company and the Investor mutually agree upon (which time and place are
designated as the "Initial Closing"). The purchase and sale of the Common Stock
pursuant to Section 1.1(b) shall take place at such offices of the Company at
9:00 A.M. on the tenth (10th) business day following the Company's receipt of
written notice from the Investor to the Company that the Investor elects to
purchase a stated number of shares of Common Stock pursuant to Section 1.1(b)
hereof, or at such other time or place as the Company and the Investor mutually
agree upon (which time and place are designated the "Subsequent Closing"). The
Initial Closing
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and the Subsequent Closing are each referred to as a "Closing." At each Closing,
the Company shall deliver to the Investor a certificate representing the shares
of Common Stock that the Investor is purchasing against payment of the purchase
price therefor to the Company by certified or cashiers' check or wire transfer
of immediately available funds.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor as follows:
2.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
business or properties.
2.2 Capitalization and Voting Rights. The authorized capital of
the Company consists of:
(i) Preferred Stock. 10,000,000 shares of Preferred Stock
(the "Preferred Stock"), of which no shares are outstanding.
(ii) Common Stock. 100,000,000 shares of common stock
("Common Stock"), of which 20,104,890 shares were issued and outstanding as of
March 4, 1998.
(iii) The outstanding shares of Common Stock are all duly
and validly authorized and issued, fully paid and nonassessable, and were issued
in accordance with the registration or qualification provisions of the
Securities Act of 1933, as amended (the "Securities Act"), and any relevant
state securities laws or pursuant to valid exemptions therefrom.
2.3 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and thereunder, and the authorization,
issuance, sale and delivery of the Common Stock being sold hereunder has been
taken or will be taken prior to the Closing, and this Agreement constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
2.4 Valid Issuance of Common Stock. The Common Stock that is
being purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and under applicable state and federal securities laws.
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2.5 Offering. Subject in part to the truth and accuracy of the
Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Common Stock as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act and the
securities laws of the State of California, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.6 Changes. Since the date of the Company's last Annual Report
on Form 10-K for the period ending December 31, 1997 filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), there has not been any
change in the business, affairs, assets, liabilities, financial condition or
operating results of the Company that have been, in the aggregate, materially
adverse to the Company and its subsidiaries, taken as a whole.
3. Representations and Warranties of the Investor. The Investor
hereby represents and warrants that:
3.1 Authorization. The Investor has full power and authority to
enter into this Agreement, and such agreement constitutes a valid and legally
binding obligation, enforceable in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
3.2 Purchase Entirely for Own. This Agreement is made with the
Investor in reliance upon the Investor's representation to the Company, which by
the Investor's execution of this Agreement the Investor hereby confirms, that
the Common Stock to be received by the Investor (the "Securities") will be
acquired for investment for the Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Investor further represents that the Investor does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities.
3.3 Disclosure of Information. The Investor acknowledges that it
has received all the information the Investor considers necessary or appropriate
for deciding whether to purchase the Securities. The Investor further represents
that the Investor has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Securities and the business, properties, prospects and financial condition of
the Company.
3.4 Investment Experience. The Investor can bear the economic
risk of its investment and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Securities.
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3.5 Accredited Investor. The Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
3.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
the Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the Investor further agrees not to
make any disposition of all or any portion of the Securities unless and until
either:
(a) there is then in effect a Registration Statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement and all applicable laws and
regulations under the Securities Act and otherwise; or
(b) (i) the Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, the Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the
Securities Act, and (iii) other than with respect to Securities sold in the
public market pursuant to SEC Rule 144, the transferee has agreed in writing for
the benefit of the Company to be bound by all provisions of this Agreement,
including without limitation, this Section 3 and to the extent this Section and
such agreement are then applicable.
3.8 Legends.
(a) It is understood that the certificate evidencing the
Securities may bear one or all of the following legends:
(i) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(ii) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations and Sections 417 and 418 of
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the California Corporations Code.
(b) No legend under Section 3.8(a)(i) shall be required
after the Securities are freely tradable without limitation under Rule 144 of
the Securities Act of 1933, as amended.
4. California Commissioner of Corporations.
4.1 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. Conditions of Investor's Obligations at Each Closing. The
obligations of the Investor under Section 1.1(a) of this Agreement are subject
to the fulfillment on or before each Closing of each of the following
conditions:
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of each
Closing with the same effect as though such representations and warranties had
been made on and as of such Closing.
5.2 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investor's counsel, and the Investor shall have received all such
counterpart original and certified or other copies of such documents as the
Investor may reasonably request.
5.3 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6. Conditions of the Company's Obligations at Closing. The
obligations of the Company to the Investor under this Agreement are subject to
the fulfillment on or before each Closing of each of the following conditions by
the Investor:
6.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of
each Closing with the same effect as
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though such representations and warranties had been made on and
as of such Closing.
6.2 Payment of Purchase Price. The Investor shall have delivered
the purchase price as specified in Sections 1.1 and 1.2 of this Agreement, as
applicable.
6.3 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
7. Board of Directors. In the event that the Investor purchases
the entire amount of shares of Common Stock that the Investor is entitled to
purchase under Section 1.1(a) hereof, then upon receipt of a written request
from the Investor, the Company shall take all necessary action to appoint Daniel
B. Porter as a director on the Company's Board of Directors promptly following
the Closing at which such shares are purchased. In such event, Mr. Porter shall
serve as a director at the discretion of the Company's stockholders and Board of
Directors and subject to all applicable laws and regulations and the provisions
of the Company's Certificate of Incorporation and Bylaws. Nothing in this
agreement, or otherwise, grants or shall be construed to grant Mr. Porter any
contractual rights to maintain such position on the Board of Directors.
8. Form S-3 Registration Rights.
8.1 Definitions.
(a) The term "Form S-3" refers to a Registration Statement
on Form S-3 under the Securities Act as such form is in effect on the date
hereof or any similar registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(b) The term "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
8.2 Registration Rights. In case the Company shall receive a
written request from the Investor that the Company effect a registration on
pursuant to this Section 8 and any related qualification or compliance with
respect to all or a part of the Securities owned by the Investor, the Company
will:
(a) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of the Investor's
Securities as are specified in such request;
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provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 8.2(a): (i)
if Form S-3 is not available for such offering by the Investor; (ii) if the
Investor proposes to sell Securities at an aggregate price to the public (net of
any underwriters' discounts or commissions) of less than $1,000,000; (iii) on
more than two occasions; (iv) if the Company shall furnish to the Investor a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Company, it would be seriously detrimental to the Company
for such registration to be effected at such time, in which event the Company
shall have the right to defer the filing of the Form S-3 registration statement
for a period of not more than ninety (90) days after receipt of the request of
the Investor under this Section 8.2; provided, however, that the Company shall
not utilize this right more than twice in any one year; or (v) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.
(b) subject to the foregoing, the Company shall file a Form
S-3 registration statement covering the Securities as soon as practicable after
receipt of the request of the Investor. All expenses incurred by the Company in
connection with a registration requested pursuant to this Section 8, including
(without limitation) all registration, filing, qualification, printer's and
accounting fees and the fees of counsel for the Company, but excluding any
underwriters' discounts or commissions associated with Securities, shall be
borne by the Company.
8.3 Obligations of the Company. Whenever required under this
Section 8 to effect the registration of any Securities, the Company shall, as
expeditiously as reasonably possible:
(a) prepare and file with the SEC a Form S-3 registration
statement with respect to such Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
Investor, keep such registration statement effective for a period of up to one
hundred eighty (180) days.
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Investor may
reasonably request in order to facilitate the disposition of Securities
registered.
(d) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investor; provided, however, that the Company shall not be
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required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions except as may be required by the Securities Act.
(e) notify the Investor of Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act due to the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(f) cause all such Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.
(g) provide a transfer agent and registrar for all
Securities registered pursuant hereunder and a CUSIP number for all such
Securities, in each case not later than the effective date of such registration.
8.4 Furnish Information. Furnish Information. It shall be a
condition precedent to the obligations of the Company to take any action
pursuant to this Section 8 with respect to the Securities to be registered that
the Investor shall furnish to the Company such information regarding itself, the
Securities held by it, and the intended method of disposition of such Securities
as shall be required to effect the registration of such Securities.
8.5 Indemnification. In the event any Securities are included in
a registration statement under this Section 8:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless the Investor, and each person, if any, who controls
the Investor within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to the Investor, or controlling person, as incurred, any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this subsection shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim,
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damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
the Investor or controlling person.
(b) To the extent permitted by law, the Investor will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, and each person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject under the Securities Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with information furnished
by the Investor for use in connection with such registration; and the Investor
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection, in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Investor, which consent shall not be unreasonably withheld;
provided, further, however, that, in no event shall any indemnity under this
subsection exceed the gross proceeds from the offering received by the Investor.
(c) Promptly after receipt by an indemnified party under
this Section 8.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 8.5, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
8.5, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 8.5.
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(d) If the indemnification provided for in this Section 8.5
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Company and Investor under this
Section 8.5 shall survive the completion of any offering of Securities in a
registration statement under this Agreement and otherwise.
8.6 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Investor the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit the Investor to sell securities of the Company to the public without
registration or pursuant to a registration statement on Form S-3, the Company
agrees to:
(a) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) Furnish to the Investor, so long as the Investor owns
any Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested in availing the Investor of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
8.7 Termination of Registration Rights.
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(a) The Investor shall not be entitled to exercise any right
provided for in this Section 8 after two (2) years following the execution of
this Agreement.
(b) In addition, the right of the Investor to request
registration or inclusion in any registration pursuant to this Section 8 shall
terminate if all Securities purchased by the Investor hereunder may immediately
be sold under Rule 144(k) under the Securities Act.
9. Restrictions on Sale of Common Stock.
9.1 Public Offerings. In the event that the Company undertakes or
makes a public offering of shares of its Common Stock or any other equity
securities subject to regulation under the Securities Act, upon the request of
the underwriters underwriting such public offering, the Investor shall enter
into a "lock up" agreement reasonably satisfactory in form and substance to such
underwriters (and substantially similar to any such "lock up" agreements
executed by the Company's most senior officers), pursuant to which the Investor
will agree not to sell Common Stock which it owns for a period from and after
the date of such public offering not to exceed the lesser of (i) the period of
such prohibition applicable to the Company's most senior officers or (ii) one
hundred eighty (180) days; provided, however, that this Section 9.1 shall apply
only if the Investor owns 500,000 shares of Common Stock or more (as adjusted
for stock splits, combinations, reclassifications or similar events).
10. Miscellaneous.
10.1 Survival of Warranties. The warranties, representations and
covenants of the Company and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and each
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investor or the Company.
10.2 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors of the parties. This Agreement shall not
be assignable by either the Company or the Investor under any condition or
circumstance. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
10.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California.
10.4 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but together shall
constitute one and the same instrument.
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10.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
10.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
10.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Investor. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon the
Investor at the time outstanding, each future holder of all such securities, and
the Company.
10.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
10.9 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto relating to the subject matter hereof, and no
such party shall be liable or bound to any other such party in any manner as a
result of any warranties, representations, or covenants, except as specifically
set forth herein.
(Remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CALPINE CORPORATION
By: /s/ Peter Cartwright
-----------------------------------
Peter Cartwright
Chairman, President and
Chief Executive Officer
Address: 50 West San Fernando Street
San Jose, CA 95113
INVESTOR:
CCNG, INVESTMENTS, L.P.
By: CCNG, INC., a Texas corporation and
the General Partner of CCNG INVESTMENTS, L.P.
By: /s/ Daniel B. Porter
-----------------------------------
Daniel B. Porter
President
Address: 3700 Buffalo Speedway, Suite 1100
Houston, Texas 77098-3705
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