Exhibit 10.2

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

dated as of

July 1, 2020

between

PG&E Corporation

and

the PG&E Fire Victim Trust

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

 

Definitions

 

SECTION 1.01.

 

Certain Defined Terms

     2  

SECTION 1.02.

 

Terms Generally

     6  

ARTICLE II

 

Registration Rights

 

SECTION 2.01.

 

Shelf Registration

     7  

SECTION 2.02.

 

Piggyback Offerings

     11  

SECTION 2.03.

 

Holdback

     13  

SECTION 2.04.

 

Registration Procedures

     14  

SECTION 2.05.

 

Free Writing Prospectuses

     18  

SECTION 2.06.

 

Suspension of Dispositions

     19  

SECTION 2.07.

 

Registration Expenses

     19  

SECTION 2.08.

 

Indemnification

     19  

SECTION 2.09.

 

Transfer of Registration Rights

     22  

ARTICLE III

 

Periodic Reporting and Rule 144

 

SECTION 3.01.

 

Periodic Reporting

     23  

SECTION 3.02.

 

Rule 144 Block Trades

     23  

ARTICLE IV

 

Mirror Voting

 

SECTION 4.01.

 

Mirror Voting

     23  

ARTICLE V

 

Termination

 

SECTION 5.01.

 

Termination

     24  

 

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ARTICLE VI

 

Miscellaneous

 

SECTION 6.01.

 

Notices

     24  

SECTION 6.02.

 

Authority

     26  

SECTION 6.03.

 

No Third Party Beneficiaries

     26  

SECTION 6.04.

 

Governing Law; Forum Selection

     26  

SECTION 6.05.

 

WAIVER OF JURY TRIAL

     26  

SECTION 6.06.

 

Successors and Assigns

     26  

SECTION 6.07.

 

Entire Agreement

     26  

SECTION 6.08.

 

Severability

     27  

SECTION 6.09.

 

Amendment

     27  

SECTION 6.10.

 

Headings

     27  

SECTION 6.11.

 

Counterparts; Facsimiles

     27  

SECTION 6.12.

 

Time Periods

     27  

ANNEX A: Plan of Distribution

 

 

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REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (as amended, supplemented or otherwise
modified from time to time, this “Agreement”) is entered into as of July 1,
2020, between PG&E Corporation, a California corporation (the “Corporation”),
and the Trustee (as defined herein), solely in its capacity as trustee of the
PG&E Fire Victim Trust, a statutory trust created under the Delaware Statutory
Trust Act (including any of its Subsidiaries who may become a party hereto, the
“Trust”) established in connection with the Plan of Reorganization (as defined
herein). Capitalized terms used but not otherwise defined herein have the
meanings ascribed to such terms in the Plan of Reorganization.

WHEREAS, on January 29, 2019, the Corporation and its subsidiary, Pacific Gas
and Electric Company, a California corporation (collectively, the “Debtors”),
commenced voluntary cases under chapter 11 of title 11 of the United States Code
in the United States Bankruptcy Court for the Northern District of California
(the “Bankruptcy Court”);

WHEREAS, on December 6, 2019, the Debtors entered into a Restructuring Support
Agreement, as amended on December 16, 2019 (as amended, supplemented or
otherwise modified from time to time, the “RSA”), with the Tort Claimants
Committee, the Consenting Fire Claimant Professionals and the Shareholder
Proponents, pursuant to which each party thereto agreed, upon the terms and
subject to the conditions set forth therein, to support the Debtors’ amended
plan of reorganization identified therein;

WHEREAS, on December 12, 2019, the Debtors and the Shareholder Proponents filed
the Debtors’ and Shareholder Proponents’ Joint Chapter 11 Plan of Reorganization
(as amended on January 31, 2020, March 9, 2020, March 16, 2020, May 22, 2020 and
June 19, 2020, and as may be further amended, supplemented or otherwise modified
from time to time, the “Plan of Reorganization”);

WHEREAS, upon the effective date of the Plan of Reorganization (the “Effective
Date”) and pursuant to the Plan of Reorganization, the Corporation will issue to
the Trust, upon the terms and subject to the conditions set forth in the RSA and
the Plan of Reorganization, 476,995,175 shares of the Corporation’s common
stock, no par value (the “Common Stock” and such shares, together with any other
shares of Common Stock issued to the Fire Victim Trust pursuant to the Plan of
Reorganization, the “Trust Shares”); and

WHEREAS, the Corporation has agreed to provide the Trust with registration
rights with respect to the Registrable Securities (as defined herein), upon the
terms and subject to the conditions set forth herein.

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NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained in this Agreement, the parties hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms have the following meanings set forth below or in the sections set forth
below:

“Adverse Disclosure” means public disclosure of material non-public information
that, as determined in good faith by the Board or an Executive Officer,
(a) would not be required to be made at such time but for filing or maintaining
in effect a registration statement as contemplated by this Agreement and
(b) would not be in the Corporation’s best interests.

“Adverse Effect” shall have the meaning set forth in Section 2.01(e).

“Advice” shall have the meaning set forth in Section 2.06.

“Agreement” shall have the meaning set forth in the preamble.

“Backstop Approval Order” means the Order (I) Approving Terms of, and Debtors’
Entry Into and Performance Under, Equity Backstop Commitment Letters and
(II) Authorizing Incurrence, Payment and Allowance of Related Premiums and
Expenses As Administrative Expense Claims, signed and filed on March 16, 2020.

“Backstop Commitment Letters” means those certain Amended and Restated Chapter
11 Plan Backstop Commitment Letters (as amended, supplemented or otherwise
modified from time to time prior to the date of this Agreement in accordance
with the terms thereof and the Backstop Approval Order and as may be otherwise
permitted under the Plan of Reorganization and the RSA) entered into with the
investors party thereto, pursuant to which the Backstop Parties have separately
committed to purchase, and will receive as consideration thereunder, shares of
Common Stock, on the terms and subject to the conditions of the Backstop
Commitment Letters and the Backstop Approval Order.

“Backstop Commitments” means “Aggregate Backstop Commitments” as defined in the
Backstop Commitment Letters.

“Backstop Parties” means, collectively, each “Backstop Party” as defined in each
Backstop Commitment Letter.

“Backstop RRAs” shall have the meaning set forth in Section 2.01(h)(ii).

“Bankruptcy Court” shall have the meaning set forth in the recitals.

“Board” means the Board of Directors of the Corporation, or any authorized
committee thereof.

“Business Day” means any day other than a Saturday, Sunday or other day on which
banks in the State of New York are authorized by law to remain closed.

 

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“Common Stock” shall have the meaning set forth in the recitals.

“Control” means the direct or indirect power to direct or cause the direction of
management or policies of a Person, whether through the ownership of voting
securities, general partnership interests or management member interests, by
contract or trust agreement, pursuant to a voting trust or otherwise.
“Controlling” and “Controlled” have the correlative meanings.

“Corporation” shall have the meaning set forth in the preamble.

“Debtors” shall have the meaning set forth in the recitals.

“Effective Date” shall have the meaning set forth in the recitals.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.

“Excluded Registration” means a registration under the Securities Act of
(a) Common Stock pursuant to the Shelf Registration in accordance with
Article II, (b) Common Stock registered on Form S-4 or S-8 or any similar
successor forms, (c) securities convertible into or exercisable or exchangeable
for Common Stock and (d) Common Stock registered on Form S-3 or any successor
form covering securities issued under a dividend reinvestment program and/or an
“at the market” program.

“Executive Officer” means the Chief Executive Officer, the Chief Financial
Officer, the General Counsel or the Executive Vice President, Law, Strategy and
Policy, in each case of the Corporation.

“FINRA” shall have the meaning set forth in Section 2.04(a)(xii).

“Governmental Authority” means any United States or non-United States federal,
provincial, state or local government or other political subdivision thereof,
any entity, authority, agency or body exercising executive, legislative,
judicial, regulatory or administrative functions of any such government or
political subdivision and any supranational organization of sovereign states
exercising such functions for such sovereign states.

“Indemnitee” shall have the meaning set forth in Section 2.08(a).

“Indemnitor” shall have the meaning set forth in Section 2.08(c)(i).

“Initial Sale Time” shall have the meaning set forth in Section 2.08(a).

“Inspectors” shall have the meaning set forth in Section 2.04(a)(viii).

“Issuer Free Writing Prospectus” shall have the meaning set forth in
Section 2.05.

“Lockup Period” shall have the meaning set forth in Section 2.01(c)(i).

“Losses” shall have the meaning set forth in Section 2.08(a).

 

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“Market Value” means (a) for so long as the Common Stock is listed for trading
on a nationally recognized exchange or market, the average per share closing
price of the Common Stock as reported on the principal exchange or market on
which the Common Stock is then traded over the ten consecutive Trading Days
immediately preceding the date of the Transfer Notice or (b) if not so listed,
the estimated market value determined in good faith by the Board based upon the
advice of a nationally recognized investment banking firm retained by the
Corporation (at the sole expense of the Corporation) for this purpose (which
investment banking firm shall be reasonably acceptable to the Trust).

“Marketed Offering” means a “Permitted Equity Offering” (as defined in the
Backstop Commitment Letters) that is a rights offering or an underwritten
primary offering of equity securities, equity forward purchase contracts and/or
other equity-linked instruments involving a customary “road show” or other
substantial marketing effort by or on behalf of the Corporation; provided that,
in the event the Corporation, solely as a result of drawing on the Backstop
Commitments, issues to the Backstop Parties pursuant to the Backstop Commitment
Letters an aggregate number of shares of Common Stock equal to or greater than
20% of the aggregate number of shares of Common Stock issued on the Effective
Date (or deemed to be issued as of the Effective Date based on the minimum
conversion rate, in the case of any equity forward purchase contracts or other
equity-linked instruments) in furtherance of the Plan of Reorganization (not
including the shares of Common Stock to be issued to the Trust), the Corporation
shall be deemed not to have executed a Marketed Offering for purposes of this
Agreement.

“mirror voting” shall have the meaning set forth in Section 4.01.

“Non-Transferable Rights” shall have the meaning set forth in Section 2.09.

“Non-Underwritten Sale” shall have the meaning set forth in Section 2.01(c)(i).

“Other Stockholders” means any Person (other than the Trust) who has a right to
participate as a seller in any underwritten offering of Common Stock by the
Corporation (whether for the account of the Corporation, the Trust or otherwise)
pursuant to a registration rights agreement or other similar arrangements (other
than this Agreement) with the Corporation.

“Permitted Transferee” shall have the meaning set forth in Section 2.09.

“Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization, joint venture, limited liability company,
Governmental Authority or other entity.

“Piggyback Notice” shall have the meaning set forth in Section 2.02(a).

“Piggyback Offering” shall have the meaning set forth in Section 2.02(a).

“Plan of Reorganization” shall have the meaning set forth in the recitals.

“Re-Activation Notice” shall have the meaning set forth in Section 2.01(f).

 

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“Records” shall have the meaning set forth in Section 2.04(a)(viii).

“register”, “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness (or automatic
effectiveness) of such registration statement.

“Registrable Securities” means (a) the Trust Shares and (b) any equity security
issued in exchange for or with respect to any Trust Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or similar
transaction, or otherwise. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities on the earliest of the date
on which such securities: (i) have been registered under the Securities Act and
disposed of in accordance with an effective registration statement; (ii) have
been sold pursuant to Rule 144; (iii) together with all other Registrable
Securities held by the Trust, represent less than 4% of the outstanding shares
of Common Stock and all such Registrable Securities may be sold in a single day
without notice or manner of sale restrictions pursuant to, and in accordance
with, Rule 144; (iv) cease to be outstanding (whether as a result of exercise,
redemption, repurchase, conversion or otherwise); or (v) are transferred to any
third Person; provided, however, that in the case of this clause (v) any such
securities shall remain Registrable Securities if sold or transferred to a
Permitted Transferee until the date that all Registrable Securities held by such
Permitted Transferee may be sold in a single day without notice or manner of
sale restrictions and, if the Corporation has not complied with its periodic
reporting requirements under the Exchange Act, without current information,
pursuant to, and in accordance with, Rule 144 (giving effect, if applicable, to
“tacking” the holding period of the Trust), and upon such date such securities
shall cease to be Registrable Securities.

“Representatives” means, with respect to any Person, any of such Person’s
Controlling persons, trustees, officers, directors, managers, employees, agents,
attorneys, accountants, actuaries, consultants or advisors or any other Person
acting on behalf of such Person.

“RSA” shall have the meaning set forth in the recitals.

“Rule 144” means Rule 144 under the Securities Act (or any successor provision).

“Rule 144 Block Trade” means an offering and/or sale of Registrable Securities
made pursuant to Rule 144 on a block trade basis, including a same day trade,
overnight trade or similar transaction.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

“Shelf Registration” shall have the meaning set forth in Section 2.01(a)(i).

“Subsidiary” means, with respect to any Person, any direct or indirect wholly
owned subsidiary.

 

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“Suspension Notice” shall have the meaning set forth in Section 2.06.

“Trading Day” means a day during which (a) trading in securities generally
occurs on the principal United States national securities exchange on which the
Common Stock is then listed or admitted for trading or, if the Common Stock is
not then listed or admitted for trading on a United States national securities
exchange, on the principal other market on which the Common Stock is then
traded, and (b) a closing sale price for the Common Stock is available on such
securities exchange or market. If the Common Stock is not so listed or traded,
“Trading Day” means a Business Day.

“Transfer Notice” shall have the meaning set forth in Section 2.01(b).

“Trust” shall have the meaning set forth in the preamble.

“Trust Shares” shall have the meaning set forth in the recitals.

“Trustee” means the Hon. John K. Trotter (Ret.) and any successor thereto
appointed pursuant to the Fire Victim Trust Agreement.

“Underwritten Offering” means an offering and/or sale of Common Stock of the
Corporation made pursuant to the Shelf Registration on an underwritten or block
trade basis (whether firm commitment or otherwise).

“WKSI” means a “well known seasoned issuer” as defined in Rule 405 under the
Securities Act.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation,” unless the context
expressly provides otherwise. All references herein to Articles, Sections,
paragraphs, subparagraphs or clauses shall be deemed references to Articles,
Sections, paragraphs, subparagraphs or clauses of this Agreement, unless the
context requires otherwise. Unless otherwise specified, the words “this
Agreement,” “herein,” “hereof,” “hereto” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
provision of this Agreement. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase
shall not mean simply “if.” Unless expressly stated otherwise, any law defined
or referred to herein means such law as from time to time amended, modified or
supplemented, including by succession of comparable successor laws and
references to all attachments thereto and instruments incorporated therein.

 

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ARTICLE II

Registration Rights

SECTION 2.01. Shelf Registration. (a) (i) Subject to Section 2.01(f) and to the
extent not previously filed or effective, as soon following the Effective Date
as is permissible under applicable rules and regulations of the SEC, the
Corporation shall file with the SEC a registration statement (as may be amended,
supplemented or replaced from time to time, the “Shelf Registration”) (on Form
S-3 to the extent permissible) pursuant to applicable rules under the Securities
Act covering the resale of all Registrable Securities, and any other securities
desired by the Corporation for an offering to be made on a delayed or continuous
basis, and shall (x) use reasonable best efforts to cause such registration
statement to become effective on the earliest date practicable and (y) cause
such registration statement to become effective in all events not later than 20
days after the Effective Date. After the Corporation becomes a WKSI and upon the
written request of the Trust, the Corporation shall use commercially reasonable
best efforts to file promptly with the SEC a registration statement on Form S-3
covering the resale of all Registrable Securities (and not any other
securities), which registration statement shall also be considered the “Shelf
Registration” for purposes of this Agreement; provided that the foregoing shall
not limit the right of the Corporation under Section 2.01(e) to include
securities other than Registrable Securities in an Underwritten Offering (other
than a block trade) of Registrable Securities pursuant to a Transfer Notice;
provided, further, that the Corporation shall not be required to keep more than
one registration statement covering the sale of Registrable Securities effective
at any given time during the term of this Agreement.

(ii) Subject to Section 2.01(f), the Corporation shall use commercially
reasonable best efforts to keep the Shelf Registration continuously effective
under the Securities Act in order to permit the prospectus forming a part
thereof to be usable by the Trust and its Permitted Transferees until the date
as of which there are no longer Registrable Securities.

(iii) Subject to Section 2.01(a)(ii), the Corporation shall promptly file any
supplements or post-effective amendments, or replace by filing a new
registration statement, the Shelf Registration if required in each case by the
Securities Act, including the rules, regulations or instructions applicable to
the registration form used by the Corporation for the Shelf Registration so that
(x) the Shelf Registration does not include any untrue statement of material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading and (y) the Corporation complies with its
obligations under Item 512(a)(1) of Regulation S-K.

(b) Underwritten Take-Downs. Subject to Section 2.01(c) and Section 2.01(f), in
the event the Trust intends to effect an Underwritten Offering with respect to
Registrable Securities included in the Shelf Registration, the Trust shall
deliver a notice (a “Transfer Notice”) to the Corporation at least 20 days, in
the case of the initial Underwritten Offering that is not a block trade, 10
days, in the case of any other Underwritten Offering that is not a block trade,
and 5 Business Days, in the case of an Underwritten Offering that is a block
trade, prior to the commencement of such Underwritten Offering, stating (A) that
the Trust intends to effect an Underwritten Offering of such Registrable
Securities, (B) the number of Registrable Securities to be included in such
Underwritten Offering and the total number of Registrable Securities held by the
Trust as of the date of the Transfer Notice, (C) whether the Registrable
Securities to be included by the Trust are all of the Registrable Securities
then held by the Trust, (D) the proposed timetable for such Underwritten
Offering and (E) other customary information reasonably requested by the
Corporation.

 

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(c) Limitations. Notwithstanding anything to the contrary herein:

(i) In the event the Corporation consummates a Marketed Offering, the Trust
shall not be permitted to submit a Transfer Notice for an Underwritten Offering,
or otherwise effect any such Underwritten Offering, or effect any
non-underwritten sale or transfer of Registrable Securities (including any Rule
144 Block Trade) (each, a “Non-Underwritten Sale”), prior to 90 days after the
Effective Date (such period, the “Lockup Period”); provided that, following
notice to the Corporation (and providing any information reasonably requested by
the Corporation), the Trust shall be permitted (A) to pledge Registrable
Securities for a bona fide loan or other extension of credit, including any
subsequent transfer of such Registrable Securities to such lender or collateral
agent or other transferee in connection with the exercise of remedies under such
loan or extension of credit, subject to such lender or collateral agent or other
transferee agreeing not to sell or transfer such Registrable Securities for the
remainder of the Lockup Period and (B) to transfer Registrable Securities to any
Subsidiary so long as such Subsidiary complies with the requirements set forth
in Section 2.09.

(ii) The Trust shall not be permitted to submit a Transfer Notice for an
Underwritten Offering, or otherwise effect any such Underwritten Offering,
unless such Transfer Notice is for at least the lesser of (A) a number of
Registrable Securities having a Market Value equal to or exceeding $250,000,000
in the aggregate, (B) a number of Registrable Securities equal to or exceeding
1.25% of the outstanding shares of Common Stock or (C) all of the Registrable
Securities then held by the Trust.

(iii) The Corporation shall not be required to effect:

(A) in the event the Corporation executes a Marketed Offering, (1) more than one
Underwritten Offering pursuant to a Transfer Notice during the 90-day period
following the Lockup Period and (2) any such Underwritten Offering sooner than
90 days following the closing of any Underwritten Offering of Registrable
Securities;

(B) in the event the Corporation does not execute a Marketed Offering, (1) more
than one Underwritten Offering pursuant to a Transfer Notice during the 90-day
period following the Effective Date and (2) any such Underwritten Offering
sooner than 90 days following the closing of any Underwritten Offering of
Registrable Securities; and

(C) during the term of this Agreement, more than eight Underwritten Offerings
pursuant to a Transfer Notice in total.

(iv) The Trust shall not be permitted to offer, sell, contract to sell or
otherwise dispose of any Registrable Securities pursuant to any Underwritten
Offering in an amount that would cause an Adverse Effect (as defined herein), as
determined jointly by the investment banking firms selected pursuant to
Section 2.01(d)(i) to jointly lead or manage such Underwritten Offering.

 

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(d) Underwriting. (i) With respect to any Underwritten Offering of Registrable
Securities pursuant to a Transfer Notice, (A) the Trust shall select one (and no
more than one) nationally recognized investment banking firm acceptable to the
Corporation (such acceptance not to be unreasonably withheld, conditioned or
delayed), it being agreed that Royal Bank of Canada is acceptable to the
Corporation for such purposes, and (B) the Corporation shall select one (and no
more than one) nationally recognized investment banking firm acceptable to the
Trust (such acceptance not to be unreasonably withheld, conditioned or delayed),
which firms together shall jointly lead or manage the Underwritten Offering,
and, unless otherwise agreed, each of the Corporation and the Trust shall select
an equal number of other nationally recognized investment banking firms, if any,
to co-manage such Underwritten Offering.

(ii) With respect to any Underwritten Offering of Registrable Securities
pursuant to a Transfer Notice, the Trustee agrees (A) to sell the Trust’s
Registrable Securities on the basis provided in any customary underwriting
arrangements approved by the Corporation and the Trustee (such approval not to
be unreasonably withheld, conditioned or delayed) and (B) to complete and
execute all customary questionnaires, powers of attorney, indemnities,
underwriting agreements (containing indemnity and contribution provisions of the
type made in customary underwriting agreements for an underwritten public
offering), lock-ups and other documents reasonably required under the terms of
such underwriting arrangements.

(e) Priority on Underwritten Offerings Pursuant to a Transfer Notice. The
Corporation may include securities other than Registrable Securities in an
Underwritten Offering (other than a block trade) of Registrable Securities
pursuant to a Transfer Notice, for any accounts (including for the account of
the Corporation) on the terms provided below. With respect to any such
Underwritten Offering, if the lead or managing underwriters advise that in their
good faith determination the inclusion of the securities proposed to be included
in such Underwritten Offering would adversely affect or jeopardize the price or
distribution of the offering or otherwise adversely affect or jeopardize its
success (an “Adverse Effect”), the Corporation shall include in such
Underwritten Offering (in each case, to the extent inclusion would not have an
Adverse Effect):

(i) first, the Registrable Securities and any Common Stock requested to be
included therein by the Trust and Other Stockholders, respectively, allocated
pro rata among the Trust and such Other Stockholders on the basis of the amount
of Registrable Securities or Common Stock held by the Trust and such Other
Stockholders (and eligible for inclusion in such offering under this Agreement
or an agreement between such Other Stockholders and the Corporation) as of the
date of the Transfer Notice; and

(ii) second, any securities requested to be included therein by the Corporation.

(f) Deferral of Filing; Suspension of Use. The Corporation may defer the filing
(but not the preparation) or the effectiveness, or suspend the use, of the Shelf
Registration at any time if (i) the Board or an Executive Officer determines, in
its good faith judgment, that such action or use (or proposed action or use) (A)
would require the Corporation to make an Adverse Disclosure or (B) would
materially impede, delay or interfere with any significant financing,
significant acquisition, corporate reorganization or other significant
transaction then pending or proposed to be taken by the Corporation or any of
its subsidiaries (or any negotiations, discussions or pending proposals with
respect thereto) or (ii) prior to receiving the applicable

 

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Transfer Notice, the Corporation had determined to effect an underwritten
offering of Common Stock or Corporation securities convertible into or
exchangeable for Common Stock for the Corporation’s account only and the
Corporation had taken substantial steps (such as selecting a lead or managing
underwriter for such offering) and is proceeding with reasonable diligence to
effect such offering; provided, however, that the Corporation shall not be
permitted to exercise a deferral or suspension right pursuant to this
Section 2.01(f), for (i) more than a total of 120 days (which need not be
consecutive) in any 12-month period; or (ii) more than 45 consecutive days at
any time; or (iii) in a manner imposing greater deferral or suspension
limitations on the Trust than those imposed on or with respect to any other
stockholders (including for the avoidance of doubt, the Backstop Parties);
provided further, however, that while the Shelf Registration is deferred or
suspended pursuant to Section 2.01(f)(A), the Corporation shall not be permitted
to register under the Securities Act any Common Stock, warrants or securities
convertible into or exchangeable for Common Stock, other than shares of Common
Stock or other equity securities to be issued in connection with equity
compensation pursuant to Form S-8. The Corporation shall promptly notify the
Trust of any deferral or suspension pursuant to this Section 2.01(f) (provided
that the Corporation shall not disclose any material non-public information that
is the basis for such notice to the Trust without the express consent of the
Trust) and the Corporation agrees that it will terminate any such deferral or
suspension as promptly as reasonably practicable (but in any event not more than
seven days after the abandonment or consummation of any of the foregoing
proposals or transactions) and will promptly notify the Trust in writing of the
termination of any such deferral or suspension. Notwithstanding anything to the
contrary in this Agreement, the Trust may elect from time to time, by delivering
written notice to the Corporation, not to use the Shelf Registration and not to
receive notice of any deferral or suspension pursuant to this Section 2.01(f),
in which case the Trust shall not offer, sell, contract to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration unless
it provides at least two Business Days advance written notice thereof (a
“Re-Activation Notice”). The Trust’s election not to use the Shelf Registration
will not relieve the Corporation of its obligation to maintain the Shelf
Registration as otherwise provided herein, and, following the Corporation’s
receipt of a Re-Activation Notice, the Trust may continue to use the Shelf
Registration and the Corporation may continue to exercise its deferral and
suspension rights pursuant to this Section 2.01(f).

(g) Withdrawal from Underwritten Offering Pursuant to a Transfer Notice. The
Trust may withdraw Registrable Securities from an Underwritten Offering pursuant
to a Transfer Notice by providing written notice to the Corporation; provided
that, if the remaining Registrable Securities in such Underwritten Offering
would not meet the requirements of Section 2.01(c)(ii), then the Trust shall be
deemed to have requested all Registrable Securities in such Underwritten
Offering be withdrawn. In the event all Registrable Securities in an
Underwritten Offering pursuant to a Transfer Notice are so withdrawn, (i) if
such withdrawal occurs prior to the commencement of such Underwritten Offering,
(A) the Trust will reimburse the Corporation for all reasonable documented
out-of-pocket fees and expenses incurred in connection with such Underwritten
Offering or (B) the Underwritten Offering pursuant to a Transfer Notice that has
been withdrawn will be deemed to have been effected for purposes of
Section 2.01(c)(iii) and (ii) if such withdrawal occurs after the commencement
of such Underwritten Offering, (x) the Trust will reimburse the Corporation for
all reasonable documented out-of-pocket fees and expenses incurred in connection
with such Underwritten Offering and (y) the Underwritten Offering

 

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pursuant to a Transfer Notice that has been withdrawn will be deemed to have
been effected for purposes of Section 2.01(c)(iii); provided, however, that in
each case if such withdrawal was based on the Corporation’s failure to comply in
any material respect with its obligations hereunder or in response to the
Corporation’s exercise of a deferral or suspension right pursuant to
Section 2.01(f), such reimbursement from the Trust will not be required, the
Corporation will pay (or reimburse, as applicable) the expenses specified in
Section 2.07, and the proposed Underwritten Offering pursuant to a Transfer
Notice will not be deemed to have been effected for purposes of
Section 2.01(c)(iii). A withdrawal will be irrevocable and, after making such
withdrawal, the Trust will no longer have any right to include the Registrable
Securities so withdrawn in that Underwritten Offering.

(h) Backstop Parties’ Registration Rights.

(i) The Corporation hereby represents and warrants that, as of the Effective
Date, no Backstop Party is an Other Stockholder. The Corporation covenants that
it will not have or enter into any agreement or understanding to permit a
Backstop Party to become an Other Stockholder or otherwise obtain “demand” or
“piggyback” rights with respect to the shares of Common Stock received by such
Backstop Party in connection with the Plan of Reorganization.

(ii) In the event that the Debtors enter into any registration rights agreements
with the Backstop Parties pursuant to the Backstop Commitment Letters (the
“Backstop RRAs”), which contain terms that correlate to terms in this Agreement,
such correlative terms in the Backstop RRAs shall not be more favorable to a
Backstop Party in any material respect, unless (A) the Debtors incorporate such
more favorable terms into this Agreement (or offer to incorporate such more
favorable terms and the Trustee declines such offer) or (B) the Trustee consents
to such inclusion in the applicable Backstop RRA. Notwithstanding the foregoing,
it is understood that (1) no Backstop RRA shall have any “demand” or “piggyback”
rights for the applicable Backstop Party to participate as a seller in an
underwritten offering, and (2) the fact that a Backstop RRA does not include or
require a lockup provision shall not be considered to be a term that is more
favorable to a Backstop Party, and neither the Torts Claimants Committee nor the
Trustee shall be permitted to object or, under this Section 2.01(h)(ii),
withhold consent to the absence of a lockup provision in a Backstop RRA.

(i) No Other Restrictions. The Corporation will not take any action to restrict
the Trust’s ability to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities to any person except as provided in this Agreement or in
the Corporation’s Amended and Restated Articles of Incorporation, as amended
from time to time, unless such action is generally applicable to all of the
Corporation’s stockholders.

SECTION 2.02. Piggyback Offerings. (a) Right to Piggyback. Each time the
Corporation proposes to offer Common Stock in an underwritten offering (other
than pursuant to an Excluded Registration) registered under the Securities Act
(whether for the account of the Corporation or the account of any equity holder
of the Corporation other than the Trust) (a “Piggyback Offering”), the
Corporation shall give prompt written notice to the Trust (which notice shall be
given not less than 10 Business Days prior to such Piggyback Offering (the

 

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“Piggyback Notice”)), which notice shall offer to the Trust the opportunity to
include any or all of its Registrable Securities in such Piggyback Offering,
subject to the limitations contained in Section 2.01(c)(iv) and Section 2.02(b).
To participate in any Piggyback Offering, the Trust shall provide written notice
to the Corporation (stating the number of Registrable Securities desired to be
registered or included and the total number of Registrable Securities held by
the Trust as of the date of the Piggyback Notice) within five Business Days
after the date of such notice from the Corporation. The Trust shall have the
right to withdraw its request for inclusion of its Registrable Securities in any
Piggyback Offering prior to the commencement of such Piggyback Offering by
giving written notice to the Corporation of such withdrawal. Subject to the
limitations contained in Section 2.01(c)(iv) and Section 2.02(b), the
Corporation shall include in such underwritten offering all such Registrable
Securities so requested to be included therein. No registration pursuant to this
Section 2.02(a) shall relieve the Corporation of its obligation to effect a
registration statement, as contemplated by Section 2.01 hereof. The Trust’s
rights to a Piggyback Offering may be exercised on an unlimited number of
occasions. Notwithstanding the foregoing, the Corporation may at any time
withdraw, abandon or cease proceeding with any such offering for any reason at
any time.

(b) Priority on Piggyback Offerings. (i) If a Piggyback Offering was initiated
by the Corporation and if the lead or managing underwriter(s) advise that in
their good faith determination the inclusion of the Registrable Securities
proposed to be included in such Piggyback Offering would cause an Adverse
Effect, the Corporation shall include in such Piggyback Offering (in each case,
to the extent inclusion would not have an Adverse Effect):

(A) if such Piggyback Offering is commenced during the Lockup Period:

(1) first, any Registrable Securities requested to be included therein by the
Trust; and

(2) second, and only if all of the securities referenced in clause (1) above
have been included, the Common Stock the Corporation proposes to sell and/or any
Common Stock requested to be included therein by Other Stockholders, as
determined by the Corporation;

(B) if such Piggyback Offering is commenced at any other time:

(1) first, the Common Stock the Corporation proposes to sell; and

(2) second, any Registrable Securities and Common Stock requested to be included
therein by the Trust and Other Stockholders, respectively, allocated pro rata
among the Trust and such Other Stockholders on the basis of the amount of
Registrable Securities or Common Stock held by the Trust and such Other
Stockholders (and eligible for inclusion in such offering under this Agreement
or an agreement between such Other Stockholders and the Corporation) as of the
date of the Piggyback Notice.

 

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If as a result of the provisions of this Section 2.02(b)(i), the Trust shall not
be entitled to include all Registrable Securities in such Piggyback Offering
that the Trust has requested to be so included, the Trust may withdraw its
request to include its Registrable Securities in such Piggyback Offering prior
to the commencement thereof.

(ii) If a Piggyback Offering was initiated by any Other Stockholders and if the
lead or managing underwriter(s) advise that in their good faith determination
the inclusion of the Registrable Securities proposed to be included in such
Piggyback Offering would cause an Adverse Effect, the Corporation shall include
in such Piggyback Offering (in each case, to the extent inclusion would not have
an Adverse Effect):

(A) first, any Registrable Securities and the Common Stock requested to be
included therein by the Trust and Other Stockholders, respectively, allocated
pro rata among the Trust and such Other Stockholders on the basis of the amount
of Registrable Securities or Common Stock then held by the Trust and such Other
Stockholders (and eligible for inclusion in such offering under this Agreement
or an agreement between such Other Stockholders and the Corporation); and

(B) second, and only if all of the securities referenced in clause (A) above
have been included, any securities requested to be included therein by the
Corporation.

If as a result of the provisions of this Section 2.02(b)(ii), the Trust shall
not be entitled to include all Registrable Securities in such Piggyback Offering
that the Trust has requested to be so included, the Trust may withdraw its
request to include its Registrable Securities in such Piggyback Offering prior
to the commencement thereof.

(c) Underwriting. (i) The Corporation (or Other Stockholders, if contractually
required) shall select the investment banking firm or firms to lead or manage
any Piggyback Offering, and the other investment banking firms, if any, to
co-manage such Piggyback Offering.

(ii) The Trust may not participate in a Piggyback Offering unless the Trust
(A) agrees to sell its Registrable Securities on the basis provided in any
customary underwriting arrangements approved by the Corporation and
(B) completes and executes all customary questionnaires, powers of attorney,
indemnities, underwriting agreements (containing indemnity and contribution
provisions of the type included in customary underwriting agreements for an
underwritten public offering), lock-ups and other documents reasonably required
under the terms of such underwriting arrangements.

(d) No Effect on Registration Rights. No registration or offering of Registrable
Securities effected pursuant to this Section 2.02 shall be deemed to have been
effected pursuant to Section 2.01(b).

SECTION 2.03. Holdback. In the event of an underwritten offering (other than a
block trade) of equity securities of the Corporation (whether for the account of
the Corporation, the Trust or otherwise), at the request of the lead or managing
underwriter(s), (a) each of the Trust and the Corporation agrees to enter into a
customary “lockup” agreement for such offering in a

 

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form reasonably satisfactory to the Corporation and the Trust prohibiting any
offer, sale, contract to sell or other disposition of Common Stock, including
any sale pursuant to Rule 144, during the period (or such lesser period as the
lead or managing underwriter(s) may determine) commencing seven days prior to
the effective date of the registration statement for such underwritten offering
(or, in the case of an offering pursuant to an effective shelf registration
statement pursuant to Rule 415, seven days prior to the commencement date for
such underwritten offering) and ending no later than the 90th day after such
effective date (or commencement date) and (b) the Corporation agrees to cause
the executive officers and directors of the Corporation so requested by the lead
or managing underwriter(s), and any Other Stockholders (other than those who
“beneficially own” (as such term is defined under and determined pursuant to
Rule 13d-3 under the Exchange Act) (x) less than 4.75% of the outstanding shares
of Common Stock and (y) together with all other Other Stockholders so excluded,
less than 7.5% of the outstanding shares of Common Stock), to enter into
customary “lockup” agreements for such offering in a form satisfactory to the
Corporation; provided that, with respect to the Corporation, such restrictions
shall not apply to any offer, sale, contract to sell or other disposition of
Common Stock by the Corporation pursuant to any “at the market offering” (as
such term is defined under Rule 415 of the Securities Act) and shall be subject
to other customary exclusions as permitted by the lead or managing
underwriter(s); provided, further, (i) that the “lockup” period shall be
substantially similar for the Trust and all Other Stockholders who are
participating in such offering; (ii) the foregoing restrictions shall be
applicable to the Trust only to the extent they are applicable on substantially
similar or more restrictive terms to all directors and executive officers of the
Corporation requested by the lead or managing underwriter(s) to be subject to
the “lockup” and (iii) if the lockup restrictions applicable to any director or
executive officer of the Corporation, or the restrictions applicable to any
Other Stockholder participating in such offering, are less restrictive (due to a
waiver, release of obligation or otherwise) than the foregoing restrictions
applicable to the Trust, then such less restrictive provisions shall apply to
the Trust in connection with such underwritten offering.

Notwithstanding the foregoing, under any “lockup” agreement under this
Section 2.03, the Trust shall be permitted (A) to pledge Registrable Securities
for a bona fide loan or other extension of credit, including any subsequent
transfer of such Registrable Securities to such lender or collateral agent or
other transferee in connection with the exercise of remedies under such loan or
extension of credit, subject to such lender or collateral agent or other
transferee agreeing not to sell or transfer such Registrable Securities for the
remainder of the lockup period thereunder and (B) to transfer Registrable
Securities to Subsidiary so long as such Subsidiary complies with the
requirements set forth in Section 2.09.

SECTION 2.04. Registration Procedures.

(a) In connection with the registration statement required by or filed pursuant
to Section 2.01(a), subject to the terms and conditions of this Agreement, the
Corporation shall use commercially reasonable best efforts to effect the Shelf
Registration and the sale, as applicable, of the Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
the Corporation shall as promptly as practicable:

 

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(i) furnish to the Trust copies of reasonably complete drafts of the
registration statement or any amendments thereto, and the Corporation shall
consider in good faith any corrections reasonably requested by the Trust with
respect to information related to the Trust prior to filing any such
registration statement or amendment and, if requested by the Trust, provide the
Trust, any participating underwriter and any attorney, accountant or other agent
retained by the Trust, reasonable opportunity to participate in the preparation
of such registration statement;

(ii) comply with the provisions of Section 2.01(a)(ii) and Section 2.01(a)(iii);

(iii) furnish to the Trust and the underwriters of the offering and sale of
Registrable Securities being registered, without charge, electronic copies of
such registration statement and any post-effective amendment thereto (but
excluding all schedules, all exhibits and all materials incorporated or deemed
incorporated therein by reference) and the prospectus included in such
registration statement (including each preliminary prospectus) as the Trust or
lead or managing underwriter(s) may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Trust or the sale of
such securities by such underwriters (it being understood that, subject to
Section 2.01(f), Section 2.03, Section 2.05 and Section 2.06 and the
requirements of the Securities Act and applicable state securities laws, the
Corporation consents to the use of the prospectus and any amendment or
supplement thereto by the Trust and the underwriters in connection with the
offering and sale of the Registrable Securities covered by the registration
statement of which such prospectus, amendment or supplement is a part);

(iv) use commercially reasonable best efforts to register or qualify such
Registrable Securities under such other securities or “blue sky” laws of such
jurisdictions as the lead or managing underwriter(s) reasonably request; and use
commercially reasonable best efforts to keep each such registration or
qualification (or exemption therefrom) effective during the period in which such
registration statement is required to be kept effective; provided, however, that
the Corporation shall not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B) consent to general service of process in any such
jurisdiction, (C) take any action that would subject it to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so subject or
(D) prepare or file any prospectus, prospectus supplement or post-effective
amendment for purposes of effecting a Non-Underwritten Sale;

(v) promptly following its actual knowledge thereof, notify the Trust (A) when
the prospectus or any prospectus supplement or post-effective amendment has been
filed and, with respect to the registration statement or any post-effective
amendment, when the same has become effective, (B) when the SEC notifies the
Corporation whether there will be a “review” of the registration statement or
provides any comments (written or oral), (C) of the issuance by any state
securities or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or “blue sky” laws or the initiation of any
proceedings for that purpose, or the receipt of any comments (oral or written)
by state securities or other regulatory authority with respect thereto, and
(D) upon the discovery that, or upon the happening of any event as a result of
which, any prospectus or registration statement

 

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contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and, as promptly as practicable thereafter, prepare and file
with the SEC and furnish a supplement or amendment to such prospectus so that,
as thereafter deliverable to the purchasers of such Registrable Securities, such
prospectus shall not contain any untrue statement of a material fact or omit a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

(vi) otherwise use commercially reasonable best efforts to comply with all
applicable rules and regulations of the SEC, including the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder, and make
generally available to the Corporation’s security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act, which
requirement shall be deemed to be satisfied if the Corporation files complete
and accurate information on Forms 10-K, 10-Q and 8-K under the Exchange Act and
otherwise complies with Rule 158 under the Securities Act;

(vii) if requested by the lead or managing underwriter(s) or the Trust, promptly
incorporate in a prospectus supplement or post-effective amendment information
with respect to the Registrable Securities being sold by the Trust, the purchase
price being paid therefor by the underwriters and with respect to any other
terms of the Underwritten Offering of the Registrable Securities to be sold in
such offering, and promptly make all required filings of such prospectus
supplement or post-effective amendment;

(viii) promptly make available for inspection by the Trust, any underwriter
participating in any disposition pursuant to the registration statement and any
attorney, accountant or other agent or Representative retained by the Trust or
underwriter (collectively, the “Inspectors”), all financial and other records
and pertinent corporate documents (collectively, the “Records”) and properties
of the Corporation, as shall be reasonably necessary to enable them to exercise
any legal due diligence responsibility, and cause the Corporation’s officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration statement; provided,
however, that, unless the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Corporation
shall not be required to provide any information under this subparagraph
(viii) if (A) the Corporation reasonably and in good faith believes, after
consultation with counsel for the Corporation, that to do so would cause the
Corporation to forfeit an attorney-client privilege that was applicable to such
information or (B) either (1) the Corporation has requested and been granted
from the SEC confidential treatment of such information contained in any filing
with the SEC or documents provided supplementally or otherwise or (2) the
Corporation reasonably determines in good faith that such Records are
confidential and so notifies the Inspectors in writing, unless prior to
furnishing any such information with respect to clause (B) the Trust agrees to
enter into a confidentiality agreement in a form acceptable to the Corporation;
and provided, further, that the Trust agrees that it shall, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Corporation and allow the Corporation, at its expense, to
undertake appropriate action and to prevent disclosure of the Records deemed
confidential;

 

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(ix) use commercially reasonable best efforts to obtain (A) an opinion of
outside counsel to the Corporation including a customary 10b-5 statement (which
may be addressed to the underwriters), provided that such counsel is reasonably
acceptable to the Trust and the lead or managing underwriter(s), and (B) a
comfort letter or comfort letters from the Corporation’s independent public
accountants, dated as of the date of the closing, addressed to the underwriters,
each in customary form and covering such matters of the type customarily covered
by opinions or comfort letters, as the case may be, as reasonably requested by
the Trust or the lead or managing underwriter(s);

(x) use commercially reasonable best efforts to cause the Registrable Securities
included in the Shelf Registration to be promptly listed on each securities
exchange, if any, on which similar securities issued by the Corporation are then
listed;

(xi) maintain a transfer agent and registrar for all Registrable Securities
registered hereunder;

(xii) if such registration is in connection with an Underwritten Offering,
provide officers’ certificates and other customary closing documents as the lead
or managing underwriter of such offering may reasonably request;

(xiii) cooperate with the Trust and each underwriter participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the Financial Industry
Regulatory Authority (“FINRA”);

(xiv) notify the Trust promptly of any request by the SEC for the amending or
supplementing of such registration statement or prospectus or for additional
information;

(xv) advise the Trust, promptly after it receives (A) notice or actual
knowledge, of the issuance or threatened issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation of
any proceeding for such purpose and promptly use commercially reasonable efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued, or (B) any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and the Corporation agrees to
use commercially reasonable best efforts to (x) prevent the issuance of any such
stop order, and in the event of such issuance, to obtain the withdrawal of any
such stop order and (y) obtain the withdrawal of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction at the earliest practicable date;

 

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(xvi) enter into and perform its obligations under customary agreements
(including an underwriting agreement in customary form with the relevant
underwriter) and take such other actions as are prudent and reasonably required
to expedite or facilitate the disposition of Registrable Securities, including
causing the appropriate officers and members of the management of the
Corporation as the lead or managing underwriter of such offering may reasonably
request to participate in the selling efforts relating to an Underwritten
Offering of Registrable Securities to the extent customary for such offering
(including, to the extent customary, telephonic, video or recorded participation
in road shows); and

(xvii) take all other actions reasonably necessary to effect the registration of
the Registrable Securities contemplated hereby.

(b) The Trust shall reasonably cooperate with the Corporation in the preparation
and filing of the registration statement under the Securities Act and any
related prospectus, in each case pursuant to this Agreement, and any amendment
or supplement thereto, and provide the Corporation with all information
reasonably necessary to complete such preparation as the Corporation may, from
time to time, reasonably request in writing, and the Corporation may exclude
from such registration the Registrable Securities of the Trust (or not proceed
with such registration) and be relieved of any related obligations hereunder if
the Trust fails to furnish such information within a reasonable time after
receiving such request.

(c) In furtherance of the foregoing, the Trust shall reasonably cooperate with
the Corporation with respect to providing information relevant to the
preservation of the Corporation’s tax attributes, including the ownership of
Registrable Securities; provided that the Trust shall have no obligation
pursuant to this Section 2.04(c) to provide any such information that the Trust
determines, in its reasonable judgment, it is legally or contractually
prohibited from disclosing.

(d) Each of the parties shall treat all notices of proposed transfers and
registrations, all notices of, and information relating to, any blackout periods
under Section 2.01(f) and all Suspension Notices received from another party
with the strictest confidence (and in accordance with the terms of any
applicable confidentiality agreement among the Corporation and the Trust) and
shall not disseminate such information or disclose the existence thereof.

(e) Plan of Distribution. The Corporation agrees to include the Shelf
Registration, and any related prospectus (to the extent such inclusion is
permitted under applicable SEC regulations and is consistent with comments
received from the SEC during any SEC review of such registration statement), a
“Plan of Distribution” section substantially in the form of Annex A hereto and
that shall be no more restrictive on the ability of the Trust to sell or
transfer Registrable Securities than that included in any registration statement
filed by the Corporation on behalf of any Other Stockholder.

SECTION 2.05. Free Writing Prospectuses. The Trust agrees that, unless it
obtains the prior written consent of the Corporation, it shall not make any
offer relating to the Registrable Securities that would constitute a “free
writing prospectus,” as defined in Rule 405 under the Securities Act, required
to be filed with the SEC. The Corporation represents that any “issuer free
writing prospectus,” as defined in Rule 433 under the Securities Act, prepared
by or on behalf of the Corporation (an “Issuer Free Writing Prospectus”) shall
not include any information

 

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that conflicts with the information contained in a registration statement or
prospectus and that any Issuer Free Writing Prospectus, when taken together with
the information in the registration statement and the prospectus, shall not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

SECTION 2.06. Suspension of Dispositions. The Trust agrees that upon receipt of
any notice (a “Suspension Notice”) from the Corporation of the happening of any
event of the kind described in Section 2.04(a)(v)(B) or (C) or
Section 2.04(a)(xv), the Trust shall forthwith discontinue disposition of
Registrable Securities pursuant to the Shelf Registration until the Trust’s
receipt of the copies of the supplemented or amended prospectus, or until it is
advised in writing (the “Advice”) by the Corporation that the use of the
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the prospectus, and,
if so directed by the Corporation, the Trust shall deliver to the Corporation
all copies, other than permanent file copies then in the Trust’s possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice. The Corporation shall use commercially reasonable best
efforts and take such actions as are reasonably necessary to render the Advice
as promptly as practicable. Any Suspension Notice shall not contain information
other than as required by this Section 2.06.

SECTION 2.07. Registration Expenses. The Corporation shall pay all of its fees
and expenses incident to the performance of or compliance with its obligations
under this Article II, whether or not any Registrable Securities are sold
pursuant to a registration statement, including fees and expenses of compliance
with securities or blue sky laws, SEC or trading market filing fees, FINRA fees,
listing application fees, printing expenses, transfer agent’s and registrar’s
fees, cost of distributing prospectuses in preliminary and final form as well as
any supplements thereto, fees and disbursements of counsel for the Corporation
and all independent certified public accountants for the Corporation and other
Persons retained by the Corporation and fees and disbursements of one counsel
for the Trust in connection with the Shelf Registration (not to exceed $100,000)
and for each Underwritten Offering of Registrable Securities (not to exceed
$100,000 per offering) pursuant to a Transfer Notice (but not including any
underwriting discounts or commissions attributable to the sale of Registrable
Securities or fees and expenses of any other Representative representing any
underwriters or the Trust). Subject to the immediately preceding sentence, the
Trust shall pay all its own expenses, including fees and expenses of any
additional counsel retained by it.

SECTION 2.08. Indemnification. (a) Indemnification by the Corporation. The
Corporation agrees to indemnify and hold harmless, to the fullest extent
permitted by law, the Trust, the Trustee, the officers, directors, employees and
investment manager or managers acting on behalf of the Trust with respect to the
Registrable Securities, Persons, if any, who Control any of them, and each of
their respective Representatives (each, an “Indemnitee”), from and against any
and all losses, penalties, judgments, suits, costs, claims, damages, liabilities
(including amounts paid in settlement) and expenses, joint or several (including
reasonable costs of investigation and legal expenses) (“Losses”), arising out of
or caused by any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or any related prospectus or Issuer Free
Writing Prospectus in each case relating to an offering or sale of the
Registrable Securities (as amended or supplemented if the Corporation shall have
furnished any

 

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amendments or supplements thereto), or arising out of 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 in the case of the
prospectus, in light of the circumstances in which they were made, not
misleading, except insofar as such Losses arise out of or are caused by any such
untrue statement or omission included or omitted in conformity with information
furnished to the Corporation in writing by an Indemnitee or any Person acting on
behalf of an Indemnitee expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectuses or
Issuer Free Writing Prospectuses shall not inure to the benefit of such
Indemnitee if the Person asserting any Losses against such Indemnitee purchased
Registrable Securities and (i) prior to the time of sale of the Registrable
Securities to such Person (the “Initial Sale Time”) the Corporation shall have
notified the Trust that the preliminary prospectus or Issuer Free Writing
Prospectus (as it existed prior to the Initial Sale Time) contains an untrue
statement of material fact or omits to state therein a material fact required to
be stated therein in order to make the statements therein not misleading,
(ii) such untrue statement or omission of a material fact was corrected in a
preliminary prospectus or, where permitted by law, Issuer Free Writing
Prospectus and such corrected preliminary prospectus or Issuer Free Writing
Prospectus was provided to the Trust a reasonable amount of time in advance of
the Initial Sale Time such that the corrected preliminary prospectus or Issuer
Free Writing Prospectus could have been provided to such Person prior to the
Initial Sale Time, (iii) such corrected preliminary prospectus or Issuer Free
Writing Prospectus (excluding any document then incorporated or deemed
incorporated therein by reference) was not conveyed to such Person at or prior
to the Initial Sale Time and (iv) such Losses would not have occurred had the
corrected preliminary prospectus or Issuer Free Writing Prospectus (excluding
any document then incorporated or deemed incorporated therein by reference) been
conveyed to such Person as provided for in clause (iii) above.

(b) Indemnification by the Trust. The Trust agrees, to the fullest extent
permitted under applicable law, to indemnify and hold harmless each of the
Corporation, each Person, if any, who Controls the Corporation, and each of
their respective Representatives to the same extent as the foregoing indemnity
from the Corporation, but only with respect to Losses arising out of or caused
by an untrue statement or omission included or omitted in conformity with
information furnished in writing by or on behalf of the Trust expressly for use
in any registration statement described herein or any related prospectus
relating to the Registrable Securities (as amended or supplemented if the
Corporation shall have furnished any amendments or supplements thereto). The
liability of the Trust hereunder shall in no event exceed the dollar amount of
the net proceeds received by the Trust in the sale of Registrable Securities
giving rise to such indemnification obligation.

(c) Indemnification Procedures. (i) In case any claim is asserted or any
proceeding (including any governmental investigation) shall be instituted in
which indemnity may be sought by an Indemnitee pursuant to any of the preceding
paragraphs of this Section 2.08, such Indemnitee shall promptly notify in
writing the Person against whom such indemnity may be sought (the “Indemnitor”);
provided, however, that the omission so to notify the Indemnitor shall not
relieve the Indemnitor of any liability that it may have to such Indemnitee
except to the extent that the Indemnitor was prejudiced by such failure to
notify. The Indemnitor, upon request of the Indemnitee, shall retain counsel
reasonably satisfactory to the Indemnitee to represent (subject to the following
sentences of this Section 2.08(c)(i)) the Indemnitee and any

 

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others the Indemnitor may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnitee shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such Indemnitee
unless (A) the Indemnitor and the Indemnitee shall have mutually agreed to the
retention of such counsel, (B) the Indemnitor fails to take reasonable steps
necessary to defend diligently any claim within ten days after receiving written
notice from the Indemnitee that the Indemnitee believes the Indemnitor has
failed to take such steps, or (C) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnitor and the Indemnitee
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests or legal defenses between them
and, in all such cases, the Indemnitor shall be responsible for the reasonable
fees and expenses of only such counsel. It is understood that the Indemnitor
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate law firm (in addition to any appropriate local counsel) for all such
Indemnitees. The Indemnitor shall not be liable for any settlement of any
proceeding effected without its written consent.

(ii) If the indemnification provided for in this Section 2.08 is held by a court
of competent jurisdiction to be unavailable to an Indemnitee in respect of any
Losses referred to herein, then the Indemnitor, in lieu of indemnifying such
Indemnitee hereunder, shall contribute to the amount paid or payable by such
Indemnitee as a result of such Losses in such proportion as is appropriate to
reflect the relative fault of the Indemnitor and the Indemnitee and Persons
acting on behalf of or Controlling the Indemnitor or the Indemnitee in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. The relative fault of the
Corporation, the Trust and Persons acting on behalf of or Controlling the
Corporation or the Trust 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 Corporation, the Trust or by Persons acting on behalf of the
Corporation or the Trust and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Indemnitor shall not be required to contribute pursuant to this
Section 2.08(c)(ii) if there has been a settlement of any proceeding effected
without its written consent.

(iii) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.08(c) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 2.08(c), the Trust shall not be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by the Trust from the sale of the
Registrable Securities subject to any proceeding (including any governmental
investigation) exceeds the amount of any damages that the Trust has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

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(d) Survival. The indemnification contained in this Section 2.08 shall remain
operative and in full force and effect regardless of any termination of this
Agreement.

SECTION 2.09. Transfer of Registration Rights.

(a) Other than, in the case of clause (b) of this sentence, the rights and
obligations of the Trust relating to “demand” and “piggyback” rights (including,
without limitation, those set forth in Section 2.01(b), (d) and (g) and
Section 2.02) (the “Non-Transferable Rights”), the rights and obligations of the
Trust under this Agreement (including the rights and obligations under
Section 2.08, and which, in the case of obligations of the Trust and any
Permitted Transferees, shall be several and not joint) may be transferred or
assigned (a) to any Subsidiary of the Trust or (b) to any Person that directly
acquires from the Trust, in a single transaction, Registrable Securities in an
amount equal to or greater than 1% of the outstanding shares of Common Stock
(or, if less, all Registrable Securities then held by the Trust) (each such
Person, a “Permitted Transferee”), but only if (x) such transfer or assignment
is agreed to in writing, and a copy of such agreement is furnished to the
Corporation prior to or concurrently with such transfer or assignment, (y) prior
to or concurrently with such transfer or assignment, such Subsidiary or
Permitted Transferee furnishes the Corporation with written notice of the name
and address of such Subsidiary or Permitted Transferee and the number of
Registrable Securities with respect to which such registration rights (other
than Non-Transferable Rights) are being transferred or assigned and (z) the
Subsidiary or Permitted Transferee agrees in writing with the Corporation to be
bound by all the provisions and obligations contained herein applicable to the
Trust (other than Non-Transferable Rights), such agreement being in a form
reasonably satisfactory to the Corporation. The rights and obligations under
this Agreement of any Permitted Transferee shall terminate automatically upon
the date that all Registrable Securities held by such Permitted Transferee may
be sold in a single day without notice or manner of sale restrictions and, if
the Corporation has not complied with its periodic reporting requirements under
the Exchange Act, without current information, pursuant to, and in accordance
with, Rule 144 (giving effect, if applicable, to “tacking” the holding period of
the Trust).

(b) In the event the Corporation engages in a merger or consolidation in which
the Registrable Securities are converted into securities of another company,
appropriate arrangements will be made so that the registration rights provided
under this Agreement continue to be provided to the Trust, its applicable
Subsidiaries and any Permitted Transferee by the issuer of such securities.

 

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ARTICLE III

Periodic Reporting and Rule 144

SECTION 3.01. Periodic Reporting. If the Corporation is subject to the
requirements of Section 13, 14 or 15(d) of the Exchange Act, the Corporation
covenants that it will file any reports required to be filed by it under the
Securities Act and the Exchange Act, so as to enable the Trust to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144. Upon the request of the
Trust, the Corporation will deliver to the Trust a written statement as to
whether it has complied with such requirement.

SECTION 3.02. Rule 144 Block Trades. Upon request and at least three Business
Days advance notice by the Trust, the Corporation shall use its commercially
reasonable best efforts to cooperate in a timely manner with reasonable requests
by the Trust with respect to any Rule 144 Block Trade by the Trust, including
delivery of customary certificates to the Corporation’s transfer agent or the
Trust’s broker, but excluding the delivery of legal opinions, disclosure letters
or comfort letters.

ARTICLE IV

Mirror Voting

SECTION 4.01. Mirror Voting. The Corporation and the Trust hereby agree that all
votes with respect to Common Stock held by the Trust from time to time in excess
of 9.9% of the Corporation’s outstanding shares of Common Stock as of any
applicable record date for voting shall, with respect to all matters subject to
a vote of the shareholders other than matters directly related to the natural
environment or safety, be cast in the same proportion as the votes of all other
shareholders of the Corporation (herein referred to as “mirror voting”), unless
on or before the Effective Date, the Corporation determines in good faith
(taking into account relevant factors including, among other things, the outcome
of any offering or issuance of Common Stock or equity-linked securities in
furtherance of the Plan of Reorganization, to the extent then known), and after
providing all reasonably requested information to, and consultation with, tax
counsel to the Trust and to the Tort Claimants Committee, that the absence of
mirror voting is reasonably necessary or advisable to preserve the ability of
the Debtors to utilize their net operating loss carryforwards and other tax
attributes without limitation under section 382 of the Internal Revenue Code of
1986, as amended, and any applicable state law. If the Corporation makes such a
determination, the Corporation will deliver written notice to such effect to the
Trust on or within two Business Days after the Effective Date. If mirror voting
is so implemented, and upon the Trust’s request, the Corporation shall provide
acknowledgement of and reasonable cooperation with the Trust’s position that it
will not be an “affiliate” of the Corporation under Rule 144 as a result of its
holding Registrable Securities; provided that the Corporation and its counsel
shall not be required to deliver any legal opinion with respect to such matter.
In the event mirror voting is implemented and (a) the Trust is determined to be
an “affiliate” of the Corporation under Rule 144 or (b) the Corporation fails to
comply in any material respect with its obligations under this Section 4.01,
mirror voting shall be suspended automatically, effective as of the day on which
the Trust delivers notice to the Corporation stating that the events described
in clause (a) or (b) have occurred and describing in reasonable detail the
circumstances giving rise thereto.

 

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ARTICLE V

Termination

SECTION 5.01. Termination. Other than Sections 2.07 and 2.08 and Article VI,
this Agreement and the respective rights and obligations of the Corporation and
the Trust hereunder (a) shall terminate automatically on the date as of which
the Trust beneficially owns less than 4% of the outstanding shares of Common
Stock and all Registrable Securities may be sold in a single day without notice
or manner of sale restrictions pursuant to, and in accordance with, Rule 144
(and the Trust shall promptly notify the Corporation when its beneficial
ownership is less than 4% and all Registrable Securities may be sold in a single
day without notice or manner of sale restrictions pursuant to, and in accordance
with, Rule 144) and (b) may be terminated by the Trust upon written notice by
the Trust to the Corporation once the Trust beneficially owns less than 10% of
the outstanding shares of Common Stock; provided that, in the event the Trust
exercises its right pursuant to clause (b), the respective rights and
obligations of the Corporation and the Trust under Section 2.03 shall remain in
effect until the Trust beneficially owns less than 7.5% of the outstanding
shares of Common Stock (and the Trust shall promptly notify the Corporation when
its beneficial ownership is less than 7.5%). All liabilities, rights or
obligations under Sections 2.07 and 2.08 and Article VI shall remain in effect
in accordance with the terms of such provisions.

ARTICLE VI

Miscellaneous

SECTION 6.01. Notices. Any notice, request, instruction, consent, document or
other communication required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been sufficiently given or served for
all purposes (a) upon delivery when personally delivered; (b) on the delivery
date after having been sent by a nationally or internationally recognized
overnight courier service (charges prepaid); (c) at the time received when sent
by registered or certified mail, return receipt requested, postage prepaid; or
(d) at the time when a “read receipt” is received (or the first Business Day
following such receipt if the date of such receipt is not a Business Day) if
sent by email, in each case, to the recipient at the address or email, as
applicable, indicated below:

If to the Corporation:

PG&E Corporation

77 Beale Street

San Francisco, CA 94105

Attention: Janet Loduca, Senior Vice President and General Counsel

 

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with a copy to:

Cravath, Swaine & Moore LLP

825 8th Avenue

New York, NY 10019

Attention: Richard Hall, Nicholas A. Dorsey and C. Daniel Haaren

Email: RHall@cravath.com; NDorsey@cravath.com;

DHaaren@cravath.com

If to the Trust:

Hon. John K. Trotter (Ret.), Trustee

PG&E Fire Victim Trust

Two Embarcadero Center

Suite 1500

San Francisco, CA 94111

Email: trustee@firevictimtrust.com

with a copy to:

Cathy Yanni, Claims Administrator

PG&E Fire Victim Trust

Two Embarcadero Center

Suite 1500

San Francisco, CA 94111

Email: claimsadministrator@firevictimtrust.com

Brown Rudnick LLP

7 Times Square

New York, NY 11036

Attn: David J. Molton, Esq.,

Gerard T. Cicero, Esq.

Email: dmolton@brownrudnick.com,

gcicero@brownrudnick.com

provided, however, if any party shall have designated a different addressee
and/or contact information by notice in accordance with this Section 6.01, then
to the last addressee as so designated.

 

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SECTION 6.02. Authority. Each of the parties hereto represents to the other that
(a) it has the corporate or other organizational power and authority to execute,
deliver and perform this Agreement, (b) the execution, delivery and performance
of this Agreement by it has been duly authorized by all necessary corporate or
organizational action and no such further action is required, (c) it has duly
and validly executed and delivered this Agreement and (d) this Agreement is a
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and
general equity principles.

SECTION 6.03. No Third Party Beneficiaries. Except for Indemnitees as set forth
in Section 2.08, this Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or will confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

SECTION 6.04. Governing Law; Forum Selection. This Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State of New
York irrespective of choice of laws principles thereof. Any action or proceeding
against the parties relating in any way to this Agreement may be brought and
enforced exclusively in the courts of the State of New York located in the
Borough of Manhattan or (to the extent subject matter jurisdiction exists
therefor) the U.S. District Court for the Southern District of New York, and the
parties irrevocably submit to the jurisdiction of both courts in respect of any
such action or proceeding.

SECTION 6.05. WAIVER OF JURY TRIAL. EACH PARTY WAIVES THE RIGHT TO A TRIAL BY
JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY
MATTERS DESCRIBED OR CONTEMPLATED HEREIN, AND AGREES TO TAKE ANY AND ALL ACTION
NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

SECTION 6.06. Successors and Assigns. Except as expressly provided in
Section 2.09, neither this Agreement nor any of the rights, interests or
obligations provided by this Agreement may be assigned by any party (whether by
operation of law or otherwise) without the prior written consent of the other
party, and any such assignment without such prior written consent shall be null
and void. Subject to the immediately preceding sentence, this Agreement shall be
binding upon and benefit the Corporation, the Trust and their respective
successors and permitted assigns, and Indemnitees pursuant to Section 2.08.

SECTION 6.07. Entire Agreement. This Agreement contains the final, exclusive and
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, whether written or oral, among the parties with respect to the
subject matter hereof. This Agreement shall not be deemed to contain or imply
any restriction, covenant, representation, warranty, agreement or undertaking of
any party with respect to the transactions contemplated hereby other than those
expressly set forth herein, and none shall be deemed to exist or be inferred
with respect to the subject matter hereof.

 

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SECTION 6.08. Severability. Whenever possible, each term and provision of this
Agreement will be interpreted in such manner as to be effective and valid under
law. If any term or provision of this Agreement, or the application thereof to
any Person or any circumstance, is held to be illegal, invalid or unenforceable,
(a) a suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be legal, valid and enforceable, the intent and purpose
of such illegal, invalid or unenforceable provision and (b) the remainder of
this Agreement or such term or provision and the application of such term or
provision to other Persons or circumstances shall remain in full force and
effect and shall not be affected by such illegality, invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
legality, validity or enforceability of such term or provision, or the
application thereof, in any jurisdiction.

SECTION 6.09. Amendment. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement
executed by a duly authorized representative or officer of each of the parties.

SECTION 6.10. Headings. The descriptive headings of the Articles, Sections and
paragraphs of this Agreement are included for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit, modify or
affect any of the provisions hereof.

SECTION 6.11. Counterparts; Facsimiles. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
taken together shall constitute one and the same Agreement. All signatures of
the parties may be transmitted by facsimile or electronic delivery, and each
such facsimile signature or electronic delivery signature (including a PDF
signature) will, for all purposes, be deemed to be the original signature of the
party whose signature it reproduces and be binding upon such party.

SECTION 6.12. Time Periods. Unless otherwise specified in this Agreement, an
action required under this Agreement to be taken within a certain number of days
shall be taken within that number of calendar days (and not Business Days).

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto, being duly authorized, have executed and
delivered this Agreement on the date first above written.

 

PG&E CORPORATION, by   /s/ MARI BECKER   Name: Mari Becker   Title: Senior
Director & Treasurer

 

[Signature Page to Registration Rights Agreement]

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JUSTICE JOHN K. TROTTER (RET.), ACTING ON BEHALF OF THE PG&E FIRE VICTIM TRUST,
by   /s/ JOHN K. TROTTER   Name: Hon. John K. Trotter   Title: Trustee

 

[Signature Page to Registration Rights Agreement]

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ANNEX A

PLAN OF DISTRIBUTION

As of the date of this prospectus, we have not been advised by the selling
shareholders as to any plan of distribution. The selling shareholders, or their
pledgees, donees (including charitable organizations), transferees or other
successors-in-interest, may from time to time, sell any or all of the shares of
common stock offered by this prospectus either directly by such individual, or
through underwriters, dealers or agents or on any exchange on which the shares
of common stock may from time to time be traded, in the over-the-counter market,
or in independently negotiated transactions or otherwise. The selling
stockholder may use any one or more of the following methods when selling shares
of our common stock:

 

  •  

ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

  •  

block trades in which the broker-dealer will attempt to sell the shares of
common stock as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

 

  •  

purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

  •  

any exchange distribution in accordance with the rules of the applicable
exchange;

 

  •  

privately negotiated transactions;

 

  •  

settlement of short sales entered into after the effective date of the
registration statement of which the prospectus will form a part;

 

  •  

broker-dealers may agree with the selling shareholders to sell a specified
number of such shares of common stock at a stipulated price per share;

 

  •  

through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 

  •  

a combination of any such methods of sale; or

 

  •  

any other method permitted pursuant to applicable law.

The selling shareholders may also sell shares of common stock under Rule 144
under the Securities Act, if available, or otherwise as permitted pursuant to
applicable law, rather than under this prospectus.

Broker-dealers engaged by the selling shareholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of the shares of common stock under this prospectus,
from the purchaser) in amounts to be negotiated, but, except as set forth in a
supplement to the prospectus, in the case of any agency transaction not in
excess of a customary brokerage commission in compliance with Financial Industry
Regulatory Authority Rule 2121 (“Rule 2121”), and, in the case of a principal
transaction a markup or markdown in compliance with Rule 2121.

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In connection with sales of the shares of common stock under this prospectus or
interests therein, the selling shareholders may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage in
short sales of the shares of common stock in the course of hedging the positions
they assume. The selling shareholders may also sell the shares of common stock
short and deliver them to close their short positions, or loan or pledge the
shares of common stock to broker-dealers that in turn may sell them. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities that require the delivery to such broker-dealer or other
financial institution of shares of common stock offered by this prospectus,
which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such
transaction). Notwithstanding the foregoing, the selling shareholders have been
advised that they may not use the shares of common stock registered on the
registration statement of which this prospectus forms a part to cover short
sales of the shares of common stock made prior to the date the registration
statement has been declared effective by the SEC.

The selling shareholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them, and the
pledgees or secured parties will, upon foreclosure in the event of default, be
deemed to be selling shareholders. As and when the selling stockholder takes
such actions, the number of securities under this prospectus on behalf of such
selling stockholder will decrease. The selling shareholders may also transfer
and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.

The selling shareholders and any underwriters, dealers or agents that
participate in distribution of the securities may be deemed to be underwriters,
and any profit on sale of the securities by them and any discounts, commissions
or concessions received by any underwriter, dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.

There can be no assurances that the selling shareholders will sell any or all of
the securities offered under this prospectus.