$350,000,000
CALENERGY COMPANY, INC.
7.63% Senior Notes Due 2007
UNDERWRITING AGREEMENT
October 23, 1997
▇▇▇▇▇▇ BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several
Underwriters named in Schedule A,
c/▇ ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇")
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
CalEnergy Company, Inc., a Delaware corporation (the
"Company"), proposes to sell $350,000,000 aggregate principal amount of the
Company's 7.63% Senior Notes due October 15, 2007 (the "Notes"). The Notes are
to be issued pursuant to the Indenture dated as of October 15, 1997 (the "Base
Indenture"), as amended by the First Supplemental Indenture to be dated as of
October 28, 1997 (the "Supplemental Indenture" and, together with the Base
Indenture, the "Indenture"), between the Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company, as trustee (the "Trustee"). This is to confirm the agreement concerning
the purchase of the Notes from the Company by the Underwriters named in Schedule
A hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (No.
333-32821), including a form of prospectus relating to certain debt and
equity securities ("Registered Securities") to be issued from time to
time by the Company, has been filed with the Securities and Exchange
Commission ("Commission") and has been declared effective under the
Securities Act of 1933, as amended ("Act"), and the Indenture has been
qualified under the Trust Indenture Act of 1939 (the "Trust Indenture
Act"). The Company proposes to file with the Commission pursuant to
Rule 424 under the Act a form of prospectus supplement specifically
relating to the Notes. The registration statement, as amended at the
time of this Agreement, including all material incorporated by
reference therein, is hereinafter referred to as the "Registration
Statement," and the form of
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prospectus included in such Registration Statement, as supplemented by
the prospectus supplement specifically relating to the Notes, as first
filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act, including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed
in reliance on Rule 434 under the Act.
(b) On the effective date of the registration
statement relating to the Registered Securities, such registration
statement conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission ("Rules and
Regulations") thereunder and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
on the date of this Agreement, the Registration Statement conforms, and
at the time of filing of the Prospectus pursuant to Rule 424(b), the
Registration Statement and the Prospectus will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and none of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus, in the light of the
circumstances under which they were made) not misleading, except that
the foregoing does not apply to statements in or omissions from the
Registration Statement or the Prospectus based upon written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 8(e); and the Indenture conforms in all material respects to
the requirements of the Trust Indenture Act and the Rules and
Regulations of the Commission thereunder.
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they became effective
or were last amended or filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or
the Securities Exchange Act of 1934, as amended ("Exchange Act"), as
applicable, and the Rules and Regulations, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which they were made, and any further documents so filed and
incorporated by reference in the Registration Statement and the
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, shall conform in all material respects
to the requirements of the Act and the Exchange Act as applicable, and
the Rules and Regulations and shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made.
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(d) The Company, each Subsidiary (as defined below)
and each Joint Venture (as defined below) have been duly organized and
are validly existing and, if applicable, in good standing under the
laws of their respective jurisdictions of organization as a
corporation, limited liability company or partnership, as the case may
be, and have the power and authority to own, lease and operate their
property and conduct their businesses as described in the Prospectus;
the Company, the Subsidiaries and the Joint Ventures are duly qualified
to do business and are in good standing as foreign corporations or
foreign partnerships, as the case may be, in each jurisdiction,
domestic or foreign, in which such registration or qualification or
good standing is required (whether by reason of the ownership or
leasing of property, the conduct of business or otherwise), except
where the failure to so register or qualify or be in good standing is
not reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the Company,
the Subsidiaries and the Joint Ventures taken as a whole. For purposes
of this Agreement, (A) the term "Subsidiary" shall mean the entities
listed in Schedule B hereto ("Schedule B") and (B) the term "Joint
Venture" shall mean the entities listed in Schedule C hereto ("Schedule
C"), it being understood that such term means the general or limited
partnership or other joint venture entity and not the individual
general or limited partners or other joint venturers thereof. The
Subsidiaries listed in Schedule B are all the material direct and
indirect "subsidiaries" of the Company, as such term is defined in Rule
405 of the Rules and Regulations, and are all of the "Significant
Subsidiaries" of the Company, as such term is defined in Rule 1-02 of
Regulation S-X.
(e) All the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized and issued and
are fully-paid and nonassessable; and except as otherwise set forth in
Schedule B or disclosed in or contemplated by the Prospectus, all
outstanding shares of capital stock of each Subsidiary are owned
beneficially by the Company free and clear of any material claims,
liens, encumbrances and security interests. All of the partnership
interests in the Joint Ventures beneficially owned by the Company (as
reflected in Schedule C) have been duly and validly authorized and
issued and, except as otherwise set forth in Schedule C or disclosed in
or contemplated by the Prospectus, are owned beneficially by the
Company free and clear of any material claims, liens, encumbrances and
security interests.
(f) All the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
(g) The Notes have been duly authorized by the
Company, and, when duly executed, authenticated, issued and delivered
against payment therefor as contemplated hereby and by the Indenture,
shall be validly issued and outstanding, and shall constitute valid and
binding obligations on the part of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting
3
creditors' rights generally and by equitable principles generally; and
the Notes, when issued and delivered, shall conform in all material
respects to the descriptions thereof contained in the Prospectus.
(h) Each of the Base Indenture and the Supplemental
Indenture has been duly authorized, and when duly executed and
delivered by the Company, shall constitute a valid and binding
agreement on the part of the Company, enforceable against the Company
in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by equitable principles generally; and the Base
Indenture and the Supplemental Indenture, when executed and delivered,
shall conform in all material respects to the descriptions thereof
contained in the Prospectus.
(i) The use of the proceeds of the offering of the
Notes as described in the Prospectus has been duly authorized by all
necessary action on the part of the Company.
(j) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the offering of the Notes.
(k) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings which have not been
satisfied or waived between the Company and any person requiring the
Company to include securities of the Company owned or to be owned by
such person in the securities registered pursuant to the Registration
Statement.
(l) The execution, delivery and performance of this
Agreement, the Base Indenture and the Supplemental Indenture, and the
issuance and sale of the Notes and the use of the proceeds of the
offering of the Notes as described in the Prospectus will not (A)
conflict with the corporate charter or by-laws or partnership agreement
of the Company, any Subsidiary or any Joint Venture, (B) conflict with,
result in the creation or imposition of any lien, charge or other
encumbrance (other than as contemplated by the Indenture) upon any
asset of the Company, any Subsidiary or any Joint Venture pursuant to
the terms of, or constitute a breach of, or default under, any
agreement, indenture or other instrument to which the Company, any
Subsidiary or any Joint Venture is a party or by which the Company, any
Subsidiary or any Joint Venture is bound or to which any of the
properties of the Company, any Subsidiary or any Joint Venture is
subject, or (C) result in a violation of any statute, rule, regulation,
order, judgment or decree of any court or governmental agency, body or
authority having jurisdiction over the Company, any Subsidiary or any
Joint Venture or any of their properties where any such conflicts,
encumbrances, breaches, defaults or violations under
4
clauses (B) or (C), individually or in the aggregate, is reasonably
likely to (i) have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures taken as a whole or (ii) impair the
validity or enforceability of the Notes under the Act.
(m) Except (A) as to state or foreign securities laws
and (B) consents of third parties which have been obtained, no consent,
approval, authorization or order of, or filing or registration by the
Company, any Subsidiary or, to the best of the Company's knowledge, any
Joint Venture with, any court, governmental agency or third party is
required for the consummation of the transactions contemplated by this
Agreement and the Indenture in connection with the issuance and sale of
the Notes by the Company and the use of the proceeds of the offering of
the Notes as described in the Prospectus.
(n) The Company has full power and authority to
authorize, issue and sell the Notes as contemplated by this Agreement
and to execute, deliver and perform this Agreement, the Base Indenture,
the Supplemental Indenture and the Notes.
(o) This Agreement has been duly authorized, executed
and delivered by the Company.
(p) Except as disclosed in or contemplated by the
Prospectus, the Company, each Subsidiary and each Joint Venture holds,
as applicable, good and valid title to, or valid and enforceable
leasehold or contractual interests in, all real properties and all
other properties and assets owned or leased by or held under contract
by each of them that are material to the business of the Company, the
Subsidiaries and the Joint Ventures taken as a whole, and free from
liens, encumbrances and defects that would materially interfere with
the use made or to be made thereof by them.
(q) Except as disclosed in or contemplated by the
Prospectus, the Company, the Subsidiaries and the Joint Ventures carry,
or are covered by, insurance in such amounts and covering such risks as
is customary for similarly situated companies in the Company's, such
Subsidiaries' and such Joint Ventures' industries, respectively. Each
of the foregoing insurance policies is valid and in full force and
effect, and no event has occurred and is continuing that permits, or
after notice or lapse of time or both would permit, modifications or
terminations of the foregoing that, individually or in the aggregate,
is reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures taken as a whole.
(r) Except as disclosed in or contemplated by the
Prospectus, the Company, each Subsidiary and each Joint Venture (i) has
obtained each license, permit, certificate, franchise or other
governmental authorization which is material to the ownership of their
properties or to the conduct of their businesses as described in or
5
contemplated by the Prospectus and (ii) is in compliance with all terms
and conditions of such license, permit, certificate, franchise or other
governmental authorization, except (A) in either case where the failure
to do so is not reasonably likely to have, individually or in the
aggregate, a material adverse effect on the financial condition,
business or results of operations of the Company, the Subsidiaries and
the Joint Ventures taken as a whole, (B) permits, consents and
approvals that may be required for future drilling or operating
activities which are ordinarily deemed to be ministerial in nature and
which are anticipated to be obtained in the ordinary course and (C)
permits, consents and approvals for developmental or construction
activities which have not yet been obtained but which have been or will
be applied for in the course of development or construction and which
are anticipated to be obtained in the ordinary course.
(s) Except as disclosed in the Prospectus, there are
no legal or governmental actions, suits or proceedings before any
court, governmental agency, body or authority, domestic or foreign, now
pending or, to the knowledge of the Company, threatened against, or, to
the knowledge of the Company, involving, the Company, any Subsidiary or
any Joint Venture (i) of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Registration Statement or (ii) that, if determined adversely to the
Company, any Subsidiary or any Joint Venture, would be reasonably
likely to have, individually or in the aggregate, a material adverse
effect on the financial condition, business or results of operations of
the Company, the Subsidiaries and the Joint Ventures taken as a whole,
or on the ability of the Company to perform its obligations under this
Agreement or the Indenture, or which are otherwise material in the
context of the sale of the Notes.
(t) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
(u) The Company, the Subsidiaries and the Joint
Ventures are currently conducting their respective businesses as
described in the Prospectus.
(v) There are no contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required under the Act.
(w) There is no relationship, direct or indirect,
that exists between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company on the other hand, of a character required to be described in
the Registration Statement or Prospectus which is not described as
required under the Act.
(x) There is no labor problem or disturbance with the
persons employed by the Company, any Subsidiary or any Joint Venture
that exists or, to the
6
knowledge of the Company, that is threatened and that might reasonably
be expected to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures taken as a whole.
(y) Neither the Company nor any person who is a
member of a group which is under common control with the Company and
the Subsidiaries and the Joint Ventures, who together with the Company,
the Subsidiaries and the Joint Ventures is treated as a single employer
("ERISA Affiliate") within the meaning of Section 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended from time to time
(the "Code"), or Section 4001(b) of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA"), has
established, sponsored, maintained or had any obligation to contribute
to any employee benefit plans within the meaning of Section 3(3) of
ERISA which are subject to Title IV of ERISA or Section 412 of the
Code. Except where it could not reasonably be expected to result in a
material adverse effect on the financial condition, business or results
of operations of the Company, the Subsidiaries and the Joint Ventures
taken as a whole, (i) all employee benefit plans within the meaning of
Section 3(3) of ERISA established, sponsored or maintained for or on
behalf of the employees, officers or directors of the Company, the
Subsidiaries, the Joint Ventures or any ERISA Affiliate ("Employee
Benefit Plans") are in compliance with all applicable provisions of
ERISA and the Code and the regulations and published interpretations
thereunder and each such Employee Benefit Plan that is intended to be
qualified under Code Section 401(a) has been determined by the Internal
Revenue Service to be so qualified and (ii) no material liability or
obligation has been incurred or is reasonably expected to be incurred
by the Company, the Subsidiaries or the Joint Ventures or any ERISA
Affiliate with respect to any Employee Benefit Plan.
(z) None of the Company, any Subsidiary or any Joint
Venture (i) is in violation of its respective charter, by-laws or
partnership agreement, (ii) is in default, and no event exists and is
continuing that, with notice or lapse of time or both, would constitute
such a default, in the due performance and observance of any material
term contained in any lease, license, indenture, mortgage, deed of
trust, note, bank loan or other evidence of indebtedness or any other
agreement, understanding or instrument to which the Company, any
Subsidiary or any Joint Venture is a party or by which the Company, any
Subsidiary or any Joint Venture or any property of the Company, any
Subsidiary or any Joint Venture may be bound or affected, which
default, individually or in the aggregate, is reasonably likely to have
a material adverse effect on the financial condition, business or
results of operations of the Company, the Subsidiaries and the Joint
Ventures taken as a whole, or (iii) is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it
may be subject, which violation, individually or in the aggregate, is
reasonably likely to have a material adverse effect on the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures taken as a whole or would
materially interfere with the execution, delivery and performance of
this Agreement, the Indenture, the consummation of the transactions
contemplated herein or therein, the issuance and sale
7
of the Notes or the use of the proceeds of the offering of the Notes
as described in the Prospectus.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, hazardous wastes or hazardous substances, pollutants or
contaminants by the Company, any Subsidiary or any Joint Venture (or,
to the knowledge of the Company, any of their predecessors in interest)
at, upon or from any of the property now or previously owned or leased
by the Company, any Subsidiary or any Joint Venture in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which does not have, or would not
be reasonably likely to have, individually or in the aggregate with all
such violations and remedial actions, a material adverse effect on the
financial condition, business or results of operations of the Company,
the Subsidiaries and the Joint Ventures taken as a whole; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, solid
wastes, hazardous wastes or hazardous substances, pollutants or
contaminants due to or caused by the Company, any Subsidiary or any
Joint Venture or with respect to which the Company, any Subsidiary or
any Joint Venture has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which does not
have, or would not be reasonably likely to have, individually or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect
on the financial condition, business or results of operations of the
Company, the Subsidiaries and the Joint Ventures taken as a whole; and
the terms "hazardous wastes", "toxic wastes" and "hazardous substances"
shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(ab) None of the Company or any Subsidiary or any
Joint Venture is an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be
registered under Section 8 of the United States Investment Company Act
of 1940, as amended (the "1940 Act"), nor is it a closed-end investment
company required to be registered, but not registered, thereunder; and
each of the Company, each Subsidiary and each Joint Venture is not and,
after giving effect to the offering and sale of the Notes and the
application of the proceeds thereof as described in the Prospectus,
will not be an "investment company", or, to the best knowledge of the
Company after due inquiry, a company controlled by an "investment
company" within the meaning of the 1940 Act.
(ac) The Company, each Subsidiary and each Joint
Venture has filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof, or has filed
extensions in accordance with applicable law, and has paid all taxes
required to be paid through the date hereof thereon, except for such
failures to file
8
or pay that would not, individually or in the aggregate, be reasonably
likely to have a material adverse effect on the financial condition,
business or results of operations of the Company, the Subsidiaries and
the Joint Ventures taken as a whole, and no tax deficiency has been
determined adversely to the Company, any Subsidiary or any Joint
Venture that has had (nor does the Company have any knowledge of any
tax deficiency which, if determined adversely to the Company, any
Subsidiary or any Joint Venture would be reasonably likely to have) a
material adverse effect on the financial condition, business or results
of operations of the Company, the Subsidiaries and the Joint Ventures
taken as a whole.
(ad) The financial statements and the related notes
and schedules included or incorporated by reference in the Registration
Statement and Prospectus fairly present the financial position, the
results of operations and the cash flows of the Company and its
consolidated subsidiaries at the respective dates and for the
respective periods to which they apply; and such financial statements
and the related notes and schedules have been prepared in conformity
with United States generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified. The
historical information under the caption "Capitalization" in the
Prospectus is accurately described as of the date presented therein.
(ae) Since the date of the latest financial
statements included or incorporated by reference in the Prospectus (i)
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures taken as a whole, and (ii) except
as disclosed in or contemplated by the Prospectus, there have not been
any transactions entered into by the Company, the Subsidiaries or any
Joint Venture, other than those in the ordinary course of business,
which are material to the Company, the Subsidiaries and the Joint
Ventures taken as a whole; and, except as disclosed in the Prospectus,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(af) The pro forma financial information included in
the Registration Statement and the Prospectus presents fairly the
information shown therein, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
information, has been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(ag) The accountants who have certified certain
financial statements of the Company or of businesses acquired by the
Company, as applicable, and whose reports appear in the Registration
Statement and the Prospectus or are incorporated by reference therein,
are and were independent public accountants as required by the Act
9
and the Rules and Regulations during the periods covered by the
financial statements on which they reported which are contained or
incorporated by reference in the Registration Statement or the
Prospectus.
(ah) (i) Each of the operational electric generation
facilities ("Plants") owned in whole or in part, directly or indirectly
by (A) the Company, (B) the Subsidiaries or (C) the Joint Ventures
which is located in the United States is a "qualifying cogeneration
facility" or a "qualifying small power production facility" (either or
both of which are hereinafter referred to as a "QF"), as such terms are
defined under the Federal Power Act, as amended ("FPA"), and the
regulations thereunder, and has continuously been in compliance with
the requirements for being a QF since it commenced sales of
electricity; (ii) with respect to each Plant under development and
located in the United States, either (x) to the extent that the
Company, the Subsidiaries or the Joint Ventures plan to act as the
owner and/or operator of any one of the Plants under development by the
Company, the Subsidiaries or the Joint Ventures and located in the
United States (as currently configured or as currently anticipated to
be configured), that owner and/or operator satisfies or is currently
expected to satisfy current regulatory requirements for being an
"exempt wholesale generator" ("EWG"), as such term is defined under the
FPA, the Public Utility Holding Company Act of 1935, as amended
("PUHCA") and the regulations thereunder or (y) each of the Plants
under development by the Company, the Subsidiaries or the Joint
Ventures and located in the United States (as currently configured or
as currently anticipated to be configured) will be a QF and will be in
continuous compliance with the requirements for being a QF; (iii) the
owner or operator of each of the Plants under development by the
Company, the Subsidiaries or the Joint Ventures and located outside the
United States (as currently configured or as currently anticipated to
be configured) satisfies or is currently expected to satisfy current
regulatory requirements for being either (A) an EWG or (B) a "foreign
utility company," as such term is defined under PUHCA and the
regulations thereunder; (iv) none of the entities identified in clause
(A) or (B) of subparagraph (i) above owns or operates or will own or
operate any electric distribution facilities or any electric
transmission facilities in or outside of the United States other than
electric transmission facilities that have been or will be approved by
the Federal Energy Regulatory Commission as being part of a QF, or the
owner and/or operator of which will have qualified as EWG's or as
"foreign utility companies" as such terms are defined under the FPA,
PUHCA and the regulations thereunder; and (v) none of the entities
identified in clause (A), (B) or (C) of subparagraph (i) above is, or
is subject to regulation as, a "public utility holding company" or a
"subsidiary company" of a "public utility holding company," as those
terms are defined under PUHCA, or is subject to regulation under the
FPA, other than as contemplated by 18 C.F.R Section 292.601(c), or,
except as described in or contemplated by the Prospectus, subject to
regulation by any state law or foreign governmental law with respect to
rates or the financial or organizational regulation of electric
utilities.
10
2. Purchase of the Notes by the Underwriters.
On the basis of the representations and warranties contained
in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell $350,000,000 million aggregate principal amount of the Notes to
the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the principal amount of Notes set forth opposite
that Underwriter's name in Schedule 1 hereto. The price to be paid to the
Company for the Notes shall be 98.25% of the aggregate principal amount thereof.
The Company shall not be obligated to deliver any of the Notes to be delivered
on the Delivery Date, except upon payment for all the Notes to be purchased on
the Delivery Date (as hereinafter defined) as provided herein.
3. Offering of the Notes by the Underwriters.
Upon authorization by the Representatives of the release of
the Notes, the several Underwriters propose to offer the Notes for sale upon the
terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Notes. Delivery of and
payment for the Notes shall be made at the office of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M.,
New York City time, on the third full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the ▇▇▇▇▇▇ and the Company. This date and time are sometimes referred to
as the "Delivery Date." On the Delivery Date, the Company shall deliver or cause
to be delivered to the Representatives for the account of each Underwriter the
Notes, in the form of one or more permanent global notes in definitive form (the
"Global Notes") deposited with the Trustee as custodian for the Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC,
against payment to or upon the order of the Company of the purchase price by
certified or official bank check or checks payable in or wire transfer of
Federal (same-day) funds. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Notes shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the Delivery
Date. For the purpose of expediting the checking and packaging of the Global
Notes, the Company shall make the Global Notes available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (2) (or, if applicable
and if consented to by ▇▇▇▇▇▇, subparagraph (5)) of Rule 424(b) not
later than the second business day
11
following the execution and delivery of this Agreement. The Company
will advise ▇▇▇▇▇▇ promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Representatives promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect such amendment or supplementation
without the Representatives' prior consent, which consent shall not be
unreasonably withheld; and the Company will also advise the
Representatives promptly of the effectiveness of any amendment or
supplementation of the Registration Statement or the Prospectus and of
the institution by the Commission of any stop order proceedings in
respect of the Registration Statement and will use its reasonable best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Notes is
required, in the opinion of counsel for the Underwriters, to be
delivered under the Act in connection with sales by any Underwriter or
dealer, any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any such time to
amend the Prospectus to comply with the Act, the Company will promptly
notify the Representatives of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7.
(d) As soon as practicable, but not later than 16 months after
the date of this Agreement, the Company will make generally available
to its securityholders an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
later of (i) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of this Agreement and (ii) the date of the Company's most
recent Annual Report on Form 10-K filed with the Commission prior to
the date of this Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of
the Registration Statement (four of which will be signed and will
include all exhibits), each preliminary prospectus and preliminary
prospectus supplement relating to the Notes, and, so long as delivery
of a prospectus relating to the Notes is required to be delivered under
the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the
Representatives request. The Company will pay the expenses of printing
and distributing to the Underwriters all such documents.
12
(f) The Company will arrange for the qualifications of the
Notes for sale under the laws of such jurisdictions in the United
States as the Representatives designate and will continue such
qualifications in effect so long as required for the distribution,
provided that, in connection therewith the Company shall not, with
respect to any such jurisdiction, be required to qualify as a foreign
corporation, to file a general consent to service of process or to take
any other action that would subject it to service of process in suits
other than those arising out of the offering of the Notes or to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise subject.
(g) During the period of three years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
Underwriters, as soon as practicable, after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives as soon as available, a
copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to
stockholders.
(h) The Company will indemnify and hold harmless the
Underwriters against any documentary, stamp or similar issuance tax,
including any interest and penalties, on the issuance and sale of the
Notes and on the execution and delivery of this Agreement. All payments
to be made by the Company hereunder shall be made without withholding
or deduction for or on account of any present or future taxes, duties
or governmental charges whatsoever unless the Company is compelled by
law to deduct or withhold such taxes, duties or charges. In that event,
the Company shall pay such additional amounts as may be necessary in
order that the net amounts received after such withholding or deduction
shall equal the amounts that would have been received if no withholding
or deduction had been made.
(i) The Company shall apply the net proceeds from the sale of
the Notes as set forth in the Prospectus.
(j) No action has been or, prior to the completion of the
distribution of the Notes, will be taken by the Company in any
jurisdiction outside the United States that would permit a public
offering of the Notes, or possession or distribution of the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement issued in connection
with the offering of the Notes, or any other offering material, in any
country or jurisdiction where action for that purpose is required.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Notes and will
reimburse the Underwriters (if and to the extent necessary) for any travel
expenses of the Company's officers and employees and other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of the Notes ; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto;
13
(c) the costs of distributing any preliminary prospectus, preliminary prospectus
supplement, the Prospectus and any amendment or supplement thereto or any
document incorporated by reference therein, all as provided in this Agreement;
(d) the costs of producing and distributing this Agreement, the Base Indenture,
the Supplemental Indenture and any other related documents in connection with
the offering, purchase, sale and delivery of the Notes; (e) any rating agency
fees; and (f) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Notes which they may sell and the expenses of advertising
any offering of the Notes made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) On or prior to the date of this Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Deloitte & Touche LLP (and the independent
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial
data are included or incorporated by reference in the Prospectuses) in
agreed form.
All financial statements and schedules included in material
incorporated by reference into the Registration Statement and the
Prospectus shall be deemed included in the Registration Statement and
the Prospectuses for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to the Delivery Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change in the financial
condition, business or results of operations of the Company, the
Subsidiaries and the Joint Ventures, taken as a whole, which, in the
judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Notes; (ii) any downgrading in the rating
of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review
14
its rating of any debt securities or preferred stock of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency on the financial markets makes it
impracticable or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Notes.
(d) The Representatives shall have received an opinion, dated
the Delivery Date, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President and
General Counsel of the Company, to the effect that:
(i) Each of the Company, the Subsidiaries and the
Joint Ventures has been duly organized and is validly existing
and, if applicable, in good standing under the laws of its
respective jurisdiction of organization and each of the
Company, the Subsidiaries and the Joint Ventures has the power
and authority to own, lease and operate its respective
properties and to conduct its businesses as described in the
Prospectus;
(ii) Each of the Company, the Subsidiaries and the
Joint Ventures is duly registered or qualified to do business
and (to the extent applicable) is in good standing as a
foreign corporation, a foreign partnership or a foreign
limited liability company, as the case may be, in each
jurisdiction, domestic or foreign, in which such registration,
qualification or good standing is required (whether by reason
of the ownership or leasing of property, the conduct of its
business or otherwise), except where the failure to so
register or qualify or be in good standing is not reasonably
likely to have a material adverse effect on the financial
condition, business or results of operation of the Company,
the Subsidiaries and the Joint Ventures taken as a whole;
(iii) The Company has the authorized and outstanding
capitalization as set forth under the caption "Capitalization"
in the Prospectus; to the best knowledge of such counsel, all
the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully
paid and nonassessable; and to the best knowledge of such
counsel, except as otherwise set forth in Schedule B attached
hereto or disclosed in or contemplated by the Prospectus, all
outstanding shares of capital stock of each Subsidiary are
owned beneficially by the Company free and clear of any
material claims, liens, encum-
15
brances and security interests; and to the best knowledge of
such counsel, all of the partnership interests in the Joint
Ventures owned by the Company (as reflected in Schedule C
attached hereto) have been duly and validly authorized and
issued, and, except as otherwise disclosed in or contemplated
by the Prospectus, are owned beneficially by the Company free
and clear of any material claims, liens, encumbrances and
security interests;
(iv) Each of the Base Indenture and the Supplemental
Indenture has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency (involving, without
limitation, all laws relating to fraudulent transfers),
reorganization or other laws relating to or affecting
creditors' rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or
at law);
(v) The Notes have been validly authorized by the
Company, and, assuming due authorization by the Trustee, when
issued and delivered as contemplated by the Indenture upon
payment therefor as provided in this Agreement, will be
validly issued and outstanding, and will constitute valid and
binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in
accordance with their terms, except as enforcement may be
limited by bankruptcy, insolvency (involving, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other laws relating to or
affecting creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(vi) The statements in the Prospectus under the
captions "Description of the Notes" and "Description of Debt
Securities," insofar as they purport to summarize the
provisions of the Indenture and the Notes, fairly summarized
such provisions in all material respects.
(vii) To such counsel's knowledge, except as
otherwise disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any
person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission,
finder's fee or other like payment;
(viii) To such counsel's knowledge, there are no
contracts, agreements or understandings which have not been
satisfied or waived between the Company and any person
granting such person the right to require the Company to file
a registration statement under the Act with respect to any
securities of the Company
16
owned or to be owned by such person or to require the Company
to include any such securities in the securities registered
pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement
filed by the Company under the Act;
(ix) Except as disclosed in or contemplated by the
Prospectus, each of the Company, the Subsidiaries and the
Joint Ventures has good and valid title to, or valid and
enforceable leasehold or contractual interests in, all real
properties and all other properties and assets owned or leased
by each of them that are material to the business of each such
entity, in each case free from all liens, encumbrances, and
defects that would materially interfere with the use made or
to be made thereof by them;
(x) To such counsel's knowledge, there is no legal or
governmental action, suit or proceeding before any court,
governmental agency, body or authority, domestic or foreign,
now pending, threatened against, or involving, the Company,
any Subsidiary or any Joint Venture (i) of a character
required to be disclosed in the Registration Statement which
is not adequately disclosed in the Registration Statement or
(ii) that, if determined adversely to the Company, any
Subsidiary or any Joint Venture, is reasonably likely to have,
individually or in the aggregate, a material adverse effect on
the financial condition, business or results of operations of
the Company, the Subsidiaries and the Joint Ventures taken as
a whole or on the ability of the Company to perform its
obligations under this Agreement, the Indenture or the Notes;
(xi) To such counsel's knowledge, the Company, each
Subsidiary and each Joint Venture (i) has obtained each
license, permit, certificate, franchise or other governmental
authorization which is material to the ownership of their
properties or to the conduct of their businesses as described
in the Prospectuses and (ii) is in compliance with all terms
and conditions of such license, permit, certificate, franchise
or other governmental authorization, except (x) in either case
where the failure to do so is not reasonably likely to have,
individually or in the aggregate, a material adverse effect on
the financial condition, business or results of operations of
the Company, the Subsidiaries and the Joint Ventures taken as
a whole, (y) permits, consents and approvals that may be
required for future drilling or operating activities which are
ordinarily deemed to be ministerial in nature and which are
anticipated to be obtained in the ordinary course and (z)
permits, consents and approvals for developmental or
construction activities which have not yet been obtained but
which have been or will be applied for in the course of
development or construction and which are anticipated to be
obtained in the ordinary course;
(xii) The Company has all requisite corporate power
and authority to enter into this Agreement, the Base Indenture
and the Supplemental Indenture, to
17
issue the Notes and to consummate the transactions
contemplated by this Agreement, the Indenture and the Notes;
(xiii) There are no contracts or other documents
which are required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the Act or by the
Rules and Regulations which have not been described or filed
as exhibits to the Registration Statement or incorporated by
reference therein as permitted by the Rules and Regulations;
(xiv) This Agreement has been duly authorized,
executed and delivered by the Company;
(xv) (A) The execution, delivery and performance of
this Agreement, the Indenture, the issuance and sale of the
Notes and the use of proceeds of the Notes as designated in
the Prospectus do not and will not (i) conflict with the
corporate charter or by-laws or partnership agreement of the
Company, any Subsidiary or any Joint Venture, (ii) to the best
knowledge of such counsel (except as contemplated by the
Indenture), conflict with, result in the creation or
imposition of any lien, charge or other encumbrance upon any
asset of the Company, any Subsidiary or any Joint Venture
pursuant to the terms of, or constitute a breach of, or
default under, any agreement, indenture or other instrument to
which the Company, any Subsidiary or any Joint Venture is a
party or by which the Company, any Subsidiary or any Joint
Venture is bound or to which any of the properties of the
Company, any Subsidiary or any Joint Venture is subject, or
(iii) to the best knowledge of such counsel, result in a
violation of any statute, rule, regulation, order, judgment or
decree of any court or governmental agency, body or authority
having jurisdiction over the Company, any Subsidiary or any
Joint Venture or any of their properties where any such
conflict, encumbrance, breach, default or violation under
clauses (ii) or (iii), individually or in the aggregate, is
reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the
Company, its Subsidiaries and the Joint Ventures taken as a
whole; (B) to the knowledge of such counsel, except for (i)
the registration of the Notes under the Act and the
qualification of the Indenture under the Trust Indenture Act
and (ii) such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Notes, no
consent, authorization or order of, or filing or registration
by the Company, any Subsidiary or any Joint Venture with, any
court, governmental agency or third party is required in
connection with the execution, delivery and performance by the
Company of this Agreement, the Indenture, the consummation of
the transactions contemplated herein and therein, and the
issuance, distribution and sale of the Notes as contemplated
herein and therein, the failure to obtain which, individually
or in the aggregate, is reasonably likely to have a material
adverse effect on the financial condition, business or results
of operations of the
18
Company, the Subsidiaries and the Joint Ventures taken as a
whole, or on the Notes or the ability of the Company to
perform its obligations under this Agreement, the Indenture
and the Notes and (C) the Company has full corporate power and
authority to authorize, issue and sell the Notes as
contemplated by this Agreement and the Indenture;
(xvi) The Company is not required to be registered
under the Investment Company Act of 1940, as amended;
(xvii) The documents incorporated by reference in the
Prospectus and any further amendments or supplements to any
such incorporated document made by the Company prior to the
Delivery Date (other than the financial statements, related
schedules and other financial and statistical information
contained therein or omitted therefrom as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be, appear
on their face to have been appropriately responsive in all
material respects to the applicable requirements of the Act or
the Exchange Act, as the case may be, and the Rules and
Regulations of the Commission thereunder; and
(e) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel to the
Company, addressed to the Underwriters and dated the Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly organized and is
validly existing and in good standing under the laws of its
jurisdiction of organization and the Company has the corporate
power and authority to own, lease and operate its properties
and to conduct its businesses as described in the Prospectus;
(ii) Such counsel has been advised by the Commission
that the Registration Statement has been declared effective
under the Act; the Prospectus has been filed with the
Commission pursuant to the appropriate subparagraph of Rule
424(b) of the Rules and Regulations; to the best knowledge of
such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission;
(iii) The Registration Statement, as of its effective
date, the Registration Statement and the Prospectus, as of the
date of this Agreement, and any further amendments or
supplements thereto made by the Company prior to the Delivery
Date (in each case, other than the financial statements,
related schedules, other financial and statistical information
contained therein or omitted therefrom as to which such
counsel need express no opinion) as of their effective dates,
appear on their face to have been appropriately responsive in
all material respects to the
19
applicable requirements of the Act, the Exchange Act and the
Rules and Regulations;
(iv) Each of the Base Indenture and the Supplemental
Indenture has been duly and validly authorized, executed and
delivered by the Company and constitutes the valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization or other similar laws affecting creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law); and the Indenture conforms as to legal matters in all
material respects to the description thereof contained in the
Prospectus;
(v) The Notes have been validly authorized by the
Company, and, upon payment therefor as provided in this
Agreement, will be validly issued and outstanding, and will
constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization or other similar laws
relating to or affecting creditors' rights generally and
except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description
thereof contained in the Prospectus;
(vi) To such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Act or by the Rules and
Regulations which have not been described or filed as exhibits
to the Registration Statement or incorporated by reference
therein as permitted by the Rules and Regulations;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company; and
(viii) No consent, authorization, order of, or filing
or registration by the Company with, any United States
governmental authority or body having jurisdiction over the
Company is necessary or required for the performance by the
Company of its obligations under this Agreement, the Indenture
or the Notes or in connection with the issuance and sale of
the Notes hereunder or thereunder, except as may be required
under applicable state or foreign securities laws or blue sky
laws in connection with the purchase and distribution of the
Notes.
20
(f) In the rendering of the opinions described in Section 7(d)
and Section 7(e) above, such counsel may (i) state that their opinion
is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware and (ii) rely, to the extent
they deem proper, in respect of matters of fact, upon certificates and
representations of officers of the Company, the Subsidiaries or the
Joint Ventures and public officials. Such counsel shall also have
furnished to the Representatives a written statement, addressed to the
Underwriters and dated the Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that (i)
such counsel (in the case of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, such counsel may
state that they have acted as special counsel to the Company for
purposes of the offering of the Notes) have participated in conferences
with representatives of the Company, some of which have been attended
by the Underwriters and their counsel, at which conferences the
contents of the Registration Statement, the Prospectus, each amendment
thereof and supplement thereto and related matters were discussed,
although such counsel has not independently checked or verified and is
not passing upon and assumes no responsibility for the factual
accuracy, completeness or fairness of the statements (except to the
extent set forth in the opinion of such counsel) contained in the
Registration Statement, the Prospectus, any amendment thereof or
supplement thereto, and (ii) based on the foregoing, no facts have come
to the attention of such counsel which cause them to believe that
(except for the financial statements, related schedules and other
financial and statistical information contained therein or omitted
therefrom as to all of which such counsel need not express any belief)
(I) the Registration Statement (other than the documents incorporated
by reference therein), as of its effective date and as of the date of
this Agreement, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or
that the Prospectus, as amended and supplemented as of the date of this
Agreement or the Delivery Date, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or
(II), in the case of the General Counsel of the Company, any document
incorporated by reference in the Prospectus or any further amendment or
supplement to such incorporated document made by the Company prior to
the Delivery Date when they became effective or were filed with the
Commission, as the case may be, contained, in the case of a
registration statement that became effective under the Act, any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein, in the light of the circumstances under
which they were made, or necessary in order to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(g) The Representatives shall have received from Skadden,
Arps, Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, such
opinion or opinions, dated the Delivery
21
Date, with respect to the issuance and sale of the Notes, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(h) The Representatives shall have received a certificate,
dated the Delivery Date, of the President or any Vice-President and a
principal financial or accounting officer of the Company in which such
officers shall state that, to the best of their knowledge after
reasonable investigation, the representations and warranties of the
Company in this Agreement are true and correct in all material
respects, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Delivery Date, that no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the
most recent financial statements included or incorporated by reference
in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the financial condition, business or results of operations of the
Company, the Subsidiaries and the Joint Ventures taken as a whole
except as set forth in or contemplated by the Prospectuses or as
described in such certificate.
(i) The Representatives shall have received letters, dated the
Delivery Date, of Deloitte & Touche LLP and such other independent
accountants for subsidiaries and acquired businesses which meet the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to the Delivery Date for the purposes of this
subsection.
(j) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus (i) except as
disclosed in the Prospectus, there shall have been no material adverse
change, or a development which is reasonably likely to lead to a
material adverse change, in the financial condition, business or
results of operations of the Company, the Subsidiaries and the Joint
Ventures taken as a whole and (ii) except as disclosed in the
Prospectus, there shall not have been any transactions entered into by
the Company, the Subsidiaries or any Joint Venture, other than those in
the ordinary course of business, which are material and adverse to the
Company, the Subsidiaries and the Joint Ventures taken as a whole, and
which, in the judgment of the Representatives, make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Notes on the terms and in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed in compliance with
the provisions hereof only if they are in the form and substance
reasonably satisfactorily to counsel for the Underwriters.
22
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Notes), to which that Underwriter,
officer, employee or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, or in any
amendment or supplement thereto, or in any related preliminary prospectus or
preliminary prospectus supplement, (ii) the omission or alleged omission to
state in the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, any material fact required to be stated therein or
necessary to make the statements therein (with respect to any prospectus or
prospectus supplement, in light of the circumstances under which they were made)
not misleading, and shall reimburse each Underwriter and each officer, employee
or controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus or preliminary prospectus supplement, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein; provided, that, with respect to any untrue statement or
omission in the Preliminary Prospectus dated September 22, 1997, as supplemented
by the Preliminary Prospectus Supplement dated October 8, 1997 (as supplemented,
the "Preliminary Prospectus"), this indemnity agreement shall not inure to the
benefit of any Underwriter, or its officers, employees or controlling persons,
on account of any loss, claim, damage, liability or action arising from the sale
of any Notes to any person by that Underwriter if that Underwriter failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such Preliminary Prospectus was corrected
in the Prospectus and the Prospectus was made available to the Underwriters
prior to the sale of the Notes. For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated by reference therein, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference in the Preliminary Prospectus or Prospectus to any
person other than a person to whom such Underwriter had delivered such
incorporated document or documents in response to a written request therefor.
23
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Act, from and against any loss claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, under the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement or (ii) the
omission or alleged omission to state in the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any related
preliminary prospectus or preliminary prospectus supplement, any material fact
required to be stated therein or necessary to make the statements therein (with
respect to any prospectus or prospectus supplement, in the light of the
circumstances under which they were made) not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of such Underwriter specifically for inclusion therein, and shall reimburse the
Company and any such director, officer or controlling person for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if the employment of such counsel shall
have been authorized in writing by
24
the Company in connection with the defense of such action or, if in the written
opinion of counsel to either the Company or the Representatives, representation
of both parties by the same counsel would be inappropriate due to actual or
likely conflicts of interest between the Representatives and those Underwriters,
officers, employees, directors and controlling persons and in that event the
fees and expenses of such separate counsel shall be paid by the Company. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes purchased under this Agreement (before deducting expenses)
received by the Company, bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes purchased
under this Agreement. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party
25
as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the amount of Notes underwritten by it and
distributed to the public was offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 11(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Notes by the Underwriters set forth on the cover page concerning the terms of
the offering by the Underwriters and the information relating to over-allotments
and stabilizing in paragraphs 7, 8, 9 and 10 in the section "Underwriting" in
the Prospectus constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on the Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Notes which the
defaulting Underwriter agreed but failed to purchase on the Delivery Date in the
respective proportions which the principal amount of the Notes set opposite the
name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to
the aggregate principal amount of the Notes set opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Notes on the Delivery Date if the aggregate principal amount
of the Notes which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 10% of the aggregate principal amount of the
Notes to be purchased on the Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the aggregate
principal amount of the Notes which it agreed to purchase on the Delivery Date
pursuant to the terms of Section 3. If the foregoing maximums are exceeded, the
remaining non-defaulting Underwriters, or those other underwriters satisfactory
to the Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, the
aggregate principal amount of the Notes to be purchased on the Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the principal amount of Notes which the
defaulting Underwriter or Underwriters agreed but
26
failed to purchase within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 9, purchases Notes which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Notes
of a defaulting or withdrawing Underwriter, either the Representative or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 7(c) or 7(j), shall have occurred or if
the Underwriters shall decline to purchase the Notes for any reason permitted
under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company
shall fail to tender the Notes for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any material
agreement on its part to be performed, or because any other material condition
of the Underwriters' obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by the Underwriters in connection with this Agreement and
the proposed purchase of the Notes in excess of $250,000, and upon demand the
Company shall pay the full amount thereof to the Representatives; provided,
however, that in no event shall such amount exceed $100,000. If this Agreement
is terminated pursuant to Section 9 by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax: 212-526-
6588), with a copy, in the case of any notice pursuant to
Section 8(c), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
27
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
General Counsel (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by ▇▇▇▇▇▇ on behalf of the
Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Act and (B) the indemnity agreement of the Underwriters contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement and
any person controlling the Company within the meaning of Section 15 of the Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Term "Business Day". For purposes of
this Agreement, "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "Specified Courts"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such
28
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. The parties further agree that service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum.
17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
29
If the foregoing correctly sets forth the agreement between
the Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
CALENERGY COMPANY, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
For themselves and as Representatives
of the several Underwriters named
in Schedule A hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_______________________
Authorized Representative
30
SCHEDULE A
Principal
Amount of
Underwriters Notes
------------ ---------
▇▇▇▇▇▇ Brothers Inc........................................... $119,000,000
Credit Suisse First Boston Corporation $178,500,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated..................................... $ 52,500,000
-----------
Total......................................................... $350,000,000
SCHEDULE B
Subsidiaries
Coso Funding Corp.+
Incorporated in Delaware
Coso Hotsprings Intermountain Power, Inc. +
Incorporated in Delaware
China Lake Operating Company +
Incorporated in Delaware
Coso Technology Corporation +
Incorporated in Delaware
China Lake Geothermal Management Company +
Incorporated in Delaware
China Lake Plant Services, Inc. +
Incorporated in California
Coso Hotsprings Overland Power, Inc.+
Incorporated in Delaware
CE Geothermal, Inc.
Incorporated in Delaware
Western States Geothermal Company
Incorporated in Delaware
Intermountain Geothermal Company
Incorporated in Delaware
CalEnergy Development Corporation
Incorporated in Delaware
California Energy Yuma Corporation
Incorporated in Utah
California Energy General Corporation
Incorporated in Delaware
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Rose Valley Properties, Inc.
Incorporated in Delaware
CalEnergy Minerals, Inc.
Incorporated in Delaware
CBE Engineering Co.
Incorporated in California
CE Exploration Company
Incorporated in Delaware
▇▇ ▇▇▇▇▇▇▇▇, Inc.
Incorporated in Delaware
CE International Investments Inc.
Incorporated in Delaware
CE Philippines Ltd.
Incorporated in Bermuda
CE Mahanagdong Ltd.
Incorporated in Bermuda
Ormoc Cebu Ltd.
Incorporated in Bermuda
CE Cebu Geothermal Power Company, Inc.+
Incorporated in the Philippines
CE Indonesia Ltd.+
Incorporated in Bermuda
CE Casecnan Ltd.
Incorporated in Bermuda
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
CE Singapore Ltd.
Incorporated in Bermuda
CalEnergy International Ltd.
Incorporated in Bermuda
CE Bali, Ltd.
Incorporated in Bermuda
CE Casecnan Water and Energy Company, Inc.+
Incorporated in the Philippines
Capital Stock: Owned 35% by CE Casecnan Ltd.,
35% by Kiewit Energy International (Bermuda) Ltd.,
15% by La Prairie Group Contractors (International) Ltd and 15% by San
▇▇▇▇▇▇▇ ▇▇▇▇ Builders & Developers Group, Inc.
Magma Power Company+
Incorporated in Nevada
CalEnergy Operating Company+
Incorporated in Delaware
Salton Sea Power Company+
Incorporated in Nevada
Vulcan Power Company+
Incorporated in Nevada
Imperial Magma+
Incorporated in Nevada
Magma Land Company I+
Incorporated in Nevada
Desert Valley Company+
Incorporated in California
Fish Lake Power Company+
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Incorporated in Delaware
Magma Netherlands B.V.+
Formed in the Netherlands
Tongonan Power Investment, Inc.+
Incorporated in the Philippines
Salton Sea Funding Corporation +
Incorporated in Delaware
Salton Sea Royalty Company+
Incorporated in Delaware
CE Asia Ltd.+
Incorporated In Bermuda
American Pacific Finance Company
Incorporated in Delaware
CalEnergy International Services, Inc.
Incorporated in Delaware
CalEnergy Imperial Valley Company, Inc.
Incorporated in Delaware
California Energy Retail Company, Inc.
Incorporated in Delaware
CE Humboldt, Inc.
Incorporated in Delaware
CE Ijen Ltd.
Incorporated in Bermuda
Magma Generating Company I
Incorporated in Nevada
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Magma Generating Company II
Incorporated in Nevada
Peak Power Corporation
Incorporated in California
CE Luzon Geothermal Power Company, Inc.+ Incorporated in the Philippines
Capital Stock: Owned 50% by CE Mahanagdong Ltd.; 50% by Kiewit Energy
International (Bermuda) Ltd.; an industrial company has the right to
acquire 10% of the equity - 5% from CE Mahanagdong Ltd. and 5% from Kiewit
Energy International (Bermuda) Ltd.
Himpurna California Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 47% by CE Indonesia Ltd.; 47% by Kiewit Energy
International (Bermuda) Ltd., and 6% by P.T. Himpurna Enersindo Abadi;
("Himpurna"). Himpurna has assigned the right to certain preferred
dividends representing a 4% interest in Himpurna California Energy Ltd.,
under the Joint Operating Contract, Pertamina has certain rights to acquire
up to a 25% interest in the Joint Operating Contract, but not under the
Energy Sales Contract
Patuha Power, Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 44% by CE Singapore Ltd., and 44% by Kiewit Energy
International (Bermuda) Ltd.; and 12% by Mahaka Energy; under the Joint
Operating Contract, Pertamina has certain rights to acquire up to a 25%
interest in the Joint Operating Contract, but not under the Energy Sales
Agreement
Bali Energy Ltd.+
Incorporated in Bermuda
Capital Stock: Owned 50% by CE Bali Ltd. and
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
50% by Kiewit Energy International (Bermuda) Ltd.
P.T. Pandanwangi Sekartji has the right to acquire
up to 40% of the equity in Bali Energy Ltd.
Norming Investments BV+
Incorporated in the Netherlands
BN Geothermal Inc.+
Incorporated in Delaware
Conejo Energy Company+
Incorporated in California
Niguel Energy Company+
Incorporated in California
San ▇▇▇▇▇▇ Energy Company+
Incorporated in California
CE/FS Holding Company, Inc.
Incorporated in Delaware
Falcon Seaboard Power Corporation
Incorporated in Texas
Falcon Seaboard Resources, Inc.
Incorporated in Texas
Falcon Seaboard Energy Corporation
Incorporated in Texas
Falcon Seaboard Gas Company
Incorporated in Texas
Falcon Seaboard Oil Company
Incorporated in Texas
Falcon Seaboard Pipeline Corporation
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Incorporated in Texas
Big Spring Pipeline Company
Incorporated in Texas
Falcon Power Operating Company
Incorporated in Texas
Power Resources, Inc.+
Incorporated in Texas
North Country Gas Pipeline Corporation + Incorporated in New York Owned by
Saranac Power Partners, L.P.
Saranac Energy Company, Inc.+
Incorporated in Delaware
SECI Holdings, Inc.+
Incorporated in Delaware
Northern Consolidated Power, Inc. +
Incorporated in Delaware
NorCon Holdings, Inc.
Incorporated in Delaware
CE Electric, Inc.
Incorporated in Delaware
CE Power, Inc.
Incorporated in Delaware
CE Electric UK plc +
Incorporated in England
Capital Stock: Owned by CE Electric UK Holdings
American Pacific Finance Company II +
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Incorporated in Delaware
Capital Stock: Owned 50% by CalEnergy Company, Inc. and
50% by Kiewit Energy Company
CE Indonesia Geothermal, Inc.
Incorporated in Delaware
Slupo I B.V.+
Incorporated in Netherlands
Owned 50% by CE Asia Ltd. and 50% by Kiewit
Energy International (Bermuda) Limited
CE Indonesia Funding Corp. +
Incorporated in Delaware
Owned 50% by Himpurna California Energy Ltd.
and 50% by Patuha Power, Ltd.
▇▇▇▇▇▇▇/CBE Indonesia L.L.C.
Organized in Nebraska
Owned 60% ▇▇▇▇▇▇▇ Industrial Corporation and 40% CBE Engineering Co.
Northern Electric plc+ Incorporated in England and Wales Owned by CE
Electric UK plc.
Northern Electric Generation (NPL) Limited + Incorporated in England and
Wales Owned by Northern Electric plc.
Northern Electric Supply Limited + Incorporated in England and Wales Owned
by Northern Electric plc.
Northern Electric Share Scheme Trustee Limited +
Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Transport Finance Limited +
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Retail Limited + Incorporated in England and Wales Owned
by Northern Electric plc.
Northern Electric Properties Limited + Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Distribution Limited
Incorporated in England and Wales
Owned by Northern Electric plc.
Gas UK Limited+ Incorporated in England and Wales Owned by Northern
Electric plc.
Northern Electric (Overseas Holdings) Limited +
Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Generation (CPS) Limited + Incorporated in England and
Wales Owned indirectly by Northern Electric plc.
Kings Road Developments Limited+
Incorporated in England and Wales
Owned 48% by Northern Electric plc., 26% by ▇▇▇▇▇▇▇ Homes and 26% by
Bellway Homes.
Ryhope Road Developments Ltd. +
Incorporated in England and Wales
Owned 49% by Northern Electric Properties Ltd. and
51% by Bowey Group Limited
Stamfordham Road Developments Ltd.+
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Incorporated in England and Wales
Owned 49% by Northern Electric Properties Ltd. and
51% by ▇▇▇▇▇▇▇ Commercial Development Ltd.
Northern Electric Generation (TPL) Limited + Incorporated in England and
Wales Owned indirectly by Northern Electric plc.
Northern Electric Generation Limited + Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Insurance Services Limited + Incorporated in England and
Wales Owned indirectly by Northern Electric plc.
Northern Metering Services Limited + Incorporated in Isle of Man Owned
indirectly by Northern Electric plc.
CalEnergy Gas (UK) Limited + Incorporated in England and Wales Owned
indirectly by Northern Electric plc.
Northern Electric Generation (Peaking) Limited + Incorporated in England
and Wales Owned indirectly by Northern Electric plc.
Northern Electric Training Limited + Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Transport Limited + Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Information Systems Limited +
Incorporated in England and Wales
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Owned by Northern Electric plc.
Northern Utility Services Limited + Incorporated in England and Wales Owned
by Northern Electric plc.
Viking Power Ltd.+
Incorporated in England and Wales
Capital Stock: Owned 50% by Northern Electric Generation Limited
and 50% by Rolls-Royce Power Ventures Limted
Northern Electric Finance plc. +
Incorporated in England and Wales
Owned indirectly by Northern Electric plc.
Northgas Limited + Incorporated in England and Wales Owned by Northern
Electric plc.
Northern Tracing & Collection Services Limited +
Incorporated in England and Wales
Owned by Northern Electric plc.
Northern Electric Telecom Limited + Incorporated in England and Wales Owned
by Northern Electric plc.
CE Electric UK Holdings +
Incorporated in England
Capital Stock: Owned 35% by CE Power, Inc., 35% by CE Electric Inc. and
30% by Kiewit Energy UK, Inc.
CalEnergy Gas (Polska) *Polish limited liability company Owned indirectly
by Northern Electric plc.
CalEnergy Capital Trust I
Formed under the laws of Delaware
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
CalEnergy Capital Trust II
Formed under the laws of Delaware
CalEnergy Capital Trust III
Formed under the laws of Delaware
CalEnergy Capital Trust IV
Formed under the laws of Delaware
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
SCHEDULE C
Joint Ventures
Coso Energy Developers (CED)+
Formed in California
General Partnership: 48% CHIP; 52% Caithness Coso
Holdings, L.P.
Coso Finance Partners+
Formed in California
General Partnership: 46.3% owned by CLOC; 53.7%
owned by ESCA I, L.P.
Coso Power Developers (CPD)+
Formed in California
General Partnership: 50% owned by CTC; 50% by
Caithness Navy II
Coso Transmission Line Partners+
Formed in California
General Partnership: Owned 50% by CED; 50% by CPD
Vulcan/BN Geothermal Power Company+
Formed in Nevada
Partnership Interests: Vulcan Power Company 50%
General Partner; BN Geothermal, Inc. 50% General
Partner
Del Ranch, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner; Conejo
Energy Company 10% Limited Partner and 40% General Partner
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
▇▇▇▇▇▇, ▇.▇.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner; Niguel
Energy Company 10% Limited Partner
and 40% General Partner
Leathers, L.P.+
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; CalEnergy Operating Company 40% General Partner;
San ▇▇▇▇▇▇ Energy Company 10% Limited Partner and 40% General Partner
Salton Sea Brine Processing L.P.+
Limited Partnership Formed in California
Salton Sea Power Generation L.P.+
Limited Partnership Formed in California
Visayas Geothermal Power Company+
Partnership Formed in the Philippines
Yuma Cogeneration Associates+
Formed in Utah
Alto Peak Power Company
Formed in the Philippines
China Lake Joint Venture
Formed in California
Owned 50% by CalEnergy Company and 50% by Caithness Geothermal 1980 Ltd.
Coso Finance Partners II
Formed in California
Owned 50% by China Lake Geothermal Management Co., an affiliate of
Calenergy Company, Inc. and 50% by ESCA II, L.P.
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.
Coso Land Company
Formed in California
Owned 50% by CalEnergy Company and 50% by Caithness Geothermal 1980 Ltd.
▇▇▇▇▇▇▇/CBE L.P.
Limited partnership formed in Nebraska
Partnership Interests: 20% CBE Engineering Co. and 80% ▇▇▇▇▇▇▇ Industrial
Corporation
Saranac Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Saranac Energy Company, Inc. and 20%
affiliates of Tomen Power Corporation
NorCon Power Partners, L.P.+
Limited partnership formed in Delaware
Partnership Interests: 80% Northern Consolidated Power, Inc. and 20%
affiliates of Tomen Power Corporation
--------------------------
+ Indicates stock or partnership interests that are and at the Closing Date will
continue to be pledged, subject to a purchase agreement, or otherwise encumbered
and subject to foreclosure or other exercise of remedies.