EXHIBIT 4.5A
NEW MEXICO UTILITIES, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
_______________
BOND PURCHASE AGREEMENT
$4,000,000
FIRST MORTGAGE BONDS, SERIES B 7.64%, DUE NOVEMBER 7, 2006
_______________
As of November 8, 1996
Ameritas Life Insurance Corp.
5900 "O" Street
Lincoln, Nebraska 68510-6970
and
Woodmen Accident and Life Company
▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
New Mexico Utilities, Inc. (the "Company"), a New Mexico corporation,
hereby agrees with you as follows:
SECTION 1. PURCHASE AND SALE OF BONDS
1.1 ISSUE OF BONDS.
The Company has authorized the issue of Four Million Dollars ($4,000,000) in
aggregate principal amount of its First Mortgage Bonds, Series B 7.64%, Due
November 7, 2006 (herein called the "Bonds"). The Bonds will be issued under
and pursuant to the Second Amendment and Supplement to Indenture of Mortgage
dated as of February 14, 1992 (the "Second Supplemental Indenture") dated as of
October 21, 1996, between the Company and Sunwest Bank of Albuquerque, National
Association, as trustee (the "Trustee"). The Second Supplemental Indenture
modifies
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and amends that certain Indenture of Mortgage, dated as of February 14, 1992
(the "Original Indenture"), between the Company and the Trustee (as amended by
the First Supplement to Indenture of Mortgage dated as of February 14, 1992 (the
"First Supplemental Indenture"), dated as of May 15, 1992, between the Company
and the Trustee, and as may be further amended from time to time, the
"Indenture"). The Bonds will be secured pursuant to and entitled to all of the
benefits of the Indenture.
Each Bond:
(a)
will be in the amount of One Thousand Dollars ($1,000) or an integral multiple
thereof;
(b)
will bear interest on the unpaid principal balance thereof from the date of the
Bond at the rate of seven and sixty-four one-hundredths percent (7.64%) per
annum, payable semiannually on the tenth (10th) day of each May and
November in each year commencing on the first Interest Payment Date next
succeeding the date of such Bond until the principal amount thereof will be
due and payable, and thereafter will bear interest at a rate equal to the
lesser of (i) the highest rate allowed by applicable law or (ii) eight and
sixty-four one-hundredths percent (8.64%) per annum;
(c)
will mature on November 7, 2006; and
(d)
will be in the form of Bond set forth in Exhibit A to this Agreement.
1.2 THE CLOSING.
(a) PURCHASE AND SALE OF BONDS.
The Company hereby agrees to sell to each of you and, subject to the terms and
conditions set forth herein, you each hereby agree to purchase from the
Company, in accordance with the provisions of this Agreement, Bonds in the
principal amount specified opposite your name on Annex 1 hereto, at a
purchase price of one hundred percent (100%) of the principal amount
thereof. Each sale shall be a separate sale by the Company to a Purchaser
identified and in the principal amount of the Bonds identified to such
Purchaser on Annex 1. However, each Purchaser and the Company shall be
obligated to close the sales provided for in this Agreement only if both
such sales close.
(b) THE CLOSING.
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The closing (the "Closing") of your purchase will be held at 8:30 a.m., Los
Angeles, California Time, on November 8, 1996 (the "Closing Date") at the
office of the Company's counsel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. At the Closing, the
Company will deliver to each of you one or more Bonds (as set forth
opposite your respective name on Annex 1 to this Agreement), in the
aggregate principal amount of your respective purchase, dated the Closing
Date and payable to you or payable as indicated on Annex 1 to this
Agreement, against payment by federal funds wire transfer in immediately
available funds of the purchase price thereof, as directed by the Company
on Annex 2 to this Agreement.
1.3 CERTAIN PURCHASER REPRESENTATIONS.
(a) PURCHASE FOR INVESTMENT.
Each of you severally and not jointly represents to the Company that you are
purchasing the Bonds listed on Annex 1 to this Agreement opposite your
respective name for your respective own account for investment and with no
present intention of distributing or reselling the Bonds or any part
thereof, but without prejudice, however, to your respective rights at all
times to sell or otherwise dispose of all or any part of the Bonds under a
registration statement filed under the Securities Act, or in a transaction
exempt from the registration requirements of such Act, and to have control
of the disposition of all of your respective assets. It is understood
that, in making the representations set out in Section 2.9(a), Section 2.11
and Section 2.16 of this Agreement, the Company is relying, to the extent
applicable, upon your respective representations as aforesaid.
(b) ERISA.
Each of you further severally and not jointly represents that the source of
funds (the "Source") to be used by you to pay the purchase price of the
Bonds to be purchased by you hereunder is an insurance company general
account as such term is used in PTCE 95-60 issued by the United States
Department of Labor and that there is no employee benefit plan (treating as
a single plan all plans maintained by the same employer or employee
organization, or any affiliate thereof (as defined in Section V(a)(1) of
PTCE 95-60)) with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan exceeds ten percent (10%) of the total reserves and liabilities of
such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statements filed with your state
of domicile and as determined in accordance with Section I(a) of PTCE 95-
60.
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Each of you further severally and not jointly covenant that you shall
effect no transfer of the Bonds which would cause the foregoing
representation, if made by the transferee of the Bonds immediately
following such transfer, to be inaccurate or untrue. The foregoing
covenant includes any transfer from a general account to a separate
account.
(c) SURRENDER FOR REISSUE UPON TRANSFER.
Each Purchaser severally and not jointly represents and covenants that such
Purchaser shall not sell, transfer or otherwise dispose of the Bonds unless
prior to delivery thereof such Purchaser shall present such Bonds to the
Trustee for notation thereon of the portion of the principal thereof
redeemed or shall surrender such Bonds to the Trustee in exchange for a new
Bond or Bonds for the unredeemed balance of the principal of the
surrendered bond or bonds. It is intended that the provisions of this
subsection shall constitute the written agreement of the Company and each
Purchaser provided for in clause (i) of Section 5.07 of the Original
Indenture and that the Trustee may rely upon this subsection in connection
with any partial redemption of the Bonds.
1.4 FAILURE TO DELIVER; FAILURE OF CONDITIONS.
If at the Closing the Company fails to tender to you or either of you the Bonds
to be purchased by you thereat, or if any condition specified in Section 3 of
this Agreement has not been fulfilled, each of you may thereupon elect to be
relieved of all further obligations under this Agreement. Nothing in this
Section 1.4 will operate to relieve the Company from any of its obligations
under this Agreement or to waive any of your respective rights against the
Company.
1.5 EXPENSES.
(a) GENERALLY.
Whether or not the Bonds are sold, the Company shall promptly (and in any event
within thirty (30) days after receiving any statement or invoice therefor)
pay all expenses relating to this Agreement, the Indenture and the Bonds,
including but not limited to:
(i) the cost of reproducing this Agreement, the Second
Supplemental Indenture, the Bonds and any other documents or
instruments relating thereto;
(ii) subject to Section 1.5(b) below, the fees and
disbursements of your respective special counsel;
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(iii) the cost of delivering to your respective home offices or
custodian banks, insured to your respective satisfaction, the Bonds
purchased by you at the Closing;
(iv) the cost of obtaining the private placement number
referred to in Section 2.21 of this Agreement;
(v) the fees and expenses of SSP Hambro & Co., LLC and ▇▇▇▇▇
Fargo Bank, and any other broker or agent, incurred by the Company in
connection with the offer, issue, sale and delivery of the Bonds or
the transactions contemplated by this Agreement; and
(vi) all expenses relating to the consideration, negotiation,
preparation or execution of any amendments, waivers or consents
pursuant to the revisions of this Agreement or the Indenture, whether
or not such amendments, waivers or consents shall have become
effective.
(b) COUNSEL.
Without limiting the generality of the foregoing, it is agreed and understood
that the Company will pay, at or within thirty (30) days after the Closing,
statements for fees and disbursements of your respective special counsel
presented at the Closing and the Company will also pay upon receipt of any
statement thereof, each additional statement for fees and disbursements of
your respective special counsel rendered after the Closing in connection
with the issuance of the Bonds or the matters referred to in Section 1.5(a)
hereof. Provided, however, that the maximum liability of the Company for
the fees and disbursements of special counsel to each Purchaser shall not
exceed $1,000 in the aggregate as to each Purchaser. There shall be no
charge to the Company for fees or disbursements of counsel for the
Purchasers who are employees of the Purchasers or their respective
affiliates.
(c) SURVIVAL.
The obligations of the Company under this Section 1.5 will survive the payment
or prepayment of the Bonds and the termination of this Agreement.
SECTION 2. WARRANTIES AND REPRESENTATIONS
To induce each of you to enter into this Agreement and to purchase the
Bonds listed on Annex 1 to this Agreement opposite your respective names, the
Parent (solely with respect to the representations and warranties set forth in
Section 2.3(a), Section 2.4(a), Section 2.12(a) and Section 2.12(b) and, insofar
as such representations and warranties relate to the Parent, Section 2.10 and
Section 2.18) and the Company (with respect to all representations and
warranties other than those set
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forth in Sections 2.3(a)(i), (ii), and (iii), Section 2.4(a), Section 2.12(a)
and Section 2.12(b), and, insofar as such representations and warranties relate
to the Company, Section 2.3(a) (iv), Section 2.10 and Section 2.18) warrant and
represent to you as of the Closing Date as follows.
2.1 SUBSIDIARIES.
The Company has no Subsidiaries.
2.2 CORPORATE ORGANIZATION AND AUTHORITY.
The Company:
(a)
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New Mexico;
(b)
has all requisite legal and corporate power and authority and all necessary
licenses and permits to own and operate its Properties and to carry on its
business as now conducted and as presently proposed to be conducted; and
(c)
Part I of Annex 3 to this Agreement sets forth the name of each of the Company's
corporate or joint venture Affiliates, the nature of the affiliation and
the jurisdiction of incorporation of the Company and each such Affiliate.
2.3 BUSINESS, PROPERTY AND INDEBTEDNESS.
(a) NATURE OF BUSINESS; PROPERTIES.
Each of:
(i) the Annual Report of the Parent on Form 10-K for the
fiscal year ended December 31, 1995, filed by the Parent with the
Securities and Exchange Commission;
(ii) the Annual Report to Shareholders of the Parent for the
fiscal year ended December 31, 1995;
(iii) the Quarterly Report of the Parent on Form 10-Q for the
fiscal period ended June 30, 1996; and
(iv) the Confidential Direct Placement Memorandum (the
"Placement Memorandum"), dated August 1996 and prepared by SSP Hambro
& Co., LLC and ▇▇▇▇▇ Fargo Bank;
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correctly describes, among other things, the general nature of the business
and principal Properties of the Company. Copies of each item described in
clauses (i) through (iv) above have previously been delivered to each
Purchaser.
(b) INDEBTEDNESS.
Part II of Annex 3 to this Agreement correctly lists all outstanding
indebtedness for borrowed money of the Company as of the Closing Date.
2.4 FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE.
(a) FINANCIAL STATEMENTS-PARENT.
The consolidated balance sheets of the Parent and its consolidated subsidiaries
(including, without limitation, the Company) as of December 31 in the years
1995 and 1994 and the related consolidated statements of income,
consolidated statements of changes in common stockholders' equity and
consolidated statements of cash flows for the fiscal years ended on such
dates, all accompanied by reports thereon, containing opinions without
qualification, by KPMG Peat Marwick, LLC, independent certified public
accountants, and the consolidated condensed balance sheets of the Parent
and its consolidated subsidiaries as of June 30, 1996 and December 31,1995,
and the related consolidated condensed statements of income and cash flow
for the three (3) and six (6) month periods ended on June 30, 1996, copies
of which have been delivered to each of you, have been prepared in
accordance with generally accepted accounting principles consistently
applied, and present fairly the consolidated financial position of the
Parent and its consolidated subsidiaries as of such dates and the results
of their operations for such periods. All such consolidated financials
include the accounts of the Company.
(b) FINANCIAL STATEMENTS - COMPANY.
The balance sheets of the Company as of December 31 in the years 1995 and 1994
and the related statements of income and retained earnings and statements
of cash flows for the fiscal years ended on such dates, accompanied by a
report thereon, containing an opinion without qualification, by KPMG Peat
Marwick LLP, copies of which have been delivered to you, have been prepared
in accordance with generally accepted accounting principles consistently
applied, and present fairly the financial position of the Company as of
such dates and the results of its operations for such periods.
(c) MATERIAL ADVERSE CHANGE.
Since December 31, 1995, there has been no change in the business, profits,
Properties or condition (financial or otherwise) of the Company except:
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(i) as disclosed to you in the documents referenced in clauses
(iii) and (iv) of Section 2.3(a) or otherwise disclosed to you in this
Agreement; and
(ii) for other changes in the ordinary course of business that,
in the aggregate, have not had a materially adverse effect on the
business, profits, Properties or condition (financial or otherwise) of
the Company or on the ability of the Company to perform its
obligations set forth in this Agreement, in the Bonds and in the
Indenture.
2.5 FULL DISCLOSURE.
The financial statements referred to in Section 2.4(a) and 2.4(b) do not, nor
does this Agreement or the Placement Memorandum, contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading.
2.6 PENDING LITIGATION.
There are no proceedings, actions or investigations pending or, to the knowledge
of the Company, threatened against or affecting the Company in any court or
before any Governmental Authority or arbitration board or tribunal which, either
individually or in the aggregate, involve the possibility of materially and
adversely affecting the business, profits, Properties, or condition (financial
or otherwise) of the Company, or the ability of the Company to consummate the
Transactions or perform its obligations set forth in this Agreement, in the
Bonds or in the Indenture. Without limiting the generality of the foregoing,
except as has been disclosed in the Placement Memorandum or the items listed in
Section 2.3, no proceedings with respect to the condemnation of any Property of
the Company are pending or, to the best knowledge of the Company, contemplated
by any Governmental Authority to which the Property of the Company is subject.
The Company is not in default with respect to any order of any court,
Governmental Authority or arbitration board or tribunal.
2.7 TITLE TO PROPERTIES.
The Company has, and at the time of the Closing will have, good and
marketable title to all of the fee interests in real Property, and good title to
all of the other interests in Property, it purports to own, including Property
reflected in the most recent balance sheet referred to in Section 2.4(b) of this
Agreement and Property described in the Indenture as being subject to the Lien
thereof, subject only to the Lien of the Indenture and Prior Liens. Without
limiting the generality of the foregoing, the Company has, as of the Closing
Date, all water, water rights, rights to purchase water, water systems, water
works, plants, pumps, tanks, pipes, strainers, fittings, valves, reservoirs,
supplies and implements it purports to own, in each case owned by the Company
subject only to the Lien of the Indenture and Prior Liens and without
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limitation as to time within which any such rights may be exercised or such
Property may be held. There are no Liens upon or other defects (including,
without limitation, defects of the type which would be disclosed by a survey) in
or to any of the real Property of the Company, or the title or interest of the
Company in or to such real Property, which, individually or in the aggregate,
would have a material adverse effect upon the business, profits, Properties or
condition (financial or otherwise) of the Company or the ability of the Company
to operate its business.
2.8 PATENTS, TRADEMARKS, LICENSES, ETC.
The Company owns or possesses, and upon completion of the Closing will own or
possess, all of the franchises (including, without limitation, franchises
granted by the PUC), patents, trademarks, service marks, trade names,
copyrights, licenses and rights (including, without limitation, rights to
produce and purchase water) necessary for the present and planned future conduct
of its business, without any known conflict with the rights of others, and all
such franchises, patents, trademarks, service marks, trade names, copyrights,
licenses and rights are valid and subsisting. To the Company's knowledge, no
event has occurred which (a) permits, or after notice or lapse of time or both
would permit, revocation or termination of any such license or franchise or (b)
materially adversely affects or in the future may (so far as the Company can now
reasonably foresee) materially adversely affect any of the rights of the Company
thereunder.
2.9 AUTHORIZATION, EXECUTION, DELIVERY AND ENFORCEABILITY.
(a) TRANSACTIONS ARE LEGAL AND AUTHORIZED.
The consummation by the Company of each of the Transactions:
(i) is within the corporate powers of the Company; and
(ii) is legal and will not conflict with, result in any breach
in any of the provisions of, constitute a default under, or result in
the creation of any Lien upon any Property of the Company under the
provisions of, any agreement, charter instrument, bylaw or other
instrument to which it is a party or by which it or any of its
Property may be bound.
(b) OBLIGATIONS ARE ENFORCEABLE.
Each of this Agreement, the Second Supplemental Indenture and the Bonds has been
duly authorized by all necessary action on the part of the Company, has
been executed and delivered by duly authorized officers of the Company and
constitutes a legal, valid and binding obligation of the Company,
enforceable in
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accordance with its terms, except that the enforceability of this
Agreement, the Indenture and the Bonds may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium, or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.10 NO DEFAULTS.
To the knowledge of the Company and the Parent, no event has occurred and no
condition exists which, upon the execution of this Agreement and the Second
Supplemental Indenture and the issuance of the Bonds, would constitute a Default
or an Event of Default. To the knowledge of the Company and the Parent, neither
the Company nor the Parent is in violation in any respect of any term of any
charter instrument or bylaw and neither the Company nor the Parent is in
violation in any material respect of any term in any agreement or other
instrument to which it is a party or by which it or any of its Property may be
bound. To the knowledge of the Company and the Parent, other than as disclosed
to you in Part V of Annex 3, no event has occurred or condition exists such
that, but for the waiver by any Person (other than the Company or the Parent) of
any term or provision in any agreement or other instrument to which the Company
or the Parent is a party or by which it or any of its Property may be bound, the
Company or the Parent would be in violation in any material respect of any of
its obligations under such agreement or instrument.
2.11 GOVERNMENTAL CONSENT.
As of the Closing, all consents, approvals, orders and authorizations
required of or by any Governmental Authority, including, without limitation, the
PUC, for the Company to consummate the Transactions will have been duly
obtained, all related filings, registrations and qualifications will have been
duly made, and no appeal from any such consent, approval, order or authorization
of or by any Governmental Authority will be pending, including, without
limitation, any such consent, approval, order or authorization of the PUC.
2.12 TAXES.
(a) RETURNS FILED; TAXES PAID.
All tax returns required to be filed by the Company, and any other Person with
which the Company files or has filed a consolidated return, in any
jurisdiction have in fact been filed on a timely basis, and, to the
knowledge of the Company and the Parent, all taxes, assessments, fees and
other governmental charges upon the Company, or upon any of its Properties,
income or franchises, which are due
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and payable have been paid or will be paid prior to delinquency. The
Company is not aware of any proposed additional tax assessment against it
or any such Person. There exists no controversy with any Governmental
Authority with respect to the amount of any tax payable by the Company to
such Governmental Authority.
(b) BOOK PROVISIONS ADEQUATE.
The provisions for taxes (including, without limitation, any payment or payments
owing from the Company to any other Person pursuant to any tax sharing
agreement among such Persons) on the books of the Company are adequate for
all open years and for its current fiscal period. The amount of the
liability for all taxes reflected in the consolidated balance sheet of the
Company as of December 31, 1995 is an adequate provision for such taxes
(including, without limitation, any payment due pursuant to any such tax
sharing agreement) as may be payable by the Company for the fiscal years
1992 through 1995, inclusive, the only fiscal years not closed by the
statute of limitations or by the completion of an audit.
2.13 USE OF PROCEEDS.
The Company will apply the proceeds from the sale of the Bonds solely to retire
short term bank indebtedness and to repay the Parent for advances used to fund
expenditures associated with water and sewer utility plant expansion for
anticipated growth in its service area and to redeem advances for certain
construction contracts. None of the transactions contemplated in this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Bonds) violates, will violate or will result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Company
does not own, and does not intend with the proceeds of the sale of the Bonds to
own, carry or purchase any "margin security" within the meaning of said
Regulations G, T and X, including "margin securities" originally issued by the
Company. This Agreement and the Bonds will not be secured by any "margin
security," and no Bonds are being sold on the basis of any such collateral.
None of the proceeds from the sale of the Bonds will be used to purchase or
carry (or refinance any borrowing the proceeds of which were used to purchase or
carry) any "security" within the meaning of the Securities Exchange Act of 1934,
as amended.
2.14 PUBLIC UTILITY HOLDING COMPANY ACT.
The Company is not a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of
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a "holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
2.15 PRIVATE OFFERING.
Neither the Company nor SPP Hambro & Co., LLC and ▇▇▇▇▇ Fargo Bank (the only
Persons authorized or employed by the Company as agent, broker, dealer or
otherwise in connection with the offering or sale of the Bonds or any similar
Security of the Company) has offered any of the Bonds or any similar Security of
the Company for sale to, or solicited offers to buy any thereof from, or
otherwise approached or negotiated with respect thereto with, any prospective
purchaser, other than you and thirty-eight (38) other institutional investors,
each of whom was offered all or a portion of the Bonds at private sale for
investment. The Company agrees that neither the Company nor anyone acting on its
behalf will offer the Bonds or any part thereof or any similar Securities for
issue or sale to, or solicit any offer to acquire any of the same from, anyone
so as to bring the offering, issuance or sale of the Bonds within the provisions
of Section 5 of the Securities Act.
2.16 COMPLIANCE WITH LAW.
To the knowledge of the Company, the Company:
(a)
is not in material violation of any law, ordinance, governmental rule,
regulation, order or judgment of any court or other Governmental Authority or
award of any arbitrator to which it is subject; and
(b)
has not failed to obtain any material license, permit, franchise or other
governmental authorization necessary to the ownership of its Property or to the
conduct of its business;
which violation or failure to obtain might, either individually or in the
aggregate, materially adversely affect the business, profits, Properties or
condition (financial or otherwise) of the Company or the ability of the Company
to consummate the Transactions or perform its obligations set forth in this
Agreement, the Indenture or the Bonds.
2.17 RESTRICTIONS ON COMPANY.
The Company:
(a)
is not a party to any contract or agreement, or subject to any charter or other
corporate restriction, which materially and adversely affects the business,
profits, Properties or condition (financial or otherwise) of the Company or
the ability of
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the Company to perform its obligations set forth in this Agreement, the
Indenture and the Bonds;
(b)
is not a party to any contract or agreement (other than the Indenture) which
restricts the right or ability of such corporation to incur debt; and
(c)
has not agreed or consented to cause or permit in the future (upon the happening
of a contingency or otherwise) any of its Property, whether now owned or
hereafter acquired, to be subject to a Lien not permitted by the Indenture.
2.18 ERISA.
(a) RELATIONSHIP OF VESTED BENEFITS TO PENSION PLAN ASSETS.
To the knowledge of the Company and the Parent, the present value of all
benefits vested under all Pension Plans (other than Multiple Employer
Pension Plans) maintained by the Company, the Parent and the subsidiaries
of the Parent (and under all Multiple Employer Pension Plans with respect
to which the Company, the Parent or of any such subsidiaries is a
"substantial employer" within the meaning of Section 4001(a)(2) of ERISA)
does not exceed the value of the assets of the Pension Plans allocable to
such vested benefits. For purposes of this Section 2.18(a), the present
value of the benefits vested under any Pension Plan shall be determined as
of the most recent valuation date, based upon assumptions and methods
determined in the good faith judgment of the Company and in compliance with
the requirements of law.
(b) ERISA REQUIREMENTS.
To the knowledge of the Company and the Parent, each of the Company and the
ERISA Affiliates:
(i) has fulfilled all obligations in all material respects
under the minimum funding standards of ERISA and the IRC with respect
to each Pension Plan;
(ii) has satisfied all contribution obligations in all material
respects in respect of each Multiemployer Pension Plan;
(iii) is in compliance in all material respects with all other
applicable provisions of ERISA and the IRC with respect to each
Pension Plan; and
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(iv) has not incurred any material liability under Title IV of
ERISA to the PBGC (other than in respect of required insurance
premiums, all of which that are due having been paid), with respect to
any Pension Plan, any Multiemployer Pension Plan or any trust
established thereunder.
No Pension Plan, or trust created thereunder, has incurred any material
accumulated funding deficiency (as such term is defined in Section 302 of
ERISA), whether or not waived, as of the last day of the most recently
ended plan year of such Pension Plan. The Company has no liability for any
post-retirement benefits (other than benefits pursuant to Section 4980B of
IRS or Title I, Subtitle B, Part 6 of ERISA) under any welfare plan (as
defined in Section 3(1) of ERISA).
(c) PROHIBITED TRANSACTIONS.
(i) The purchase of the Bonds by you will not constitute a
transaction prohibited by Section 406 of ERISA or a non-exempt
"prohibited transaction" (as such term is defined in Section 4975 of
the IRC) that could subject you, the Company" or any ERISA Affiliate
to the penalty or tax on prohibited transactions imposed by Section
502 of ERISA or Section 4975 of the IRC, and neither the Company nor
any ERISA Affiliate, nor any "employee benefit plan" (as such term is
hereinafter defined) of the Company or any ERISA Affiliate or any
trust created thereunder or any trustee or administrator thereof, has
engaged in any "prohibited transaction" that could subject you, the
Company, or any ERISA Affiliate, to such penalty or tax. The
representation by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of the representations in
Section 1.3(b) hereof as to the source of funds used by you.
(ii) Part III of Annex 3 hereto completely lists all Pension
Plans with respect to which the Company is a "party in interest" or a
"disqualified person" (as such terms are hereinafter defined) and all
Pension Plans covering employees of the Company or any "affiliate" (as
such term is hereinafter defined).
(iii) Part III to Annex 3 hereto completely lists all ERISA
Affiliates.
As used in this Section 2.18(c), the terms "employee benefit plan" and
"party in interest" have the respective meanings assigned to them in
Section 3 of ERISA;
14
the term "affiliate" has the meaning assigned to it in Section 407(d) of
ERISA; and the term "disqualified person" has the meaning assigned to it in
Section 4975(e)(2) of the IRC.
(d) REPORTABLE EVENTS.
No Pension Plan or trust created thereunder has been terminated, and to the
knowledge of the Company and the Parent, there have been no "reportable
events" (as such term is defined in Section 4043 of ERISA), with respect to
any Pension Plan or trust created thereunder, which reportable event or
events will result in the termination of such Pension Plan and give rise to
a liability of the Company or any ERISA Affiliate in respect thereof.
(e) MULTIEMPLOYER PENSION PLANS.
Except as set forth on Part III of Annex 3 hereto, neither the Company nor any
ERISA Affiliate is an employer required to contribute to any Multiemployer
Pension Plan. Neither the Company nor any ERISA Affiliate has incurred,
nor is expected to incur, any withdrawal liability (that has not previously
been fully satisfied) under Title IV, Subtitle E of ERISA with respect to
any Multiemployer Pension Plan. None of the Multiemployer Pension Plans
referred to in Part III of Annex 3 have been terminated under Section 4041A
of ERISA, have been placed in reorganization status under Title IV of
ERISA, or have been determined to be "insolvent" (as such term is defined
in Section 4245 of ERISA).
(f) MULTIPLE EMPLOYER PENSION PLANS.
Except as set forth in Part III of Annex 3 hereto, neither the Company nor any
ERISA Affiliate is a "contributing sponsor" (as such term is defined in
Section 4001 of ERISA) in any Multiple Employer Pension Plan and neither
the Company nor any ERISA Affiliate has incurred (without fully satisfying
the same), or reasonably expects to incur, withdrawal liability under
Section 4063 of ERISA in respect of any such Multiple Employer Pension Plan
listed in Part III of Annex 3 hereto, which withdrawal liability could have
a material adverse effect on the business, profits, Properties or condition
(financial or otherwise) of the Company or the ability of the Company to
perform its obligations set forth in this Agreement, the Indenture and the
Bonds.
2.19 INVESTMENT COMPANY ACT.
The Company is not, and is not directly or indirectly controlled by, or acting
on behalf of any Person which is, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
15
2.20 ENVIRONMENTAL COMPLIANCE.
Except as set forth in Part IV of Annex 3 hereto:
(a) COMPLIANCE
-- to the knowledge of the Company, the Company is in compliance with all
Environmental Protection Laws in effect in each jurisdiction where it is
presently doing business, except such failures so to comply as would not,
in the aggregate, be reasonably expected to have a material adverse effect
on the business, profits, Properties or condition (financial or otherwise)
of the Company or the ability of the Company to perform its obligations set
forth in this Agreement, the Indenture and the Bonds;
(b) LIABILITY
-- to the knowledge of the Company, the Company is not subject to any liability
under any Environmental Protection Laws that, in the aggregate, could be
reasonably expected to have a material adverse effect on the business,
profits, Properties or condition (financial or otherwise) of the Company or
the ability of the Company to perform its obligations set forth in this
Agreement, the Indenture and the Bonds; and
(c) NOTICES
-- the Company has not received any:
(i) written notice from any Governmental Authority by which
any of its present or previously-owned or leased real Properties has
been designated, listed, or identified in any manner by any
Governmental Authority charged with administering or enforcing any
Environmental Protection Law as a Hazardous Substance disposal or
removal site, "Super Fund" clean-up site, or candidate for removal or
closure pursuant to any Environmental Protection Law;
(ii) written notice of any Lien arising under or in connection
with any Environmental Protection Law that has attached to any
revenues of, or to, any of its owned or leased real Properties; or
(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by the
Company in connection with its ownership or leasing of any real
Property resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying, dumping, or otherwise disposing of any
Hazardous
16
Substance into the environment resulting in any material violation of
any Environmental Protection Law;
in the case of clauses (ii) and (iii) above, where the effect of which
could be reasonably expected to have a material adverse effect on the
business, profits, Properties or condition (financial or otherwise) of the
Company or the ability of the Company to consummate the Transactions or to
perform its obligations set forth in this Agreement, the Indenture and the
Bonds.
2.21 PRIVATE PLACEMENT NUMBER.
The Company has obtained private placement number 64744# AB 9 from Standard &
Poor's Corporation CUSIP Service Bureau for the Bonds.
2.22 RESTRICTED THIRD-PARTY ENCUMBRANCES.
The easements owned by the Company referenced by numbers 47 through 56,
inclusive, 73, 74 and 90 to Exhibit A to the Indenture are encumbered by Third-
Party Encumbrances as reflected on Exhibit B to the Title Commitment. The
information set forth in Part V of Annex 3 to this Agreement with respect to the
Property subject to such Restricted Third Party Encumbrances, the Company's use
of such Properties and the nature of such Restricted Third Party Encumbrances is
true, accurate and complete in all material respects. Other than those
Properties listed in the first sentence of this Section 2.22 and described in
Part V of Annex 3 to this Agreement, the Company owns no Property which is
subject to Restricted Third Party Encumbrances. Those Properties listed in the
first sentence of this Section 2.22 and described in Part V of Annex 3 to this
Agreement are subject to no Restricted Third Party Encumbrances other than those
reflected on Exhibit B to the Title Commitment. Such Restricted Third Party
Encumbrances do not, and the exercise of such remedies as would foreclose or
terminate the right or interest of the Company in or to such Property by the
Persons who hold such Restricted Third Party Encumbrances would not be likely
to, individually or in the aggregate, have a material adverse effect upon the
business, profits, Properties (taken as a whole) or condition (financial or
otherwise) of the Company or the ability of the Company to consummate the
Transactions or perform its obligations set forth in this Agreement, the Bonds
or the Indenture.
The easements referenced by numbers 91 through 93, inclusive, to Exhibit A
to the Indenture are grants by the fee owners of the Properties underlying such
easements of general Utility easements in favor of no specified Person. The
Company has the right to use each of such easements for the purposes for which
the Company is now using them.
SECTION 3. CLOSING CONDITIONS
17
Your respective obligations to purchase and pay for the Bonds to be
delivered to you at the Closing will be subject to the following conditions
precedent:
3.1 OPINIONS OF COUNSEL.
You will have received from:
(a)
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company;
(b)
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., special counsel and PUC counsel for the Company; and
(c)
Modrall, Sperling, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.A., legal counsel for the Trustee.
closing opinions, each dated as of the Closing Date, and substantially in the
respective forms set forth in Exhibit B1, Exhibit B2 and Exhibit B3 to this
Agreement, and to such other matters as you may reasonably request.
3.2 WARRANTIES AND REPRESENTATIONS TRUE; NO PROHIBITED ACTION.
(a) WARRANTIES AND REPRESENTATIONS TRUE.
The warranties and representations of the Company and the Parent contained in
Section 2 of this Agreement will be true in all material respects.
(b) NO PROHIBITED ACTION.
The Company shall not have taken any action or permitted any condition to exist
which would constitute a Default or an Event of Default.
3.3 COMPLIANCE WITH THIS AGREEMENT.
The Company will have performed and complied with all agreements and conditions
contained herein which are required to be performed or complied with by the
Company before or at the Closing.
3.4 OFFICERS' CERTIFICATES.
You will have received:
(a)
a certificate dated the Closing Date and signed by (i) the Chairman of the Board
or the President and (ii) the Vice President, Finance of the Company,
substantially in the form of Exhibit C1 to this Agreement with respect to
the matters therein set forth;
18
(b)
a certificate dated the Closing Date and signed by (i) the President or a Vice-
President and (ii) the Chief Financial Officer of the Parent, substantially
in the form of Exhibit C2 to this Agreement with respect to the matters
therein set forth;
(c)
a certificate dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Company, substantially in the form of Exhibit D1 to this
Agreement, with respect to the matters therein set forth; and
(d)
a certificate dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Parent, substantially in the form of Exhibit D2 to this
Agreement, with respect to the matters therein set forth.
3.5 LEGALITY.
The Bonds shall on the Closing Date qualify as a legal investment for insurance
companies under applicable insurance law (without regard to any "basket" or
"leeway" provisions) and you shall have received such evidence as you may
reasonably request to establish compliance with this condition.
3.6 REGULATORY APPROVALS.
Not less than thirty (30) days prior to the Closing, the PUC shall have issued
the PUC Order. Such order shall be effective and no appeal shall be pending
with respect thereto.
3.7 BOTH PURCHASERS.
With respect to each Purchaser, the other Purchaser shall have
executed and delivered this Agreement and accepted delivery of and made payment
for the Bonds to be purchased by it on the Closing Date.
3.8 LIENS UPON COLLATERAL.
All recordings and filings of:
(a)
the Second Supplemental Indenture with the clerk of Bernalillo County, New
Mexico;
(b)
a financing statement on Form UCC-1 relating to that Collateral which consists
of personal Property with the Secretary of State of New Mexico; and
(c)
19
a financing statement on Form UCC-1 relating to that Collateral which consists
of fixtures with the clerk of Bernalillo County, New Mexico,
in each case, which are required or reasonably requested by the Trustee or you
to provide record notice of the Liens upon all of the Collateral, shall have
been made.
3.9 TITLE INSURANCE.
The Trustee shall have received a policy of title insurance or the Title
Commitment committing to issue the same in form and substance satisfactory to
you, from Ticor Title Insurance Company insuring the Trustee and the holders of
the Outstanding Bonds issued under the Indenture against loss or damage to the
extent of $6,000,000 plus costs as permitted by the policy by reason of any
defect in the Lien of the Indenture on the Property (other than Excepted
Property and the parcels identified on Exhibit A to the Original Indenture as
not being insured by a policy of title insurance) described therein or by reason
of the title to the Property being other than as shown in such policy. Such
policy (or the Title Commitment to issue the same) shall extend to the Property
(other than uninsurable Property) identified on Exhibit A to the Original
Indenture and to the additional Property being added to the Lien of the
Indenture by virtue of the Second Supplemental Indenture. You shall have
received a copy of such policy of title insurance or the Title Commitment.
3.10 INDENTURE CONDITIONS.
All conditions precedent set forth in the Indenture with respect to consummation
of the Transactions shall have been satisfied. Without limiting the generality
of the foregoing, the Company's Bondable Capacity (after giving effect to the
addition of certain Collateral on the Closing Date pursuant to the Second
Supplemental Indenture) and Net Earnings for Interest shall be sufficient to
permit the issuance of the Bonds, and you shall have received certificates of
the Company, as contemplated by Article IV of the Indenture, to such effect.
3.11 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with the sale of the Bonds and all documents
and papers relating thereto will be satisfactory to you. You will have received
copies of such documents and papers as you may reasonably request in connection
therewith (including, without limitation, copies of all certificates delivered
to the Trustee in connection with the consummation of the Transactions), all in
form and substance satisfactory to you; provided, however, that you agree that
all documents the forms of which are annexed hereto as exhibits shall be in form
and substance satisfactory to you if duly authorized, executed and delivered in
the respective forms set forth in such exhibits.
SECTION 4. AGREEMENTS OF THE COMPANY
20
4.1 FINANCIAL AND BUSINESS INFORMATION.
The Company will deliver to you, if at the time you or your nominee holds any
Bonds, and to each other institutional holder of the then Outstanding Bonds:
(a) QUARTERLY STATEMENTS
-- as soon as practicable after the end of each quarterly fiscal period in each
fiscal year of the Company (other than the last quarterly fiscal period of
such fiscal year) commencing with the third fiscal quarter of 1996, and in
any event within sixty (60) days thereafter, duplicate copies of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter; and
(ii) consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries, for such quarter and
(in the case of the second or third quarters) for the portion of the
fiscal year ending with such quarter;
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail
and certified as being complete and correct, and as having been prepared in
conformity with generally accepted accounting principles, subject to
changes resulting from year-end adjustments, by the chief financial officer
or treasurer of the Company;
(b) ANNUAL STATEMENTS
-- as soon as practicable after the end of each fiscal year of the Company, and
in any event within one hundred twenty (120) days thereafter, commencing
with the Company's 1996 fiscal year, duplicate copies of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year; and
(ii) consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for such year;
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by an opinion thereon
of the accountants named in Section 2.4 of this Agreement or other
independent certified public accountants of recognized national standing
selected by the Company, which opinion shall, without qualification, state
that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their
results of operations and cash flows
21
in conformity with generally accepted accounting principles, that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and that such audit provides a reasonable basis for such opinion
in the circumstances;
(c) AUDIT REPORTS
-- promptly upon receipt thereof, one copy of each other report submitted to the
Company or any Subsidiary by independent accountants in connection with any
annual, interim or special audit made by them of the books of the Company
or any Subsidiary;
(d) SEC AND OTHER REPORTS OF THE COMPANY AND THE PARENT
-- promptly upon their becoming publicly available, one copy of each financial
statement, report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report and any
registration statement, prospectus or written communication in respect
thereof filed by the Company with, or received by it in connection
therewith from, any securities exchange or the Securities and Exchange
Commission or any successor agency, and one copy of each financial
statement, report, notice or proxy statement sent by the Parent to its
stockholders generally;
(e) ERISA
-- promptly upon becoming aware of the occurrence of:
(i) any material "reportable event" (as such term is defined in
Section 4043 of ERISA) with respect to which the reporting requirement
has not been waived; or
(ii) any material transaction prohibited by Section 406 of ERISA
or any non-exempt "prohibited transaction" (as such term is defined in
Section 4975 of the IRC);
in connection with any Pension Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action, if any, the
Company is taking or proposes to take with respect thereto, and, when
known, any action taken by the IRS, the Department of Labor or the PBGC
with respect thereto;
(f) ERISA WAIVERS
-- prompt written notice of and a description of any request pursuant to Section
303 of ERISA or Section 412 of the IRC for, or notice of the granting
pursuant to said Section 303 or Section 412 of, a waiver in respect of all
or part of the minimum funding standard set forth in ERISA or the IRC, as
the case may be, of any
22
Pension Plan, and, in connection with the granting of any such waiver, the
amount of any "waived funding deficiency" (as such term is defined in said
Section 303 or said Section 412) and the terms of such waiver; provided,
however, that no such notice need be given if the amount of any waived
funding deficiency shall not be material in the context of the business,
profits, Properties or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole;
(g) OTHER ERISA NOTICES
-- prompt written notice of and, where applicable, a description of:
(i) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to Section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan;
(ii) any distress termination notice delivered to the PBGC
under Section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof;
(iii) the placement of any Multiemployer Pension Plan in
reorganization status under Title IV of ERISA;
(iv) any Multiemployer Pension Plan becoming "insolvent" (as
such term is defined in Section 4245 of ERISA);
(v) the complete or partial withdrawal of the Company or any
ERISA Affiliate from any Multiemployer Pension Plan and the withdrawal
liability incurred in connection therewith; and
(vi) the withdrawal of the Company or any ERISA Affiliate from
any Pension Plan with respect to which it is a "substantial employer"
as defined in ERISA and the withdrawal liability under Section 4063 of
ERISA incurred in connection therewith;
(h) NOTICE OF DEFAULT OR EVENT OF DEFAULT
-- immediately upon becoming aware of the existence of any condition or event
which constitutes a Default or an Event of Default, a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
(i) NOTICE OF CLAIMED DEFAULT
23
-- immediately upon becoming aware that the holder of any Bond or of any
evidence of indebtedness or other Security of the Company or any Subsidiary
has given notice or taken any other action with respect to a claimed Event
of Default or default under such Bond, evidence of indebtedness or
Security, a written notice specifying the notice given or action taken by
such holder and the nature of the claimed Event of Default or default and
what action the Company is taking or proposes to take with respect thereto;
(j) INFORMATION REQUIRED By INDENTURE
-- all information, notices, certificates and opinions required by the terms of
the Indenture to be delivered to the holders of the Bonds; and
(k) REQUESTED INFORMATION
-- with reasonable promptness, such other data and information reasonably
available to the Company as from time to time may be reasonably requested.
Without limiting the generality of the foregoing, the Company will deliver
to you or any successor or transferee the information required by 17 C.F.R.
(S) 230.144A in connection with any transfer or proposed transfer of Bonds
by you or any successor or transferee pursuant thereto.
4.2 OFFICERS' CERTIFICATES.
Each set of financial statements delivered to you or any other institutional
holder of the Bonds pursuant to Section 4.1(a) or Section 4.1(b) of this
Agreement will be accompanied by a certificate of the Chairman of the Board, the
President or a vice president and the Vice President, Finance of the Company
setting forth:
(a) COVENANT COMPLIANCE
-- the information (including detailed calculations) required in order to
establish whether the Company was in compliance with the requirements of
Article VI of the Indenture during the period covered by the income
statement then being furnished; and
(b) EVENT OF DEFAULT
-- a statement that the signers have reviewed the relevant terms of this
Agreement and the Indenture and have made, or caused to be made, under
their supervision, a review of the transactions and conditions of the
Company and the Subsidiaries from the beginning of the accounting period
covered by the income statements being delivered therewith to the date of
the certificate and that such review has not disclosed the existence during
such period of any condition or event which constitutes a Default or an
Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Company has taken or proposes to take with respect thereto.
24
4.3 ACCOUNTANTS' CERTIFICATES.
Each set of annual financial statements delivered pursuant to Section 4.1 (b)
will be accompanied by a certificate of the accountants who certify the
financial statements of the Company, stating that they have reviewed Sections
6.01, 6.03, 6.06, 6.10, 6.14 and 12.01 of the Indenture and stating further,
whether, in making their audit of the financial statements:
(a)
such accountants have become aware of any condition or event which then
constitutes a Default or an Event of Default (whether or not as a result of
failure by the Company to comply with any of Sections 6.01, 6.03, 6.06,
6.10, 6.14 or 12.01 of the Indenture), and, if any such condition or event
then exists, specifying the nature and period of existence thereof; or
(b)
have become aware of any issuance of First Mortgage Bonds by the Company, or
withdrawal of cash held by the Trustee pursuant to the Indenture by the
Company, in each case, in violation of the terms of Section 4.02 of the
Indenture, and, in the event of any such issuance or withdrawal, describing
such issuance or withdrawal and specifying the violation occasioned
thereby.
4.4 INSPECTION.
The Company will permit any of your representatives, while you or your nominee
holds any Bond, or the representatives of any other institutional holder of the
Bonds, at your or such holder's expense (except during the continuance of any
Default or Event of Default, in which case, at the Company's expense), to visit
and inspect any of the Properties of the Company or any Subsidiary, to examine
all their books of account, records, reports and other papers, to make copies
and extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers, employees and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss the finances and affairs of the Company and the Subsidiaries) all at
such reasonable times and as often as may be reasonably requested.
4.5 REPORT TO NAIC.
Concurrently with the delivery to you of each annual statement required by
Section 4.1 (b) hereof, the Company will deliver a copy thereof to: Securities
Valuation Office, National Association of Insurance Commissioners, ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 5. INTERPRETATION OF THIS AGREEMENT
5.1 TERMS DEFINED.
25
As used in this Agreement, the following terms have the respective meanings set
forth below or set forth in the Section of this Agreement or the Indenture
following such term:
Affiliate -- at any time means a Person (other than a Subsidiary):
(a)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company;
(b)
which beneficially owns or holds five percent (5%) or more of any class of the
Voting Stock of the Company; or
(c)
five percent (5%) or more of the Voting Stock (or in the case of a Person which
is not a corporation, five percent (5%) or more of the equity interest) of which
is beneficially owned or held by the Company or a Subsidiary;
at such time. As used in this definition, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
Bond Purchase Agreement -- this Agreement.
Bondable Capacity -- Section 4.02A of the Indenture.
Bonds -- Section 1.1 of this Agreement.
Business Day -- a day other than a Saturday, a Sunday or a day on
which commercial banks in Lincoln, Nebraska are required or authorized to be
closed (other than a general bank holiday or moratorium, in either case of
longer than 4 calendar days).
Closing -- Section 1.2 of this Agreement.
Closing Date -- Section 1.2 of this Agreement.
Collateral -- all of that Property subject to the Lien of the
Indenture, after giving effect to the addition of collateral effectuated by
Section 2 of the Second Supplemental Indenture.
26
Company -- the introductory sentence of this Agreement.
Default -- Section 1.01 of the Indenture.
Environmental Protection Law -- means any existing or future federal,
state, county, regional or local law, statute, or regulation (including, without
limitation, (a) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980; (b) the Resource Conservation and Recovery Act of 1976;
(c) the Superfund Amendments and Reauthorization Act of 1986; (d) the Federal
Water Pollution Control Act; and (e) the Clean Water Act of 1977; in each case,
as amended from time to time, and together with all rules and regulations
promulgated in connection therewith) enacted by any Governmental Authority in
connection with or relating to the protection or regulation of the environment,
including, without limitation, those laws, statutes, and regulations regulating
the disposal, removal, production, storing, refining, handling, transferring,
processing, or transporting of Hazardous Substances and any orders, decrees or
judgments issued by any court of competent jurisdiction in connection with any
of the foregoing.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate -- means any corporation or trade or business that
(a) is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the IRC) as the Parent or the Company; or
(b) is under common control (within the meaning of Section 414(c) of
the IRC) with the Parent or the Company.
Event of Default -- Section 1.01 of the Indenture.
Excepted Property -- the "Excepted Property" exceptions to the
granting clauses of the Indenture.
First Mortgage Bonds -- means and includes the Series A Bonds, the
Bonds and each and every other bond, of whatever series, issued pursuant to the
Indenture.
First Supplemental Indenture -- Section 1.1 of this Agreement.
Governmental Authority -- means and includes:
(a) the governments of:
27
(i) the United States of America and any State or other
political subdivision thereof; or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business;
(b) each public utility commission or similar entity having
regulatory authority over the Company or any Subsidiary; and
(c) any other entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such government
referred to in clauses (a) or (b) of this definition.
Hazardous Substances -- means and includes any and all pollutants,
contaminants, toxic or hazardous wastes or any other substances that might pose
a hazard to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum-derived products).
Indenture -- Section 1.1 of this Agreement.
Interest Payment Date -- Section 1.01 of the Indenture.
IRC -- means the Internal Revenue Code of 1986, together with all
rules and regulations promulgated pursuant thereto, as amended from time to
time.
IRS -- means the Internal Revenue Service of the United States of
America and any successor agency.
Lien -- any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" includes reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting Property. For the purposes of this
Agreement, the Company or a Subsidiary will be deemed to be the owner of any
28
Property which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes and such
retention or vesting will be deemed to be a Lien.
Multiemployer Pension Plan -- means any multiemployer plan (as defined
in Section 3 (37) of ERISA), subject to Title IV of ERISA, in respect of which
the Company or any ERISA Affiliate is an "employer" (as such term is defined in
Section 3(5) of ERISA).
Multiple Employer Pension Plan - means any Pension Plan (other than a
Multiemployer Pension Plan), subject to Title IV of ERISA, to which the Company
or any ERISA Affiliate and an employer (as such term is defined in Section 3(5)
of ERISA) other than an ERISA Affiliate or the Company contribute.
Net Earnings for Interest -- Section 4.02A of the Indenture.
Original Indenture -- Section 1.1 of this Agreement.
Outstanding -- Section 1.01 of the Indenture; provided, however, that
for purposes of this Agreement only (and not the Indenture, except to the extent
provided therein), First Mortgage Bonds held or owned by the Company, any
Subsidiary or any Affiliate shall not be deemed to be Outstanding.
Parent -- Southwest Water Company, a Delaware corporation, which owns
one hundred percent (100%) of the capital stock of the Company.
PBGC -- means the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.
Pension Plan -- means, at any time, any "employee pension benefit
plan" (as such term is defined in Section 3(2) of ERISA), subject to Title IV of
ERISA, maintained at such time by the Company or any ERISA Affiliate for
employees of the Company or such ERISA Affiliate, excluding any Multiemployer
Pension Plan, but including, without limitation any Multiple Employer Pension
Plan.
Permitted Encumbrances -- Section 1.01 of the Indenture.
Person -- an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
29
Placement Memorandum -- Section 2 .3 of this Agreement.
Prior Liens -- Section 1.01 of the Indenture.
Property -- any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
PUC -- the New Mexico Public Utility Commission.
PUC Order -- the order of the PUC, dated October 7, 1996, (a)
authorizing the Company to issue and sell the Bonds, and (b) authorizing the
Company to execute and deliver the second Supplemental Indenture.
Required Holders -- at any time means the holders of 66 2/3% or more
in aggregate principal amount of Bonds Outstanding at such time.
Restricted Third Party Encumbrance -- Section 1.01 of the Indenture.
Second Supplemental Indenture -- Section 1.1 of this Agreement.
Series A Bonds -- the Series A Bonds of the Company issued pursuant to
Articles II and III of the Indenture.
Securities Act -- the Securities Act of 1933, as such act may be
amended from time to time.
Security -- has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
Subsidiary - a corporation of which the Company owns, directly or
indirectly, more than fifty percent (50%) of the Voting Stock.
Title Commitment -- means the commitment of Ticor Title Insurance
Company, dated as of a recent date, to issue the policy of Title Insurance
referred to in Section 3.9 of this Agreement, which commitment shall describe
and cover the Properties of the Company previously subjected to the Lien of the
Indenture and those being subjected to such Lien pursuant to the Second
Supplemental Indenture and the Liens existing of record upon such Properties as
of the date of such commitment.
Transactions -- means and includes (a) the execution and delivery by
the Company of this Agreement and the Second Supplemental Indenture; (b) the
granting to the Trustee of a Lien upon certain collateral pursuant to the
provisions of
30
the Second Supplemental Indenture; (c) the execution, delivery, issue and sale
of the Series B Bonds; and (d) compliance by the Company with the terms of the
Series B Bonds, the Indenture and this Agreement.
Trustee -- Section 1.1 of this Agreement.
Voting Stock -- capital stock of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing similar
functions).
5.2 ACCOUNTING PRINCIPLES.
All accounting terms not otherwise defined herein have the meanings assigned to
them, and all computations herein provided for shall be made in accordance with
generally accepted accounting principles at the time in effect, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement. In determining accounting principles, the Company shall
conform to generally accepted accounting principles at the time in effect,
unless it is required to conform to any other order, rule or regulation of any
Governmental Authority having jurisdiction over the Company.
5.3 DIRECTLY OR INDIRECTLY.
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision will be
applicable whether such action is taken directly or indirectly by such Person,
including actions taken by or on behalf of any partnership in which such Person
is a general partner.
5.4 GOVERNING LAW.
THIS AGREEMENT AND THE BONDS WILL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, INTERNAL NEW MEXICO LAW, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
5.5 SECTION HEADINGS, TABLE OF CONTENTS AND CONSTRUCTION.
The titles of the Sections and the Table of Contents appear as a matter of
convenience only, do not constitute a part of this Agreement and will not affect
the construction hereof. Each covenant contained in this Agreement will be
construed (absent an express contrary provision herein) as being independent of
each other covenant contained herein, and compliance with any one covenant will
not (absent such an express contrary provision) be deemed to excuse compliance
with one or more other covenants.
SECTION 6. MISCELLANEOUS
31
6.1 NOTICES.
(a) METHOD; ADDRESS.
All communications under this Agreement or under the Bonds will be in writing,
will be delivered (i) personally; (ii) by overnight courier; or (iii) sent
by facsimile transmission, acknowledgment received, with a copy sent by
first class mail; in each case, delivery or facsimile charges prepaid, and
will be addressed:
(i) if to the Company:
New Mexico Utilities, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President Finance
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Southwest Water Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President/Finance
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Company shall have furnished in
writing to the Trustee and all holders of the Bonds at the time
Outstanding:
(ii) if to you, at your addresses set forth on Annex 1 hereto,
and further including any parties referred to on such Annex 1 that are
required to receive notices in addition to you, or to any such party
at such other address as you may designate by notice duly given to the
Company and the Trustee in the manner provided in this Section 6.1
(which other address shall be entered in the Bond register); and
(iii) if to any other holder of Bonds, at their respective
addresses set forth in the register for the registration and transfer
of Bonds maintained pursuant to the Indenture, or to any such party at
such other address as such party may designate by notice duly given in
the manner provided in this Section 6.1 to the Company and to the
Trustee (which other address shall be entered in such register).
(b) WHEN GIVEN.
32
Any communication so addressed and delivered shall be deemed received, in the
case of personal delivery, when actually received; in the case of delivery
by overnight courier, on the Business Day following transmission; and in
the case of facsimile transmission, on the date of acknowledgment of
transmission, if a Business Day, and, if not a Business Day, on the next
succeeding Business Day.
6.2 AMENDMENT AND WAIVER.
(a) REQUIREMENTS.
This Agreement may be amended, and the observance of any term hereof may be
waived, with (and only with) the written consent of the Company and the
Required Holders; provided that no such amendment or waiver of any of the
provisions of Section 1, Section 3 or this Section 6.2, or any definition
relating thereto, shall be effective as to any holder of Bonds unless
consented to by such holder in writing.
(b) SOLICITATION OF BONDHOLDERS.
(i) Solicitation. The Company shall not:
(A) solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions hereof or the
Bonds; or
(B) solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of the
Indenture, which proposed waiver or amendment would, pursuant to the
terms of the Indenture, require the consent of any holder of a Bond;
unless, in each case, each holder of the Bonds (irrespective of the
amount of Bonds then owned by it) shall be informed thereof by the
Company with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of
any waiver or consent effected pursuant to the provisions of this
Section 6.2 or Article XIII of the Indenture shall be delivered by the
Company to each holder of Outstanding Bonds forthwith following the
date on which the same shall have been executed and delivered by all
holders of Outstanding Bonds (if any) required to consent or agree to
such waiver or consent.
(ii) Payment. The Company shall not, directly or indirectly, pay
or cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, or grant any
33
security, to any holder of First Mortgage Bonds as consideration for
or as an inducement to the entering into by any holder of First
Mortgage Bonds of any waiver or amendment of any of the terms and
provisions hereof, of any other purchase agreement pursuant to which
any other First Mortgage Bonds were sold, of any First Mortgage Bond
or of the Indenture unless such remuneration is concurrently paid,
security is concurrently granted, or offer is concurrently made on the
same terms, ratably to the holders of all Bonds then Outstanding.
(iii) Scope of Consent. Any consent made pursuant to this
Section 6.2 by a holder of Bonds that has transferred or has agreed to
transfer its Bonds to the Company, any Subsidiary or any Affiliate and
has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force and effect
except solely as to such holder, and any amendments effected or
waivers granted or to be effected or granted that would not have been
or would not be so effected or granted but for such consent (and the
consents of all other holders of Bonds that were acquired under the
same or similar conditions) shall be void and of no force and effect,
retroactive to the date such amendment or waiver initially took or
takes effect, except solely as to such holder.
(iv) Other Offers to Repurchase. The Company shall not make any
offer to repurchase, exchange for any other security or otherwise
acquire for value any First Mortgage Bond (whether or not the
acceptance of such offer is conditioned upon the giving by any holder
of any First Mortgage Bond of any waiver or consent) unless such offer
is concurrently made on the same terms, ratably, to the holders of all
Bonds then Outstanding.
The foregoing provisions of this Section 6.2(b) shall not prevent or
preclude:
(A) payment by the Company of attorneys' fees and expenses
(including, without limitation, the fees of counsel who are employees
of a holder of First Mortgage Bonds, at the rate or rates, it any, not
to exceed the rate or rates then customarily charged by such holder)
or other out-of-pocket costs incurred by a holder of First Mortgage
Bonds in connection with any such consent, waiver or amendment where
such payment is required pursuant to a purchase agreement, any First
Mortgage Bond or the Indenture, all of which fees and expenses shall
be paid by the Company;
34
(B) the issuance and sale by the Company of any series of
First Mortgage Bonds with an interest rate, a prepayment premium,
prepayment terms or other business or financial terms which are
different from the business or financial terms of the Bonds, so long
as such issuance and sale and all such terms are in compliance with
all applicable provisions of the Indenture concerning issuance of
additional series of First Mortgage Bonds;
(C) the redemption of any First Mortgage Bonds pursuant to
their respective terms so long as such redemption is not conditioned
upon the giving by any holder of any First Mortgage Bond of any waiver
or consent; or
(D) the payment or giving by the Company of consideration to
all holders of First Mortgage Bonds of any series in exchange for the
waiver, elimination or reduction of a right contained only in the
First Mortgage Bonds of such series, so long as the payment or giving
of such consideration does not violate any provision of the Indenture,
and so long as, immediately after giving effect to the payment of such
consideration and such waiver, elimination or reduction, no Event of
Default would exist;
nor shall any provision of this Section 6.2(b) entitle the holders of the
Bonds to receive payments or other consideration equal or equivalent to the
payments or other consideration made or given pursuant to clauses (A), (C)
or (D), or to receive any right or benefit afforded to the holders of any
other series of First Mortgage Bonds pursuant to clause (B) above, to which
the holders of the Bonds would not otherwise be entitled.
(c) BINDING EFFECT.
Except as provided in Section 6.2(b) hereof, any amendment or waiver consented
to as provided in this Section 6.2 shall apply equally to all holders of
Bonds and shall be binding upon them and upon each future holder of any
Bond and upon the Company whether or not such Bond shall have been marked
to indicate such amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon.
6.3 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed; (b) documents received by you at the closing of your purchase of the
Bonds (except the Bonds
35
themselves); and (c) financial statements, certificates and other information
previously or hereafter furnished to you; may be reproduced by you by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that any such reproduction will be admissible
in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction will
likewise be admissible in evidence.
6.4 SURVIVAL.
All warranties, representations, certifications and covenants made by you in
Section 1.3 of this Agreement, and made by the Company or by the Parent and
contained in this Agreement or in any certificate or other instrument executed
and delivered by the Company or the Parent, as the case may be, pursuant to this
Agreement in connection with the Closing, will be considered to have been relied
upon by you (if made by the Company or the Parent) or the Company (it made by
you), will be deemed made on and as of the Closing Date and will survive the
delivery to you of the Bonds and the payment by you of the purchase price,
regardless of any investigation made by or on behalf of you or the Company, as
the case may be. All statements in any such certificate or instrument made by
the Company or the Parent will constitute warranties and representations by the
Person executing such certificate or instrument.
6.5 SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding upon the successors
and assigns of each of the parties. The provisions of this Agreement are
intended to be for the benefit of all holders, from time to time, of Bonds, and
will be enforceable by any such holder, whether or not an express assignment to
such holder of rights under this Agreement has been made by you or your
successor or assign.
6.6 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPARTS.
Two or more duplicate originals of this Agreement may be signed by the parties,
each of which will be an original but all of which together will constitute one
and the same instrument. This Agreement may be executed in one or more
counterparts and will be effective when at least one counterpart has been
executed by each party hereto, and each set of counterparts which, collectively,
show execution by each party hereto will constitute one duplicate original.
6.7 CONSTRUCTION - REPRESENTATIONS AND WARRANTIES.
The Parent is entering into this Agreement for the sole purpose of providing the
representations and warranties set forth in Sections 2.3(a), 2.4(a), 2.12(a) and
(b), and,
36
to the extent such representations and warranties relate to the
Parent, Section 2.10 and Section 2.18, and the Parent shall not be liable in
connection with any other Sections of this Agreement other than Section 6.4 as
it relates to the above-referenced sections.
6.8 SEVERABILITY.
Any provision of this Agreement which shall be determined by a court of
competent jurisdiction to be invalid , void or illegal, or invalid, void or
illegal as to any particular facts or circumstances, shall in no way (a) affect,
impair or invalidate such provision in any other facts or circumstances or (b)
affect, impair or invalidate any other provision hereof. Such provision shall
remain in full force and effect as to such other facts and circumstances and all
such other provisions shall remain in full force and effect.
6.9 INCORPORATION BY REFERENCE.
All exhibits and annexes attached to this Agreement are hereby incorporated into
and made a part of this Agreement by this reference.
THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY THE NEXT PAGE IS
THE SIGNATURE PAGE
37
If this Agreement is satisfactory to you, please so indicate by signing the
acceptance at the foot of a counterpart of this Agreement and return such
counterpart to the Company, whereupon this Agreement will become binding between
us in accordance with its terms.
Very truly yours,
NEW MEXICO UTILITIES, INC., a New Mexico corporation
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: V.P. Finance
The undersigned hereby joins in the foregoing Agreement for the sole
purpose described in Section 6.7 and to provide the representations and
warranties which are ascribed to Southwest Water Company by the provisions of
Section 2 and such section.
SOUTHWEST WATER COMPANY, a Delaware corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V.P. Finance, CFO Title: President
Agreed to and Accepted: AMERITAS LIFE INSURANCE CORP.,
By Ameritas Investment Advisors, Inc.,
its Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President - Fixed Income Securities
Agreed to and Accepted: WOODMEN ACCIDENT AND LIFE
COMPANY
By /s/ ▇. ▇▇▇▇
Title: Vice President and Assistant Treasurer
38
SIGNATURE PAGE to the BOND PURCHASE AGREEMENT, dated as of
November 8,1996, among NEW MEXICO UTILITIES, INC., SOUTHWEST WATER
COMPANY, AMERITAS LIFE INSURANCE CORP., and
WOODMEN ACCIDENT AND LIFE COMPANY
39
ANNEX 1
INFORMATION AS TO PURCHASERS
================================================================================
Purchaser Name AMERITAS LIFE INSURANCE CORP.
--------------------------------------------------------------------------------
Name in Which AMERITAS LIFE INSURANCE CORP.
Bond is Registered
--------------------------------------------------------------------------------
Bond B-1
Registration Number, Principal $2,000,000.00
Amount
--------------------------------------------------------------------------------
Payment on Account of Bond:
Method Federal Funds Wire Transfer (Immediately
Available Funds)
Account First Bank of Nebraska,
Information NA ABA No.: ▇▇▇-▇▇▇-▇▇▇
Ameritas Life Insurance Corp.
Account No.: 1-494-0070-0188 Re:
New Mexico Utilities, Inc.
Series B 7.64% First Mortgage Bonds
--------------------------------------------------------------------------------
Accompanying Name of Company: New Mexico Utilities,
Information Inc.
Description of Security: First Mortgage
Bonds, Series B 7.64% due November 7, 2006
Security Number (CUSIP): 64744# AB 9
Application (as among principal, premium and
interest) of the payment being made.
--------------------------------------------------------------------------------
Address for Ameritas Life Insurance Corp.
Notices Related 5900 "O" Street
to Payments and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
all Other Notices: Attention: ▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Annex1-1
--------------------------------------------------------------------------------
Deliver Bonds Ameritas Life Insurance Corp.
5900 "O" Street
To: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Tax ▇▇-▇▇▇▇▇▇▇
Identification Number
================================================================================
2
ANNEX 1
INFORMATION AS TO PURCHASERS
====================================================================================================================================
Purchaser Name WOODMEN ACCIDENT AND LIFE COMPANY
COMPANY
------------------------------------------------------------------------------------------------------------------------------------
Name in Which WOODMEN ACCIDENT AND LIFE COMPANY
Bond is Registered COMPANY
------------------------------------------------------------------------------------------------------------------------------------
Bond B-2
Registration Number, $2,000,000.00
Principal Amount
------------------------------------------------------------------------------------------------------------------------------------
Payment on
Account of Bond:
Method Federal Funds Wire Transfer (Immediately
Available Funds)
Account First Bank Nebraska, NA 13
Information and ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA #▇▇▇▇-▇▇▇-▇▇ for
credit to:
Woodmen Accident and Life
Company's General Fund
Account No. 1-494-0092-9092
------------------------------------------------------------------------------------------------------------------------------------
Accompanying Name of Company: New Mexico Utilities,
Inc.
Information: Description of Security: First Mortgage Bonds, Series B
7.64% due November 7, 2006
Security Number (CUSIP): 64744# AB 9
Application (as among principal, premium and interest) of
the payment being made.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Address for Woodmen Accident and Life Company
Notices Related to Payments ▇.▇. ▇▇▇ ▇▇▇▇▇
and all Other Notices: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Division
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Notices delivered by overnight courier shall be addressed
to:
Woodmen Accident and Life Company
▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Division
-----------------------------------------------------------------------------------------------------------------------------------
Deliver Bonds Woodmen Accident and Life Company
To: ▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Division
------------------------------------------------------------------------------------------------------------------------------------
Tax ▇▇-▇▇▇▇▇▇▇
Identification Number
====================================================================================================================================
ANNEX 2
PAYMENT INSTRUCTIONS
Make payment of the purchase price by federal funds wire transfer in
immediately available funds to:
▇▇▇▇▇ Fargo Bank, National Association
ABA #▇▇▇▇▇▇▇▇▇
Flair Industrial Park Regional
Commercial Banking ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account of New Mexico Utilities, Inc.
Account No. 6627-351786
Annex 2-1
ANNEX 3
INFORMATION AS TO COMPANY
Part I: Affiliates
Name Jurisdiction Percent Owned; Owned By
---- of Incorporation --------
----------------
*Southwest Water Company Delaware N/A
*ECO Resources, Inc. Texas 100% by Southwest
Water Company
*Southwest Environmental Texas 100% by ECO Resources,
Laboratories, Inc. Inc.
*SOCI, Inc. Delaware 100% by Southwest
Water Company
Covina Irrigating Company California 12.3% by Suburban
Water Systems; 0/9% by
SW Resource Management
Company
California Domestic Water California 32.4% by Suburban
Company Water Systems
*Suburban Water Systems California 100% by Southwest
Water Company
*SW Resource Management Delaware 100% by Southwest
Company Water Company
*SW Operating Services Delaware 100% by Southwest
Water Company
*Water Suppliers Mobile California 100% by Suburban Water
Communication Service Systems
*Southern Municipal Texas 100% by ECO Resources,
Services, Inc. Inc.
Annex 3-1
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
Part II: Indebtedness for Borrowed Money
First Mortgage Bonds, Series A 8.86%, Due March 12, 2002 $2,000,000.00
Unsecured Line of Credit with Sunwest Bank of Albuquerque $4,000,000.00
First Mortgage Bonds, Series B 7.64%, Due November 7, 2006 $4,000,000.00
------------
Total $10,000,000.00(1)
_______________
(1) Proceeds of the Series B Bonds will be used to retire debt to Sunwest Bank.
Part III: ERISA
ERISA Affiliates
----------------
Each of the Persons indicated with an asterisk (*) in Part I of this Annex
3 are ERISA Affiliates.
Multiemployer Plans and Multiple Employer Pension Plans
-------------------------------------------------------
1. The Utility Employees Retirement Plan
2. The Profit-Sharing 401(k) Plan for Southwest Water Company's Related
Companies
Part IV: Environmental Disclosure
The Company has received no notice, summons, citation, directive, letter or
communication from any Governmental Authority concerning any environmental
matter of the three types described in Section 2.20.
Sparton Technology, Inc. ("Sparton") owns a manufacturing facility at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (the "Sparton Plant"). From 1961
Annex 3-2
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
through ▇▇▇▇, ▇▇▇▇▇▇▇ manufactured commercial, industrial and military
electronic components at the Sparton Plant. Waste solvents containing heavy
metals were stored at the Sparton Plant in concrete ponds (through 1975) and in
lined surface impoundments.
The Environmental Protection Agency (the "EPA") and the City of Albuquerque
(the "City") have determined that the containment vehicles used by Sparton at
the Sparton Plant leaked, resulting in the creation of an underground plume
containing heavy metals in the vicinity of the Sparton Plant. The EPA, the City
and Sparton have conducted various studies and tests, including installation of
numerous monitor ▇▇▇▇▇ to determine the level of groundwater contamination and
the movement of such contamination.
The Company has been advised by the EPA that the Sparton plume is
dispersing or migrating to the northwest at a rate of approximately 100 lineal
feet per year. The closest Company Well is located approximately 2.62 miles or
approximately 13,850 feet from the Sparton Plant and more than two miles from
the closest boundary of the Sparton plume, as such boundary has been estimated
by the EPA and the City.
Based on the foregoing information provided to the Company, the Company
believes that the Sparton plume does not pose a danger to the Company's ▇▇▇▇▇ in
the foreseeable future. Moreover, if the Sparton plume were to affect the water
produced by the Company's ▇▇▇▇▇, the Company believes that it could avoid a
contamination problem by extended such ▇▇▇▇▇ below the level of the plume and
pumping uncontaminated water. In the normal course of its business, the Company
samples and tests water produced from its ▇▇▇▇▇ for the presence of, among other
things, heavy metals. To date, the Company's tests indicate that no heavy
metals are present in water produced by the Company at levels requiring action
by the Company.
Part V: Restricted Third Party Encumbrances.
The following easements, referenced by the number beside which they are
described in Exhibit A to the Indenture, contain the respective size water and
sewer lines shown beside the number of such easement in the chart below.
Annex 3-3
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
================================================================================
The Easement numbered as follows on Exhibit A to Is used by the Company to
the Indenture Support Water or Sewer
Lines of the Following
Sizes:
================================================================================
47 21" sewer
--------------------------------------------------------------------------------
48 6" water
--------------------------------------------------------------------------------
49 6" water
--------------------------------------------------------------------------------
50 6" water
--------------------------------------------------------------------------------
51 12" water
--------------------------------------------------------------------------------
52 8" sewer
--------------------------------------------------------------------------------
53 12" sewer
--------------------------------------------------------------------------------
54 12" water
--------------------------------------------------------------------------------
55 6" water
--------------------------------------------------------------------------------
56 6" water
--------------------------------------------------------------------------------
73 20" water
--------------------------------------------------------------------------------
74 8" sewer
--------------------------------------------------------------------------------
90 8" sewer
--------------------------------------------------------------------------------
91 12" water
--------------------------------------------------------------------------------
92 8" water
--------------------------------------------------------------------------------
93 8" water
================================================================================
The foregoing easement numbered 47 contains a sewer line which serves
an apartment complex and no other customers of the Company. Such sewer line is
not owned by the Company, but is rather owned and maintained by the owner of the
apartment complex and is located in land previously owned by Horizon
Corporation. The sewer line located in number 47 ties into a sewer main operated
by the Company. In the event that the rights to the easement numbered 47 were
foreclosed or otherwise terminated pursuant to the terms of any Restricted Third
Party Encumbrance encumbering the Property over which such easement was granted,
and the holder of such Restricted Third Party Encumbrance or its successor in
interest were to take action to prevent the use of the Property, the Company
might be unable to provide sewer service to such apartment complex, but no other
water or sewer service of the Company would be affected. The fact that any such
action would prevent the Company from supplying sewer service to such apartment
complex would likely cause
Annex 3-4
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
the owner of such complex to grant to or obtain for the benefit of the Company a
replacement easement to enable the Company to provide sewer service to such
complex.
The foregoing easements numbered 48 through 56, inclusive, other than
the water line in number 51 (which is a transmission line), supply water and
sewer service solely to the fee parcels over which such easements were granted.
Such fee parcels comprise one shopping center. The water and sewer service
provided through these easements, other than the waterline in number 51 (which
is a transmission line), supply only such shopping center, and do not supply
water or sewer service to any other parcels. If the rights of the Company
pursuant to easements 48-50 and 52-56 were foreclosed or otherwise terminated
pursuant to the terms of any Restricted Third Party Encumbrance encumbering the
Property over which such easements were granted, and the holder of such
Restricted Third Party Encumbrance or its successor in interest were to take
action to prevent the Company from using the Property, the Company might be
unable to supply water or sewer service to all or some portion of such shopping
center, but no other water or sewer service of the Company would be affected.
If the rights of the Company pursuant to easement 51 were foreclosed or
otherwise terminated pursuant to the terms of Any Restricted Third Party
Encumbrance encumbering the Property over which such easement was granted, and
the holder of such Restricted Third Party Encumbrance or its successor in
interest were to take action to prevent the Company from using the Property, the
Company might be unable to supply water or sewer service to all or some portion
of such shopping center. However, due to water and sewer line loops owned by
the Company and in place around the perimeter of the shopping center, the loss
of use of the lines in easement number 51 would not interfere with water or
sewer service of the Company to customers other than those in the shopping
center. Moreover, the fact that any such action (i.e., prevention of the
Company's use of easements 48 through 56) would prevent the Company from
supplying water and/or sewer service for the benefit of the fee parcels
encumbered or held by the holder(s) of such Restricted Third Party Encumbrance
would likely deter such Person from taking such action.
The foregoing easement number 73 contains a portion of a main water
supply line through which water is supplied to numerous other parcels served by
the Company. In the event that the rights of the Company pursuant to such
easement were foreclosed or otherwise terminated pursuant to the terms of any
Restricted Third Party Encumbrance encumbering the Property over which such
easement was granted,
Annex 3-5
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
and the holder of such Restricted Third Party Encumbrance or its successor in
interest were to take action to prevent the Company from using the Property, the
Company has an alternate water main through which it can supply water to the
parcels served by the portion of the water line located in easement Property 73.
Such alternate water main is in place, in service and is currently being used.
Such alternate water main could be used in place of the portion of the water
main located in easement 73 without any significant interruption in service or
any substantial additional cost or expense to the Company. Any minor
interruption or additional cost incurred by the Company from use of the
alternate water main would not have a material adverse effect upon the business,
profits, Properties (taken as a whole) or condition (financial or other) of the
Company or the ability of the Company to consummate the Transactions or perform
its obligations set forth in this Agreement, the Bonds or the Indenture.
The foregoing easement numbered 74 contained a small sewer line
serving one customer. Such line is no longer in service. A grammar school has
been constructed, in part, on the Property in which easement 74 is located. In
connection with the construction of such school, the Company ceased using such
line, removed such line and relocated the line to another easement area. The
most recent plat of the area containing the Property in which easement 74 is
located depicts easement 74 as abandoned. Accordingly, termination of such
easement as the result of foreclosure or other termination pursuant to the terms
of any Restricted Third Party Encumbrance encumbering the Property which
contains easement 74 will have no adverse effect upon the Company (i.e.,
business, profits, Properties or condition) or the ability of the Company to
consummate the Transactions or perform its obligations set forth in the Bond
Purchase Agreement, the Bonds or the Indenture.
The foregoing easement numbered 90 contains an 8" sewer line which
serves a portion of a residential subdivision. It connects such subdivision to
a main sewer line operated by the Company. The 8" sewer line has been in use by
the Company for more than 20 years. The area described in the easement grant
creating such easement is also depicted on a recorded plat of the subdivision as
a utility easement for sewer line purposes. The 8" sewer line is located
entirely within the easement area as described in such grant of easement and as
depicted on such plat. The Company is not aware of anyone having any right or
alleged right to terminate the Company's right to use such 8" sewer line.
Annex 3-6
ANNEX 3
INFORMATION AS TO COMPANY (CONT.)
The foregoing easements numbered 91 through 93 were granted in 1961.
Originally, easement area 91 contained a 12" water main which ran a length of
approximately 1 1/2 miles to serve the sole industrial customer of the Company,
Spartan Industries. Such line has, with the development of a shopping center
along such line, been largely replaced by a new line which is not located in
such easement. Such new line serves all customers along the length of the line
other than Spartan Industries. Approximately 500 feet of such original line
remains in easement 91. Such 500 feet of the original line serves only one
customer, Spartan Industries, and will not be used by the Company to serve any
future customers. Easement 92 and 93 contain an 8 "water line which connects to
the 12" water line in easement area 91 and runs past Spartan Industries to a
connection with another water main operated by the Company. Although service to
Spartan Industries is currently provided through the water line in easement area
91, the Company can, with no interruption in service and no additional cost to
the Company, also provide service to Spartan Industries through the water line
in easement areas 92 and 93.
The Company is not aware of anyone having any right or alleged right
to terminate the Company's right to use either the line in easement area 91 or
the line in easement areas 92 and 93. As described above, if the Company's right
to use either line were terminated in any manner, the Company can serve Spartan
Industries without interruption in service or additional cost to the Company
from the other line. If the Company's rights to use both lines were terminated,
the Company would not be able to serve Spartan Industries, but such termination
would not affect service provided by the Company to any other customers.
Termination of service to Spartan Industries would not have a material adverse
effect upon the business, profits, Properties (taken as a whole) or condition
(financial or other) of the Company or the ability of the Company to consummate
the Transactions or perform its obligations set forth in this Agreement, the
Bonds or the Indenture.
Annex 3-7
EXHIBIT B1
FORM OF COMPANY'S LEGAL OPINION
[Letterhead of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Closing Date]
Ameritas Life Insurance Corp. Woodmen Accident and Life Company
5900 "O" Street 1526 "K" Street
Lincoln, Nebraska 68510-6970 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: $4,000,000 Series B First Mortgage Bonds of New Mexico Utilities, Inc.
Ladies and Gentlemen:
We have acted as counsel to New Mexico Utilities, Inc. (the "Company"), a
New Mexico corporation and to Southwest Water Company, a Delaware corporation
("Southwest"), in connection with the Bond Purchase Agreement (the "Bond
Purchase Agreement"), dated as of November 8, 1996, between the Company,
Southwest and each of you, as Purchasers, which Bond Purchase Agreement
provides, among other things, for the sale by the Company of its First Mortgage
Bonds, Series B 7.64%, due November 7, 2006 (the "Series B Bonds") in the
aggregate principal amount of $4,000,000 issued under and pursuant to an
Indenture of Mortgage dated February 14, 1992 (the "Original Indenture"),
between the Company and Sunwest Bank of Albuquerque, National Association, as
trustee (the "Trustee"), as amended by a certain First Supplement to Indenture
of Mortgage (the "First Supplemental Indenture") dated as of May 15, 1992,
between the Company and the Trustee and a certain Second Amendment and
Supplement to Indenture of Mortgage (the "Second Supplemental Indenture") dated
as of October 21, 1996, between the Company and the Trustee. The Original
Indenture, First Supplemental Indenture and Second Supplemental Indenture are
herein sometimes referred to, collectively, as the "Indenture." The Company's
parent, Southwest, has also executed the Bond Purchase Agreement for the limited
purpose of making certain representations and warranties contained therein.
This opinion is rendered to you pursuant to Section 3.1(a) of the Bond
Purchase Agreement. As counsel to the Company and Southwest, we are not opining
as to matters of New Mexico law or matters involving the New Mexico Public
Utility
B1-1
Commission (the "PUC "). Messrs. ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A. ("M&A") have acted
as special counsel to the Company with respect to such matters and are
delivering to you a separate opinion of even date herewith. Capitalized terms
used in this opinion and not defined herein shall have the respective meanings
ascribed to them in, or pursuant to the provisions of, the Bond Purchase
Agreement or the Indenture.
The Indenture grants to the holders of the Company's first mortgage bonds
from time to time issued thereunder (collectively, the "First Mortgage Bonds"),
including the Series B Bonds, a security interest in certain property of the
Company, more particularly described in the Indenture, consisting of both (i)
real property and real property interests, including, in each case, fixtures,
other than Excepted Property, as described in the Indenture (the "Real
Property"), and (ii) personal property, other than Excepted Property, as
described in the Indenture (the "Personal Property"). Prior to the delivery of
this letter, an executed recorded counterpart of the Indenture was on file in
the Clerk's office of Bernalillo County, New Mexico. At our direction, an
executed counterpart of the Indenture was also filed, as a financing statement,
in the office of the Secretary of State of the State of New Mexico. Also at our
direction, a commitment for title insurance dated September 27, 1996 (the "Ticor
Report") was prepared by Ticor Title Insurance Company ("Ticor") covering the
state of the title in and to that Real Property subject to the Lien of the
Indenture (other than certain parcels noted on Exhibit "A" to the Original
Indenture as not insured), including the Real Property added to the Lien of the
Indenture by the Second Supplemental Indenture.
A bondholder's policy of title insurance dated March 11, 1992 was received
from Ticor to insure the Trustee and the holder of the Outstanding Bonds under
the Indenture against loss or damage to the extent of an aggregate of $2,000,000
plus costs, if any, as allowed by said policy, by reason of any defect in the
Lien of the Indenture on the Real Property described therein or by reason of the
title to such Real Property described in the Indenture being other than as shown
in such policy. Further, in connection with the recordation of the Second
Supplemental Indenture and the issuance of the Series B Bonds, we have ordered a
new policy of title insurance to insure the Trustee and the holder of all of the
First Mortgage Bonds (including the Series B Bonds) against loss or damage to
the extent of $6,000,000 in the event of any defect in the Lien of the Indenture
on the Real Property or by reason of the title to the Real Property being other
than as shown in such policy and endorsements. We have received assurance
satisfactory to us from Ticor that the aforementioned policy of title
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insurance has been committed prior to the delivery of this opinion letter, in
accordance with our orders. Copies of such commitment have been furnished to
each of you. A New Mexico Form UCC-1 Financing Statement, as amended by New
Mexico Form UCC-3 Financing Statements adding certain property added to the Lien
of the Indenture by the Second Supplemental Indenture and renewing the Form UCC-
1 Financing Statement (with the Form UCC-1 Financing Statement, the "Financing
Statement") describing the personal property in which a security interest was
granted to the Trustee pursuant to the Indenture, including the Second
Supplemental Indenture, is also on file with the Secretary of State of New
Mexico and is on file as a fixture filing in the Clerk's office of Bernalillo
County, New Mexico.
As counsel for the Company and Southwest, we have prepared or participated
in the preparation of the Bond Purchase Agreement, the Second Supplemental
Indenture, the Series B Bonds and the Financing Statement (collectively, the
"Documents") and various certificates and other documents executed and delivered
in connection therewith. In each instance, we have reviewed executed copies of
such documents and each of the executed and authenticated Series B Bonds or have
otherwise received assurances satisfactory to us that such documents have been
executed, and in the case of the Series B Bonds, authenticated, prior to the
delivery of this letter, by each entity whose signature or authentication is
provided for therein.
In our examination, we have assumed the genuineness of all signatures
(other than those of officers of the Company and Southwest) on the Documents,
the authenticity of all Documents submitted to us as originals, the conformity
to authentic original Documents of all Documents submitted to us as copies and
the legal capacity of all natural persons executing the Documents.
We have been furnished with and with your consent have relied upon,
certificates of officers of the Company and Southwest with respect to certain
factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
Except as provided in paragraph 1, we are opining herein as to the effect
on the subject transaction only of the federal laws of the United States and the
internal laws of the State of California, and we express no opinion with respect
to the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any local
agencies within any state.
B1-3
Whenever a statement herein is qualified by "to the best of our knowledge"
or a similar phrase, it is intended to indicate that those attorneys in this
firm who have rendered legal services in connection with the sale of the Series
B Bonds do not have current actual knowledge of the inaccuracy of such
statement. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of any such
statement, and no inference that we have any knowledge of any matters pertaining
to such statement should be drawn from our representation of the Company or
Southwest.
We have also, with your consent, relied, for the purposes of our opinion
set forth in paragraph 3 below, on a letter to the Company, to you and to us,
from SSP Hambro & Co., LLC and ▇▇▇▇▇ Fargo Bank, confirming the warranty
contained in Section 2.15 of the Bond Purchase Agreement, and the
representations contained in Sections 1.3 and 2.15 of the Bond Purchase
Agreement.
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:
1. Based upon representations by the Company to us that the Company does
not own any property in, does not maintain an office in and does not conduct any
business in any state other than New Mexico, the Company is not required to
qualify to do business as a foreign corporation in any jurisdiction.
2. The Series B Bonds conform to the requirements of the Indenture.
3. The offer, issuance, sale and delivery of the Series B bonds in the
principal amount of $4,000,000 in accordance with the provisions of the Bond
Purchase Agreement constitute an exempt transaction under the Securities Act of
1933, as amended (the "Act"), and under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and neither the Act nor the Trust Indenture
Act requires registration of the Series B Bonds or qualification of the
Indenture.
4. The Company has complied with all conditions precedent to the
issuance, sale and delivery of the Series B Bonds imposed by the provisions of
the Indenture.
5. The Company is not a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
B1-4
company" of a "holding company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
6. The Company is not, and is not directly or indirectly controlled by,
or acting on behalf of any Person which is, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
7. Neither the issuance of the Bonds nor the intended use of the proceeds
of the Bonds (as set forth in Section 2.13 of the Bond Purchase Agreement) will
violate Regulations G, T or X of the Federal Reserve Board.
8. The Bond Purchase Agreement has been duly ratified and approved by all
necessary corporate action of Southwest's Board of Directors and has been duly
executed and delivered by officers of Southwest thereunto duly authorized by
proper corporate action of Southwest's Board of Directors. No action by the
stockholders of Southwest is required by law, by the Certificate of
Incorporation of Southwest or by the By-Laws of Southwest for the authorization,
execution and delivery of the Bond Purchase Agreement.
In rendering our opinion as to the lack of any requirement that the
Company qualify as a foreign corporation in any jurisdiction in paragraph 1
above, we have relied on a certificate of officers of the Company to the effect
set forth in the first sentence of such paragraph and have performed no
independent investigation concerning the representation of the Company to us.
In rendering our opinions set forth in paragraphs 5, 6 and 7 above, we
have also relied as to certain factual matters on a certificate of officers of
the Company.
To the extent that the obligations of the Company may be dependent upon
such matters, we assume for purposes of this opinion that: all parties to the
Documents other than the Company and Southwest are duly formed, validly existing
and in good standing under the laws of their respective jurisdictions of
formation; all parties to the Documents other than the Company and Southwest
have the requisite power and authority to execute and deliver the Documents and
to perform their respective obligations under the Documents to which they are a
party; and the Documents to which such parties other than the Company and
Southwest are a party have been duly authorized, executed and delivered by such
parties and constitute their legally valid and binding obligations, enforceable
against them in accordance with their terms. We
B1-5
express no opinion as to compliance by any parties to the Documents with any
state or federal laws or regulations applicable to the subject transactions
because of the nature of their businesses.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent. At your request, we hereby consent to reliance hereon by the Trustee
and by M&A, delivery of this opinion to or reliance upon this opinion by any
governmental authorities having regulatory jurisdiction over you and delivery of
this opinion to or reliance upon this opinion by any Holder of the Series B
Bonds who becomes a Holder in compliance with the provisions of the Bond
Purchase Agreement and the Indenture. Reliance upon this opinion by any
governmental authority or successor holder of Series B Bonds is subject to the
provisos that this opinion speaks only as of the date hereof and to its
addressees and that we have no responsibility or obligation to update this
opinion, to consider its applicability or correctness to other than its
addressee, or to take into account changes in law, facts or any other
development of which we may later become aware.
Very truly yours,
B1-6
EXHIBIT B2
FORM OF COMPANY'S SPECIAL COUNSEL'S CLOSING OPINION
[Letterhead of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Closing Date]
Ameritas Life Insurance Corp. Woodmen Accident and Life Company
5900 "O" Street 1526 "K" Street
Lincoln, Nebraska 68510-6970 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: New Mexico Utilities, Inc.
$4,000,000 First Mortgage Bonds, Series B
Ladies and Gentlemen:
We have been engaged as special counsel to New Mexico Utilities, Inc. (the
"Company"), a New Mexico corporation, for purposes of rendering certain opinions
under New Mexico law in connection with the Bond Purchase Agreement (the "Bond
Purchase Agreement"), dated as of November 8, 1996, between the Company, joined
for certain purposes by Southwest Water Company, a Delaware corporation
("Southwest"), and each of you, as Purchasers, which Bond Purchase Agreement
provides, among other things, for the sale by the Company of its First Mortgage
Bonds, Series B, due November 7, 2006 (the "Series B Bonds") in the aggregate
principal amount of $4,000,000 issued under and pursuant to an Indenture of
Mortgage (the "Original Indenture"), dated as of February 14, 1992, between the
Company and Sunwest Bank of Albuquerque, National Association, as trustee (the
"Trustee"), as amended by a certain First Supplement to Indenture of Mortgage
(the "First Supplemental Indenture") dated as of May 15, 1992, between the
Company and the Trustee and a certain Second Supplement to Indenture of Mortgage
(the "Second Supplemental Indenture") dated as of October 21, 1996, between the
Company and the Trustee. The Original Indenture, First Supplemental Indenture
and Second Supplemental Indenture are herein sometimes referred to,
collectively, as the "Indenture." The Indenture grants to the holders of the
Company's first mortgage bonds from time to time issued thereunder, including
the Series B Bonds, a security interest in certain property, whether presently
owned or hereafter acquired, of the Company, more particularly described in the
Indenture, consisting of both real
B2-1
property and real property interests, including, in each case, fixtures, other
than Excepted Property, as described (the "Real Property"), and personal
property, other than Excepted Property, as described (the "Personal Property").
We were also engaged to represent the Company in certain proceedings before the
New Mexico Public Utility Commission (the "PUC") regarding the issuance and sale
of the Series B Bonds and related transactions. The terms used in our opinion
and not defined herein shall have the respective meanings ascribed to them in,
or pursuant to the provisions of the Bond Purchase Agreement or the Indenture.
In the course of our engagement, we have reviewed executed copies of the
Bond Purchase Agreement, the Indenture, the Financing Statements and various
certificates and other documents executed and delivered in connection therewith,
and each of the executed and authenticated Series B Bonds, prior to the delivery
of this letter, by each entity whose signature is provided for therein.
We have also made such legal and factual examinations and inquiries,
including an examination of originals or copies certified or otherwise
identified to our satisfaction as being true copies, of such instruments,
corporate records and other documents as we have deemed necessary or appropriate
for the purposes of this opinion.
As to factual matters and the authentication of instruments and other
documents relevant to the opinions expressed below, we have, with your consent,
relied upon certificates of public officials and officers of the Company,
without conducting independent investigations with respect thereto.
In addition, we have, with your consent, relied upon certain other matters
as described below in rendering certain of the opinions set forth below. We
express no opinion as to the application of the laws of any State other than New
Mexico, nor as to the application or requirements of any federal securities laws
or regulations.
On the basis of the foregoing and in reliance thereon and on such other
matters as are hereinafter specified, we are of the opinion that, as of the date
hereof:
9. The Company is a corporation duly incorporated, legally existing, and
in good standing under the laws of the State of New Mexico and has all requisite
corporate power and authority to execute and deliver the Bond Purchase Agreement
and the Indenture, to issue, sell and deliver the Series B Bonds, to perform its
obligations pursuant to the Bond Purchase Agreement, the Series B Bonds and the
▇▇-▇
▇▇▇▇▇▇▇▇▇, to carry on its business as now conducted by it in the State of New
Mexico, and to own the Real Property and the Personal Property which it now
owns.
10. The Indenture has been duly authorized by proper corporate action of
the Company's Board of Directors and has been duly executed and delivered on
behalf of the Company by its duly authorized officers. The Indenture
constitutes a legal, valid and binding instrument of the Company enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by (i) the laws of the State of New Mexico (where the property covered
thereby is situated) affecting the remedies for the enforcement of the liens and
security interests provided for therein, which laws in our opinion do not make
inadequate the remedies necessary for the realization of the benefits of such
security; (ii) bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights; and (iii) general principles of equity. The Real Property
now owned by the Company has been subjected to the terms of the New Mexico Deed
of Trust Act (N.M. Stat. ▇▇▇. (S)(S) 48-10-1 et seq.) by the Indenture, and,
-- ---
subject to continuing compliance with the requirements of that act, the Trustee
has a power of sale under which such Real Property may be sold as provided in
the act. No action by the stockholder of the Company is required by law, by the
Articles of Incorporation of the Company or by the By-Laws of the Company for
the authorization, execution and delivery of the Indenture.
11. The Bond Purchase Agreement has been duly authorized by proper
corporate action of the Company's Board of Directors and has been duly executed
and delivered on behalf of the Company by its duly authorized officers. Except
to the extent that enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating
to or affecting the enforcement of creditors' rights, and (ii) general
principles of equity, the Bond Purchase Agreement constitutes a legal, valid and
binding instrument of the Company enforceable in accordance with its terms. No
action by the stockholder of the Company is required by law, by the Articles of
Incorporation of the Company or by the By-Laws of the Company for the
authorization, execution and delivery of the Bond Purchase Agreement.
12. The Series B Bonds in the aggregate principal amount of $4,000,000
being purchased on the date hereof have been duly authorized by proper corporate
action of the Company's Board of Directors, have been duly executed and
delivered on behalf of the Company by its authorized officers, have been duly
issued by the
B2-3
Company and have been duly authenticated by the Trustee under the Indenture, and
the obligations of the Company represented by the Series B Bonds are legal,
valid and binding obligations of the Company which are enforceable in accordance
with their terms, except to the extent that enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general application relating to or affecting the enforcement of creditors'
rights, and (ii) general principles of equity. Subject to the qualifications in
paragraph 2, above, with respect to the enforceability of the Indenture, the
Series B Bonds are entitled to the benefit and security of the Indenture,
equally and ratably with all First Mortgage Bonds of other series which may from
time to time be issued pursuant to and secured by the Indenture in accordance
with the terms thereof, except as to any sinking, amortization, improvement, or
other analogous fund established in accordance with the provisions of the
Indenture.
13. Neither (a) the execution and delivery by the Company of the Bond
Purchase Agreement or the Indenture; nor (b) the granting to the Trustee of
liens upon certain collateral pursuant to the provisions of the Indenture; nor
(c) the execution, delivery, issue and sale of the Series B Bonds; nor (d)
compliance by the Company with the terms of the Series B Bonds, the Indenture
and the Bond Purchase Agreement (all such transactions referred to in clauses
(a) through (d), inclusive, of this paragraph 5 being hereinafter referred to as
the 'Transactions") will conflict with, or result in any breach of any of the
provisions of, or constitute a default under, or result in the creation or
imposition of any lien (other than the lien of the Indenture) upon, any of the
Real Property or Personal Property of the Company pursuant to (i) the provisions
of the Articles of Incorporation or By-Laws of the Company; (ii) any agreement
or other instrument, known to us after due inquiry, to which the Company is a
party or by which it or any of its Property is bound; (iii) any New Mexico law,
statute, regulation or ordinance; or (iv) any order, judgment, award or decree,
known to us after due inquiry of the Company (no independent search of court
records having been made) of any court or arbitrator against or affecting the
Company or any of its property.
14. The Indenture is in due form for recording and has been duly filed for
record as a mortgage on the Real Property in each and every public office in
which such recording is a prerequisite to the establishing of record of the lien
thereof on the Real Property therein specifically described which is now owned
by the Company. All taxes and fees required to be paid with respect to the
execution and recording of the Indenture and the issuance of the Series B Bonds
have been paid. The Indenture will
B2-4
not have to be refiled, reregistered or redeposited to continue the lien in and
upon the Real Property now owned by the Company and specifically described
therein or the effectiveness of such lien as against any subsequent transferee
of the Real Property specifically described therein.
15. The Indenture constitutes a valid mortgage lien on the Real Property
now owned by the Company which is specifically or generally described in the
granting clauses of the Indenture as being subject to the lien thereof and which
is located in Bernalillo County, New Mexico. We express no opinion as to the
attachment of the lien of the Indenture on Real Property acquired after the date
and time of recording. The opinion in this paragraph is given in partial
reliance on Title Insurance Policy No. 34-4042-61-001004 dated March 11, 1992,
and issued by Ticor Title Insurance Company ("Ticor"), and upon the written
commitment of Ticor dated September 27, 1996 that all requirements for the
issuance of a new policy of title insurance to increase the amount of coverage
to $6,000,000, to extend the coverage under such policy to certain Real Property
added to the lien of the Indenture by the Second Supplemental Indenture and to
extend the coverage of such policy to the Series B Bonds have been satisfied.
16. The provisions of the Indenture are effective to create a valid
security interest in favor of the Trustee in the Personal Property of the
Company. The Indenture, as a financing statement, or a separate financing
statement in respect of the Personal Property (the term "Financing Statement"
referring to either or both as the case may be) has been duly filed or recorded
in each and every public office in which such filing and/or recording is a
prerequisite to the establishing of record of the lien of the Indenture on all
of the Personal Property therein specifically described which is owned by the
Company. Based upon the issuance and sale by the Company to you prior to the
delivery of this letter of the Series B Bonds and your concurrent delivery of
the consideration provided for in the Bond Purchase Agreement, pursuant to the
provisions of the Indenture the Trustee has a valid, perfected security interest
in the Personal Property presently owned by and in the possession of the Company
or hereafter acquired by the Company. Our opinion as to perfection, however, is
expressly limited to those items and types of the Personal Property as to which
perfection is accomplished by the filing of a financing statement in accordance
with the Uniform Commercial Code--Secured Transactions (N.M. Stat. ▇▇▇. (S)(S)
9-101 et seq. (1978)) as in effect in New Mexico ("UCC Article 9"). Such
-- ---
security interest is, in the case of after-acquired Personal Property, subject
to purchase money security interests and acquisition by the Company of rights in
and possession of such Personal
B2-5
Property. Except for the timely filing of continuation statements as required by
UCC Article 9 and the filing of appropriate amendments to the Financing
Statements required by changes in circumstances, it is not necessary to refile
the Financing Statements or to file new financing statements to maintain the
perfection of the security interests in the Personal Property.
Based upon the assumptions and subject to the limitations set forth in this
paragraph, insofar as such security interest relates to that portion of the
Personal Property which is personal property owned and possessed by the Company
as of the date hereof and located in the State of New Mexico and, in the case of
fixtures, in Bernalillo County, New Mexico, such security interest will have
priority over all other security interests in any of such Personal Property
which may be perfected under UCC Article 9 by filing with the New Mexico
Secretary of State or the County Clerk of Bernalillo County, New Mexico, a
financing statement covering such Personal Property subsequent to the date
hereof, except as such priority is or may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws or case decisions
relating to or affecting the enforcement of the rights of creditors generally.
The opinions in this paragraph 8 are, as to Personal Property acquired after the
date of this letter, expressly subject to pre-existing liens and encumbrances.
Such opinions are also given in reliance upon a certificate of an officer of the
Company to the effect that all of such Personal Property has been continuously
located in the State of New Mexico since at least May 8, 1996, and that no other
security interest in any of such Personal Property exists by a certificate of
title or ownership issued under the laws of any state other than New Mexico. In
addition, in giving such opinions we have relied, in part, upon a certificate
from an officer of the Company to the effect that the Company has not, during
the period from May 8, 1996 to the date hereof, created any "purchase money
security interest," as defined in UCC Article 9 (N.M. Stat. ▇▇▇. (S)(S) 55-9 -
107 (1978)) in any portion of the Personal Property. Finally, we have relied on
the reports of UCC and other lien searches provided to us by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
and we are relying upon the accuracy of such reports as to the absence of filing
of any financing statements or notices against the Company except as shown in
such reports. We have made no independent examination of the public records and
indices covered by such reports and consequently express no opinion as to the
priority of the Trustee's security interest under the Indenture as against the
interest of any other secured party which, prior to the filing of the Financing
Statements, filed a financing statement or notice not reported in such reports.
B2-6
17. All consents, approvals or authorizations, if any, of or by any
Governmental Authority required on the part of the Company in connection with
the consummation of the Transactions have been duly obtained, and the Company
has complied with all applicable provisions of law requiring any designation,
declaration, filing, registration or qualification with any Governmental
Authority in connection with the Transactions.
18. All approvals and consents of the PUC required for the valid issuance
and sale of the Series B Bonds, the valid execution and delivery of the Bond
Purchase Agreement by the Company, the valid execution and delivery of the
Second Supplemental Indenture by the Company pursuant to and in accordance with
the terms and conditions of the Bond Purchase Agreement and the Indenture, the
granting to the Trustee of liens upon certain collateral, in each case, pursuant
to the provisions of the Second Supplemental Indenture, and the compliance by
the Company with the terms of the Series B Bonds, the Indenture and the Bond
Purchase Agreement have been obtained and have become effective. All appeal
periods applicable to the effectiveness of such approvals and consents have
expired. There is in effect no stop order or other order of the PUC denying,
suspending or revoking the effectiveness of any such approvals and consents, and
no proceedings for such purposes are pending or, to our knowledge, threatened
before the PUC.
19. There is no litigation or proceeding, known to us after due inquiry of
the Company (no independent search of court records having been made), pending
or threatened against the Company not disclosed in the Bond Purchase Agreement
or the financial statements of the Company which have been furnished to you
pursuant thereto in which a judgment, order or award is likely that could be
materially adverse to the Company or that could affect the ability of the
Company to consummate the Transactions or perform its obligations under the Bond
Purchase Agreement or the Indenture.
20. The Company has complied with all conditions precedent to the
consummation of the Transactions imposed by law.
21. To the best of our knowledge, the Company is not in violation of any
applicable federal, state or other law or regulation which would have a material
adverse effect on the business of the Company.
B2-7
The certificates of officers or other representatives of the Company upon
which we have relied which are referred to in this opinion are being delivered
to you in connection with the closing proceedings.
To the extent that the obligations of the Company may be dependent upon
such matters, we have assumed for the purposes of our opinions that the Bond
Purchase Agreement has been duly authorized, executed and delivered by each of
you and constitutes your respective legal, valid and binding obligation
enforceable in accordance with its terms; and that each of you has the requisite
corporate or other organizational power and authority to perform your respective
obligations under the Bond Purchase Agreement. For the purposes of our opinions
we have also relied upon the opinion of counsel to the Trustee to the effect
that the Second Supplemental Indenture has been duly executed and delivered by
the Trustee, that the Trustee has the requisite corporate or other
organizational power and authority to perform its obligations under the
Indenture, and that the Trustee has duly authenticated the Series B Bonds under
the Indenture.
We note specifically that certain of the representations and warranties
made to you or in your favor contained in the Bond Purchase Agreement have been
made by Southwest rather than by the Company itself. In our view, the fact that
such representations and warranties have been made by Southwest rather than the
Company will not affect our opinions as to the validity or enforceability of the
Bond Purchase Agreement or the Indenture or prevent the exercise by the Trustee
of the remedies afforded to it by the Indenture upon a default arising from the
breach of any representation or warranty made by Southwest in the Bond Purchase
Agreement. Such opinion is based, in part, upon the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
of even date to the effect that the Bond Purchase Agreement has been ratified
and approved by proper corporate action of Southwest's board of directors and
has been duly executed and delivered on behalf of Southwest by its duly
authorized officers.
This letter is provided to you solely in connection with the transactions
described herein and may not be published or disseminated in any way without our
prior written consent; the foregoing shall not, however, preclude reliance upon
this opinion by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, delivery of this opinion to or reliance upon
this opinion by any governmental authorities having regulatory jurisdiction over
you or delivery of this opinion to or reliance upon this opinion by any Holder
of the Series B Bonds who becomes a Holder in compliance with the provisions of
the Bond Purchase Agreement and the Indenture.
B2-8
Very truly yours,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇▇▇ ▇. ▇▇▇▇
B2-9
EXHIBIT B3
FORM OF TRUSTEE COUNSEL'S CLOSING OPINION
[Letterhead of Modrall, Sperling, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.]
[Closing Date]
Ameritas Life Insurance Corp. Woodmen Accident and Life Company
5900 "O" Street 1526 "K" Street
Lincoln, Nebraska 68510-6970 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: $4,000,000 First Mortgage Bonds, Series B 7.64%, Due November 7, 2006
of New Mexico Utilities, Inc.
Ladies and Gentlemen:
We have acted as counsel to Sunwest Bank of Albuquerque, National
Association, a national banking association, (the "Trustee"), in connection with
its appointment as trustee, registrar and paying agent with respect to the
Series B Bonds (as defined below), pursuant to that certain Indenture of
Mortgage dated as of February 14, 1992, by and between New Mexico Utilities,
Inc. (the "Company") and the Trustee (the "Original Indenture"), as amended by a
certain First Supplement to Indenture of Mortgage (the "First Supplemental
Indenture") dated as of May 15, 1992, between the Company and the Trustee and a
certain Second Supplement to Indenture of Mortgage (the "Second Supplemental
Indenture") dated as of October 21, 1996, between the Company and the Trustee.
The Original Indenture, First Supplemental Indenture and Second Supplemental
Indenture are herein sometimes referred to, collectively, as the "Indenture."
Pursuant to that certain Bond Purchase Agreement (the "Bond Purchase
Agreement"), dated as of November 8, 1996, among the Company, Southwest Water
Company, a Delaware corporation, Ameritas Life Insurance Corp. and Woodmen
Accident and Life Company (the "Purchasers"), the Company proposes to issue and
sell to the Purchaser an aggregate of $4,000,000 of the Company's First Mortgage
Bonds, Series B 7.64%, due November 7, 2006 (the First Mortgage Bonds of such
series being referred to as the "Series B Bonds") pursuant to the Indenture.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the Indenture.
B3-1
This opinion is being delivered to you pursuant to Section 3.1 of the Bond
Purchase Agreement.
In connection with the foregoing, we have examined the following:
(i) the Bond Purchase Agreement;
(ii) the Indenture;
(iii) The Series B Bonds, dated the date hereof, numbered B-1 and B-2, each
in the principal amount of $2,000,000 and each registered in the name of one of
the Purchasers (the "Bonds");
(iv) the Articles of Association and By-Laws of the Trustee;
(v) resolutions of the Trustee with respect to signing authority;
and such records and proceedings of the Trustee, agreements or other
instruments, certificates of public officials and of officers of the Trustee and
such other instruments and documents as we have deemed necessary as a basis for
the opinions expressed herein. As to certain questions of fact material to such
opinions which we have not independently verified, we have relied upon the
representations and warranties of the Trustee set forth in the Certificate of
Trustee dated as of November 8, 1996 (a copy of which is attached to this
opinion), as if such representations and warranties were made directly to us.
Except as to the execution on behalf of the Trustee of the various closing
documents executed in connection with the issuance of the Bonds, we have assumed
the due execution by properly authorized signatories of all documents submitted
to us, the genuineness of all signatures shown on such documents and the
conformity to the originals of documents submitted to us as copies.
In delivering this opinion, we have relied upon the following assumptions
(neither of which has been independently verified by us):
A. The parties to the Indenture, other than the Trustee, have the power,
right and legal authority to execute and deliver, and have duly authorized,
executed and delivered, the Indenture.
B. All permits, consents, authorization, certificates, approvals or
licenses of, and registrations and declarations with, any governmental authority
of any state,
B3-2
other than required of the Trustee by the laws of the State of New Mexico,
governing or necessary for the execution, delivery, validity and enforceability
of the Indenture, and the performance by the respective parties to the Indenture
of the transactions contemplated thereby, which are required to be obtained have
been obtained.
Based upon the foregoing and in reliance thereon and subject to the
qualifications set forth below, we are of the opinion that:
22. The Trustee is a duly chartered and validly existing national banking
association having trust powers. By virtue of its standing as a national
banking association with trust powers, the Trustee is authorized to exercise
corporate trust powers in the State of New Mexico.
23. The Trustee has duly authorized the acceptance of the trusts
contemplated by the Indenture, and the Indenture has been duly executed and
delivered by duly authorized officers of the Trustee.
24. The Trustee has full right, power and authority to perform its
obligations as Trustee under the Indenture, including without limitation the
authentication of the Bonds, and neither the execution and delivery by the
Trustee, nor performance of the Indenture or authentication of the Bonds by the
Trustee will conflict with, or result in a breach of, the provisions of the
Trustee's Articles of Association or Bylaws.
25. The Bonds have been duly authenticated by duly authorized officers of
the Trustee.
26. No governmental consent, authorization or approval which has not been
obtained is required from federal or New Mexico banking authorities in
connection with the execution and delivery of the Indenture by the Trustee, or
the performance under the Indenture or authentication of the Bonds by the
Trustee.
27. The Indenture constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms, except as
such enforceability may be limited by:
(a) applicable bankruptcy, reorganization, arrangement, insolvency,
liquidation, conservatorship, moratorium or similar laws affecting the
enforcement of creditors' rights generally as at the time in effect;
B3-3
(b) principles of equity and the availability of equitable remedies;
and
(c) common law or statutory requirements with respect to commercial
reasonableness.
We express no opinion as to the availability of equitable remedies against
the Trustee, including specific performance and injunctive relief, under or
pursuant to the Indenture. We express no opinion as to the enforceability of any
indemnification provisions in the Indenture.
This opinion is delivered to you solely for use, as described in the
initial two paragraphs hereof, by you in connection with the issuance of the
Series B Bonds and may not be used or relied upon by you for any other purpose
or by any person or entity other than you. Except for the use permitted herein,
this letter is not to be quoted or reproduced in whole or in part or otherwise
referred to in any manner, nor is it to be filed with any governmental agency
(other than as may be required by a Court or regulatory authority having
jurisdiction over you or any successor in interest to you) or delivered to any
other person without our prior written consent. This opinion speaks only as of
its date and is based upon and limited to the laws of the State of New Mexico
and federal laws as of the date hereof; we assume no responsibility to notify
you of any subsequent changes in such laws or of any circumstance or event which
may occur after the date hereof that affects or could possibly affect the
opinions expressed herein or to otherwise supplement such opinions to reflect
any such changes in such laws or the occurrence of any circumstance or event
after the date hereof.
Very truly yours,
B3-4
EXHIBIT C1
FORM OF COMPANY OFFICERS' CERTIFICATE
NEW MEXICO UTILITIES, INC.
CERTIFICATE OF OFFICERS
We, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each hereby certify that we
are, respectively, the President and the Vice President/Finance of NEW MEXICO
UTILITIES, INC. (the "Company"), a New Mexico corporation, and that, as such, we
are authorized to execute and deliver this Certificate in the name and on behalf
of the Company, and hereby further certify as follows:
28. This certificate is being delivered pursuant to Section 3.4(a) of the
Bond Purchase Agreement (the "Bond Purchase Agreement"), dated as of November
8,1996, among the Company, Southwest Water Company, a Delaware corporation,
Ameritas Life Insurance Corp. and Woodmen Accident and Life Company (the
"Purchasers"). The terms used in this Certificate and not defined herein shall
have the respective meanings ascribed to them in the Bond Purchase Agreement.
29. The warranties and representations made by the Company contained in
Section 2 of the Bond Purchase Agreement are true in all material respects on
the date hereof.
30. The Company has not taken any action or permitted any condition to
exist that would constitute a Default or Event of Default.
31. The Company has performed and complied with all agreements and
conditions contained in the Bond Purchase Agreement that are required to be
performed or complied with by the Company before or at the date hereof.
32. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is, on and as of the date hereof, and at all times
subsequent to October, 1995 has been, the duly elected, qualified and acting
Secretary of the Company, and the signature appearing on the Certificate of
Secretary dated the date hereof and delivered to the Purchaser contemporaneously
herewith is his genuine signature.
IN WITNESS WHEREOF, we have executed this Certificate in the name and on
behalf of the Company as of November 8, 1996.
NEW MEXICO UTILITIES, INC.
C1-1
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President/Finance
C1-2
EXHIBIT C2
FORM OF PARENT OFFICERS' CERTIFICATE
SOUTHWEST WATER COMPANY
CERTIFICATE OF OFFICERS
We, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ each hereby certify that we are,
respectively, the President and the Vice President/Finance of SOUTHWEST WATER
COMPANY ("Southwest"), a Delaware corporation, and that, as such, we are
authorized to execute and deliver this Certificate in the name and on behalf of
Southwest, and hereby certify as follows:
33. This certificate is being delivered pursuant to Section 3.4(b) of the
Bond Purchase Agreement (the "Bond Purchase Agreement"), dated as of November 8,
1996, among New Mexico Utilities, Inc., a New Mexico corporation, Southwest,
Ameritas Life Insurance Corp. and Woodmen Accident and Life Company (the
"Purchasers").
34. The warranties and representations made by Southwest contained in
Section 2 of the Bond Purchase Agreement are true in all material respects.
35. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is, on and as of the date hereof, the duly elected,
qualified and acting Secretary of Southwest, and the signature appearing on the
Certificate of Secretary of Southwest dated the date hereof and delivered to the
Purchaser contemporaneously herewith is his genuine signature.
IN WITNESS WHEREOF, we have executed this Certificate in the name and on
behalf of Southwest as of November 8, 1996.
SOUTHWEST WATER COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President/Finance
C2-1
EXHIBIT D1
FORM OF COMPANY SECRETARY'S CERTIFICATE
NEW MEXICO UTILITIES, INC.
CERTIFICATE OF SECRETARY
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, hereby certify that I am the duly elected, qualified
and acting Secretary of NEW MEXICO UTILITIES, INC., a New Mexico corporation
(the "Company"); that, as such, I have access to its corporate records and am
familiar with the matters herein certified; that I am authorized to execute and
deliver this Certificate in the name and on behalf of the Company; and hereby
further certify as follows:
36. This certificate is being delivered pursuant to Section 3.4(c) of the
Bond Purchase Agreement (the "Bond Purchase Agreement"), dated as of November 8,
1996, among the Company, Southwest Water Company, a Delaware corporation,
Ameritas Life Insurance Corp. and Woodmen Accident and Life Company (the
"Purchasers). The terms used in this Certificate and not defined herein shall
have the respective meanings ascribed to them in the Bond Purchase Agreement.
37. Attached hereto as Attachment A is a true and correct copy of
resolutions, and the preamble thereto, adopted by the Board of Directors of the
Company on October 17, 1996, and such resolutions and preamble set forth in
Attachment A hereto were duly adopted by said Board of Directors and are in full
force and effect on and as of the date hereof, not having been amended, altered
or repealed, and such resolutions are filed with the records of the Board of
Directors.
38. The documents listed below were executed and delivered by the Company
pursuant to and in accordance with the resolutions set forth in Attachment A
hereto and said documents as executed are substantially on the terms submitted
to and approved by the Board of Directors of the Company as aforementioned:
(a) the Bond Purchase Agreement;
(b) the Series B Bonds; and
(c) the Second Supplemental Indenture.
39. Attached hereto as Attachment B is a true, correct and complete copy
of the bylaws of the Company as in full force and effect on and as of the date
hereof, which bylaws were last
D1-1
amended by the Board of Directors of the Company on, and have been in full
effect in said form at all times from and after March 29, 1996, to and including
the date hereof, without modification or amendment in any respect.
40. Each of the following named persons is on and as of the date hereof,
and at all times subsequent to May 21, 1996, has been a duly elected, qualified
and acting officer of the Company holding the office or offices set forth below
opposite his name:
NAME OFFICE SIGNATURE
---- ------ ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ President /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President/Finance /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and Secretary
41. The signature appearing opposite the name of each such person set
forth above is his genuine signature.
42. Attached hereto as Attachment C is a true, correct and complete copy
of the Certificate of Incorporation of the Company together with all amendments
thereto, as currently in effect. There have been no amendments or supplements to
or restatements of the Certificate of Incorporation of the Company since June
13, 1979.
43. The seal set forth beside my name below is the true corporate seal of
the Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of the Company as of November 8, 1996.
NEW MEXICO UTILITIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
[Corporate Seal]
D1-2
ATTACHMENT A
RESOLUTIONS OF THE
BOARD OF DIRECTORS
NEW MEXICO UTILITIES, INC.
[TO FOLLOW.]
Attachment A-1
ATTACHMENT B
Bylaws of the Company
[To be supplied by Company.]
Attachment B-1
ATTACHMENT C
Certificate of Incorporation of the Company
[To be supplied by Company.]
Attachment C-1
EXHIBIT D2
FORM OF COMPANY SECRETARY'S CERTIFICATE
SOUTHWEST WATER COMPANY
CERTIFICATE OF SECRETARY
I, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, hereby certify that I am the duly elected,
qualified and acting Secretary of SOUTHWEST WATER COMPANY, a Delaware
corporation ("Southwest"); that, as such, I have access to its corporate records
and am familiar with the matters herein certified; that I am authorized to
execute and deliver this Certificate in the name and on behalf of Southwest; and
hereby further certify as follows:
44. This certificate is being delivered pursuant to Section 3.4(d) of the
Bond Purchase Agreement (the "Bond Purchase Agreement"), dated as of November
8,1996, among New Mexico Utilities, Inc., a New Mexico corporation, Southwest,
Ameritas Life Insurance Corp. and Woodmen Accident and Life Company (the
"Purchasers"). The terms used in this Certificate and not defined herein shall
have the respective meanings ascribed to them in the Bond Purchase Agreement.
45. Attached hereto as Attachment A is a true and correct copy of
resolutions, and the preamble thereto, adopted by the Board of Directors of the
Company on October 17, 1996, and such resolutions and preamble set forth in
Attachment A hereto were duly adopted by said Board of Directors and are in full
force and effect on and as of the date hereof, not having been amended, altered
or repealed, and such resolutions are filed with the records of the Board of
Directors. Southwest has executed and delivered, for the purpose of making
certain representations, the Bond Purchase Agreement pursuant to and in
accordance with such resolutions.
46. Attached hereto as Attachment B is a true, correct and complete copy
of the bylaws of Southwest as in full force and effect on and as of the date
hereof, which bylaws were last amended by the Board of Directors of Southwest
on, and have been in full effect in said form at all times from and after June
27, 1995 to and including the date hereof, without modification or amendment in
any respect.
47. Each of the following named persons is on and as of the date hereof a
duly elected, qualified and acting officer of Southwest holding the office or
offices set forth below opposite his name:
D2-1
NAME OFFICE SIGNATURE
---- ------ ---------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Vice President/Finance, /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
and Secretary
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Corporate Controller /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
48. The signature appearing opposite the name of each such person set
forth above is his genuine signature.
49. Attached hereto as Attachment C is a true, accurate and complete copy
of the Certificate of Incorporation of Southwest, together with all amendments
thereto, as currently in effect. There have been no amendments or supplements to
or restatements of the Certificate of Incorporation of Southwest since May 1,
1995.
50. The seal set forth beside my name below is the true corporate seal of
Southwest.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of Southwest as of November 8, 1996.
SOUTHWEST WATER COMPANY
[Corporate Seal]
Secretary
D2-2
ATTACHMENT A
RESOLUTIONS OF THE
BOARD OF DIRECTORS
OF SOUTHWEST
[To be supplied by Southwest.]
Attachment A-1
ATTACHMENT B
Bylaws of Southwest
[To be supplied by Southwest.]
Attachment B-1
ATTACHMENT C
Certificate of Incorporation of Southwest
[To be supplied by Southwest.]
Attachment C-1
NEW MEXICO UTILITIES, INC.
_________________________
BOND PURCHASE AGREEMENT
_________________________
Dated as of November 8 1996
$4,000,000
First Mortgage Bonds, Series B 7.64%, Due November 7, 2006
TABLE OF CONTENTS
Page
----
SECTION 1. PURCHASE AND SALE OF BONDS................................. 1
1.1 Issue of Bonds............................................. 1
1.2 The Closing................................................ 2
1.3 Certain Purchaser Representations.......................... 3
1.4 Failure To Deliver; Failure of Conditions.................. 4
1.5 Expenses................................................... 4
SECTION 2. WARRANTIES AND REPRESENTATIONS............................. 5
2.1 Subsidiaries............................................... 5
2.2 Corporate Organization and Authority....................... 5
2.3 Business, Property and Indebtedness........................ 6
2.4 Financial Statements; Material Adverse Change.............. 6
2.5 Full Disclosure............................................ 7
2.6 Pending Litigation......................................... 7
2.7 Title to Properties........................................ 8
2.8 Patents, Trademarks, Licenses, etc......................... 8
2.9 Authorization, Execution, Delivery and Enforceability...... 8
2.10 No Defaults................................................ 9
2.11 Governmental Consent....................................... 9
2.12 Taxes...................................................... 10
2.13 Use of Proceeds............................................ 10
2.14 Public Utility Holding Company Act......................... 10
2.15 Private Offering........................................... 11
2.16 Compliance with Law........................................ 11
2.17 Restrictions on Company.................................... 11
2.18 ERISA...................................................... 12
2.19 Investment Company Act..................................... 14
2.20 Environmental Compliance................................... 14
2.21 Private Placement Number................................... 15
2.22 Restricted Third-Party Encumbrances........................ 15
SECTION 3. CLOSING CONDITIONS......................................... 16
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3.1 Opinions of Counsel........................................ 16
3.2 Warranties and Representations True; No Prohibited Action.. 16
3.3 Compliance with This Agreement............................. 17
3.4 Officers' Certificates..................................... 17
3.5 Legality................................................... 17
3.6 Regulatory Approvals....................................... 17
3.7 Both Purchasers............................................ 18
3.8 Liens Upon Collateral...................................... 18
3.9 Title Insurance............................................ 18
3.10 Indenture Conditions....................................... 18
3.11 Proceedings Satisfactory................................... 19
SECTION 4. AGREEMENTS OF THE COMPANY.................................. 19
4.1 Financial and Business Information......................... 19
4.2 Officers' Certificates..................................... 22
4.3 Accountants' Certificates.................................. 23
4.4 Inspection................................................. 23
4.5 Report to NAIC............................................. 23
SECTION 5. INTERPRETATION OF THIS AGREEMENT........................... 24
5.1 Terms Defined.............................................. 24
5.2 Accounting Principles...................................... 28
5.3 Directly or Indirectly..................................... 29
5.4 Governing Law.............................................. 29
5.5 Section Headings, Table of Contents and Construction....... 29
SECTION 6. MISCELLANEOUS.............................................. 29
6.1 Notices.................................................... 29
6.2 Amendment and Waiver....................................... 30
6.3 Reproduction of Documents.................................. 32
6.4 Survival................................................... 33
6.5 Successors and Assigns..................................... 33
6.6 Duplicate Originals; Execution in Counterparts............. 33
6.7 Construction - Representations and Warranties.............. 33
6.8 Severability............................................... 34
6.9 Incorporation by Reference................................. 34
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Annex 1 -- Information as to Purchaser
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Company
Exhibit A -- First Mortgage Bond, Series B 7.64%, Due November 7, 2006
Exhibit B1 -- Form of Company Counsel's Closing Opinion
Exhibit B2 -- Form of Company's Special Counsel's Closing Opinion
Exhibit B3 -- Form of Trustee Counsel's Closing Opinion
Exhibit C1 -- Form of Officers' Certificate of the Company
Exhibit C2 -- Form of Officers' Certificate of the Parent
Exhibit D1 -- Form of Secretary's Certificate of the Company
Exhibit D2 -- Form of Secretary's Certificate of the Parent
Exhibit E -- Form of Indenture
iii
EXHIBIT A
FORM OF FIRST MORTGAGE BOND, SERIES B 7.64%, DUE NOVEMBER 7,
2006
NEW MEXICO UTILITIES, INC.
FIRST MORTGAGE BOND
SERIES B 7.64%, DUE NOVEMBER 7, 2006
$2,000,000.00
No. B-1
PPN ▇▇. ▇▇▇▇▇# ▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ UTILITIES, INC., a corporation organized under the laws of the
State of New Mexico (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to AMERITAS LIFE INSURANCE CORP., or registered
assigns, on November 7, 2006, the sum of TWO MILLION DOLLARS ($2,000,000.00) (or
so much thereof as shall not have been paid upon prior redemption) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months)
thereon from the later of the initial issuance of the series of Bonds of which
this Bond is a part, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on the 10th day of
each May and November in each year commencing on the first Interest Payment Date
next succeeding the date of this Bond until the principal amount thereof will be
due and payable; provided that interest on any overdue principal, overdue
Redemption Price, and (to the extent permitted by applicable law) overdue
installments of interest, shall accrue at a rate equal to the lesser of (a) the
highest rate allowed by applicable law, or (b) 8.64% per annum. In no event
shall the interest payable on this Bond (including any interest on overdue
interest or any overdue Redemption Price) exceed the maximum amount which the
Holder hereof may legally collect under the then applicable usury law. In the
event that it is hereinafter determined by a court of competent Jurisdiction
that the interest payable under this Bond (including any interest on overdue
interest or any overdue Redemption Price) is in excess of the amount which the
Holder hereof may legally collect under the then applicable usury law, then (i)
all interest actually paid (including any interest on overdue interest or any
overdue Redemption Price) in excess of the maximum amount legally collectible by
such Holder shall be applied to the payment of principal of this Bond or, if all
principal shall previously have been paid, promptly repaid by such Holder to the
Company and (ii) interest on this Bond (including any interest on overdue
interest or any overdue Redemption Price) subsequent to the date of such
determination shall be reduced to the maximum amount which it is determined that
the Holder may collect under the then applicable usury law.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in said Indenture, be paid to the Person
(the "Registered Holder") in whose name this Bond (or one or more Predecessor
Bonds, as defined in said Indenture) is registered at the close of business on
the Regular Record Date for such interest, which shall be the fifteenth (15th)
day (whether or not a Business Day) of the calendar month next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Registered Holder on
such Regular Record Date, and may be paid to the Person in whose name this Bond
(or one or more Predecessor Bonds) is registered at the close of business on a
Special Record Date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof being given to Bondholders not less than four (4) days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Bonds of this series shall be listed, if any, and upon such notice
as shall be required by such exchange, all as more fully provided in said
Indenture. The Trustee shall give notice of such Special Record Date and pay or
arrange for payment of such defaulted interest as promptly as possible following
receipt of or availability of funds for such purpose.
The principal and the Redemption Price of, and the interest on, this Bond
shall be payable by crediting, before 12:00 noon, New York time, by federal
funds bank wire transfer, the account of the Registered Holder hereof in any
bank in the United States as may be designated in a written notice delivered to
the Company by such Registered Holder, or in such other manner as may be
directed, or to such other address in the United States as may be designated, in
writing delivered to the Company, by such Registered Holder. All such payments
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
If any payment due on, or with respect to, this Bond shall fall due on a
day other than a Business Day, then such payment shall be made on the first
Business Day following the day on which such payment shall have so fallen due;
provided that if all or any portion of such payment shall consist of a payment
of interest, for purposes of calculating such interest, such payment shall not
be deemed to have been originally due on such first following Business Day, and
such interest shall accrue and be payable only to the Interest Payment Date.
This Bond is one of a duly authorized issue of Bonds of the Company
designated as its "First Mortgage Bonds" (herein called the "Bonds"), issued and
to be issued in one or more series under, and all equally and ratably secured
by, an Indenture of Mortgage and Deed of Trust, dated February 14, 1992, between
the Company and Sunwest Bank of Albuquerque, National Association, as Trustee
(herein called the "Trustee," which term includes any
successor Trustee), as amended and supplemented by that certain First Amendment
and Supplement to Indenture of Mortgage dated February 14, 1992, dated May 15,
1992, between the Company and the Trustee, and further amended and supplemented
by that certain Second Amendment and Supplement to the Indenture of Mortgage
(the "Second Supplemental Indenture") dated October 21, 1996, between the
Company and the Trustee, (such Indenture of Mortgage and Deed of Trust, as so
amended to and including the date hereof, being herein called the "Indenture")
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the properties thereby mortgaged, pledged and
assigned, the nature and extent of the security, the respective rights
thereunder of the Holders of the Bonds, the Trustee and the Company and the
terms upon which the Bonds are, and are to be, authenticated and delivered.
Capitalized terms not otherwise defined herein are defined as provided in the
Indenture.
As provided in the Indenture, the Bonds are issuable in series which may
vary as in the Indenture provided or permitted. This Bond is one of the series
specified in its title.
This Bond is subject to redemption in whole, at any time, and in part, from
time to time, before its maturity in the following events and in the manner
provided in Article V and Section 16.03 (as added by the Second Supplemental
Indenture) of the Indenture:
(1) at any time after issuance, at the option of the Company
evidenced by a Board Resolution at a Redemption Price equal to 100% of the
principal amount of this Bond to be redeemed, together with the Applicable Make-
Whole Amount (as defined below) and interest accrued to the Redemption Date, and
on a Redemption Date specified by the Company as provided in Section 5.02 of the
Indenture; and
(2) from Major Event Proceeds, at a Redemption Price equal to 100% of
the principal amount of this Bond to be redeemed, together with interest accrued
to the Redemption Date, and on a Redemption Date that is the first date for
which notice of redemption can be given by the Trustee as provided in Article V
of the Indenture; provided, however, that such redemption may only be made if
this Bond is redeemed pro rata with all other Outstanding Bonds of whatever
series.
It is provided in the Indenture that Bonds of this series of a denomination
larger than $10,000.00 may be redeemed in part ($10,000.00 or a multiple
thereof) and that upon any partial redemption of any such Bond the same may, but
are not required to be, surrendered in exchange for one or more new Bonds in
authorized form for the unredeemed portion of principal. Bonds (or portions
thereof as aforesaid) for whose redemption and payment provision is made in
accordance with the Indenture shall thereupon cease to be entitled to the lien
of the Indenture and shall cease to bear interest from and after the date fixed
for redemption.
If an Event of Default, as defined in the Indenture, shall occur, the
principal of the Bonds may become or be declared due and payable in the manner
and with the effect provided in the Indenture whereupon all principal, accrued
interest and the Applicable Make-Whole Amount, if any, shall be due and payable.
"Applicable Make-Whole Amount" at any time shall be equal to the product of
(a) the Make-Whole Amount at such time, times (b) a fraction, the numerator of
which shall be the principal amount of this Bond being prepaid or accelerated at
such time, and the denominator of which shall equal the aggregate principal
amount of all Series B Bonds being prepaid or accelerated at such time.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Bonds under the Indenture at any
time by the Company with the consent of the Holders of 66 2/3% in aggregate
principal amount of the Bonds of each series at the time Outstanding affected by
such modification. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of Bonds at the time
Outstanding on behalf of the Holders of all the Bonds, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Bond issued upon the transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Bond.
No reference herein to the Indenture and no provision of this Bond or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Bond at the times, places and rates, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Bond is transferable on the Bond Register of the Company, upon
surrender of this Bond for transfer at the office or agency of the Company in
Albuquerque, New Mexico, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Bond
Registrar duly executed by the Registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Bonds of the same series,
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Bonds of this series are issuable only as registered Bonds without
coupons in denominations of $1,000.00 or any multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, Bonds of
this series are exchangeable for a like
aggregate principal amount of Bonds of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any transfer or exchange hereinbefore
referred to, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Bond is registered as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Bond shall be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Bond shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed under
its corporate seal.
Dated:
NEW MEXICO UTILITIES, INC.
[SEAL]
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Attest:
This is one of the Bonds of the series designated herein referred to in the
within-mentioned indenture.
SUNWEST BANK OF ALBUQUERQUE, NATIONAL ASSOCIATION,
as Trustee
By: Dated:
Authorized Officer