Exhibit 1.1
ST ACQUISITION CORP.
$275,000,000
10.25% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
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March 31, 2000
CIBC WORLD MARKETS CORP.
CHASE SECURITIES INC.
BARCLAYS CAPITAL INC.
c/o CIBC World Markets Corp.
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Ladies and Gentlemen:
ST Acquisition Corp., a Texas corporation ("Acquisition"), hereby
confirms its agreement with you (the "Initial Purchasers"), as set forth below.
1. The Notes. Subject to the terms and conditions herein contained,
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Acquisition proposes to issue and sell to the Initial Purchasers $275,000,000
aggregate principal amount of its 10.25% Senior Subordinated Notes due 2010 (the
"Notes").
The Notes are being sold in connection with the merger (the "Merger")
of Acquisition with and into TNP Enterprises, Inc., a Texas corporation (the
"Company"), with the Company surviving the Merger pursuant to the Agreement and
Plan of Merger dated as of May 24, 1999 by and among SW Acquisition, L.P. (the
"Partnership"), Acquisition and the Company (as amended through the date hereof
and together with all ancillary agreements entered into in connection therewith,
the "Merger Agreement"). The time of the consummation of the Merger is referred
to herein as the "Effective Time."
The Merger will be financed with the proceeds of (i) a new credit
facility of up to $185.0 million consisting of a $25 million revolving credit
facility and a senior secured term loan of $160 million provided under a Credit
Agreement, dated as of April 7, 2000, among Acquisition, the lenders party
thereto in their capacities as lenders thereunder, Canadian Imperial Bank of
Commerce, as administrative agent, and CIBC World Markets Corp. and Chase
Securities Inc., as co-arrangers and co-book managers (the "Credit Agreement");
(ii) not less than a $100.0 million common equity investment by CIBC World
Markets Corp. and
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certain other investors in the Partnership and the investment by the Partnership
in Acquisition of a portion of such amount which, together with the other
financing, is sufficient to consummate the Merger; (iii) the issuance and sale
of 100,000 shares of Senior Redeemable Preferred Stock of Acquisition (the
"Preferred Stock"); and (iv) the issuance and sale of the Notes. The Merger and
items (i) through (iv) above are sometimes collectively referred to herein as
the "Transactions."
Immediately after the Effective Time, the Company will execute an
assumption agreement (the "Assumption Agreement"), substantially in the form
attached hereto as Exhibit A, pursuant to which (i) the Company, as survivor of
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the Merger, will assume all of the obligations of Acquisition under this
agreement (hereinafter this "Agreement" or the "Purchase Agreement") and (ii)
the Company, as the surviving corporation in the Merger, will assume all of the
obligations of Acquisition under the Note Registration Rights Agreement to be
dated as of April 7, 2000 among the parties hereto (the "Registration Rights
Agreement") pursuant to which Acquisition has agreed, among other things, to
attempt to file (i) a registration statement (the "Registration Statement") with
the Securities and Exchange Commission (the "Commission") registering the Notes
or the Exchange Notes (as defined in the Registration Rights Agreement) under
the Securities Act of 1933, as amended (together with the rules and regulations
of the Commission promulgated thereunder, the "Securities Act") or (ii) a shelf
registration statement pursuant to Rule 415 under the Securities Act relating to
the resale of the Notes by holders thereof or, if applicable, relating to the
resale of Private Exchange Notes (as defined in the Registration Rights
Agreement) by the Initial Purchasers.
The Notes are to be issued pursuant to the Indenture (the
"Indenture"), to be dated as of April 7, 2000, between Acquisition and The Bank
of New York, as trustee (the "Trustee"). Immediately after the Effective Time,
the Company and the Trustee will enter into a first supplemental indenture to
the Indenture (the "First Supplemental Indenture") providing for the express
assumption by the Company, as survivor of the Merger, of the covenants,
agreements and undertakings of Acquisition in the Indenture and under the Notes.
The Company will issue the Notes pursuant to the First Supplemental Indenture.
References to this Agreement as of and after the Effective Time will refer to
this Agreement together with the Assumption Agreement, references to the
Indenture as of and after the Effective Time will refer to the Indenture and the
First Supplemental Indenture, and references to the Registration Rights
Agreement as of and after the Effective Time will refer to the Registration
Rights Agreement together with the Assumption Agreement. The Notes, the
Exchange Notes, the Private Exchange Notes, the Indenture, the Registration
Rights Agreement, the Supplemental Indenture, the Assumption Agreement and this
Agreement are herein collectively referred to as the "Basic Documents" and the
Basic Documents, the Merger Agreement, the Credit Agreement and the statement of
resolution, the purchase agreement and the registration rights agreement
relating to the Preferred Stock are sometimes collectively referred to herein as
the "Transaction Documents."
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The Notes will be offered and sold to the Initial Purchasers without
such offers and sales being registered under the Securities Act, in reliance on
exemptions therefrom.
In connection with the sale of the Notes, Acquisition has prepared a
preliminary offering memorandum dated March 13, 2000 (including the documents
incorporated by reference therein, the "Preliminary Memorandum") and will
prepare a final offering memorandum dated April 4, 2000 (including the documents
incorporated by reference therein, the "Final Memorandum"; the Preliminary
Memorandum and the Final Memorandum each herein being referred to as a
"Memorandum"), each setting forth or including a description of the terms of the
Notes, the terms of the offering of the Notes, a description of the Company and
its subsidiaries and any material developments relating to the Company and its
subsidiaries occurring after the date of the most recent historical financial
statements included therein. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in any Memorandum (or other references of like import) shall be
deemed to include all such financial statements and schedules and other
information which is incorporated by reference in any Memorandum.
Acquisition understands that the Initial Purchasers propose to make an
offering of the Notes only on the terms and in the manner set forth in the
Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable
after this Agreement has been executed and delivered, (i) to persons in the
United States whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act,
as such rule may be amended from time to time ("Rule 144A"), in transactions
under Rule 144A, and outside the United States to certain persons in reliance on
Regulation S under the Securities Act ("Regulation S").
2. Representations and Warranties. Acquisition and, as of the
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Effective Time, the Company, represents and warrants to and agrees with each
Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 2
do not apply to statements or omissions made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished to
Acquisition in writing by any Initial Purchaser through CIBC World Markets
Corp. or Chase Securities Inc. expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto.
The documents incorporated or deemed to be incorporated by reference in any
Memorandum, at the time they were or hereafter are
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filed with the Commission complied and will comply in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the Commission promulgated
thereunder, the "Exchange Act").
(b) Acquisition has been duly incorporated and is validly existing in
good standing as a corporation under the laws of Texas; Acquisition has
been formed for the purpose of consummating the Merger and, except for
transactions relating to its capitalization as described in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum), has not conducted any other business;
Acquisition does not have any subsidiaries or own directly or indirectly
any of the capital stock or other equity or long-term debt securities of or
have any equity interest in any other person; all of the outstanding shares
of capital stock of Acquisition have been duly authorized and validly
issued, are fully paid and nonassessable and were not issued in violation
of any preemptive or similar rights and are owned free and clear of all
liens, encumbrances, equities and restrictions on transferability (other
than those imposed by the Securities Act and the state securities or "Blue
Sky" laws) or voting; except as set forth in the Final Memorandum (or, if
the Final Memorandum is not in existence, the most recent Preliminary
Memorandum), no options, warrants or other rights to purchase from
Acquisition, agreements or other obligations of Acquisition to issue or
other rights to convert any obligation into, or exchange any securities
for, shares of capital stock of or ownership interests in Acquisition are
outstanding and no holder of securities of Acquisition is entitled to have
such securities registered under the Registration Statement; and except as
set forth in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum), there is no agreement,
understanding or arrangement among Acquisition and its stockholders or any
other person relating to the ownership or disposition of any capital stock
of Acquisition or the election of directors of Acquisition or the
governance of Acquisition's affairs, and, if any, such agreements,
understandings and arrangements will not be breached or violated as a
result of the execution and delivery of, or the consummation of the
transactions contemplated by, this Agreement, the other Basic Documents and
the Transaction Documents.
(c) Acquisition has and, immediately after the Effective Time, the
Company will have, all requisite corporate power and authority to execute,
deliver and perform its obligations under the Notes, the Exchange Notes and
the Private Exchange Notes. The Notes, when issued, will be in the form
contemplated by the Indenture and the First Supplemental Indenture. The
Notes, the Exchange Notes and the Private Exchange Notes have each been
duly and validly authorized by Acquisition and, immediately after the
Effective Time, will have been duly and validly authorized by the Company
and, when executed by Acquisition and the Company, as the case may be, and
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authenticated by the Trustee in accordance with the provisions of the
Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement
(assuming the due authorization, execution and delivery thereof by all
other parties thereto), will constitute valid and legally binding
obligations of Acquisition and, immediately after the Effective Time, of
the Company, as the case may be, entitled to the benefits of the Indenture
and enforceable against Acquisition and the Company, as the case may be, in
accordance with their terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally or (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement
is considered in a proceeding at law or in equity) including without
limitation, (a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy, or (b) concepts of
materiality, reasonableness, good faith and fair dealing (collectively, the
"Enforceability Exceptions"); the Notes are in the form contemplated by the
Indenture.
(d) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture has been duly and validly authorized by Acquisition and meets the
requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Immediately after the Effective Time,
the First Supplemental Indenture will have been duly and validly authorized
by the Company. When executed and delivered by Acquisition and the
Company, as applicable, assuming the due authorization, execution and
delivery of the Indenture and the First Supplemental Indenture by the
Trustee, each of the Indenture and the First Supplemental Indenture will
have been duly executed and delivered and, as applicable, will constitute a
valid and legally binding agreement of Acquisition and, immediately after
the Effective Time, the Company, enforceable against Acquisition and,
immediately after the Effective Time, the Company, in accordance with its
terms except that the enforcement thereof may be limited by the
Enforceability Exceptions.
(e) Acquisition has and, at and as of the Effective Time, the Company
will have, all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the transactions
contemplated hereby have been duly and validly authorized by Acquisition
and, at and as of the Effective Time, will have been duly and validly
authorized by the Company. This Agreement has been duly and validly
executed and delivered by Acquisition and constitutes a valid and legally
binding agreement of Acquisition and, at and as of the Effective Time, this
Agreement will constitute a valid and legally binding agreement of the
Company, enforceable against
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Acquisition and, at and as of the Effective Time, the Company, as the case
may be, in accordance with its terms except that the enforcement thereof
may be limited by the Enforceability Exceptions and except as any rights to
indemnity or contribution hereunder may be limited by federal and state
securities laws and public policy considerations.
(f) Acquisition has and, immediately after the Effective Time, the
Company will have, the requisite corporate power and authority to execute,
deliver and perform their respective obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and
validly authorized by Acquisition and (assuming the due authorization,
execution and delivery thereof by the Initial Purchasers), when executed
and delivered by Acquisition, will constitute a valid and legally binding
agreement of Acquisition and, immediately after the Effective Time, the
Company, enforceable against Acquisition and, immediately after the
Effective Time, the Company, in accordance with its terms except that the
enforcement thereof may be limited by the Enforceability Exceptions and
except as any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations. The
Notes, the Indenture and the Registration Rights Agreement conform in all
material respects to the descriptions thereof in the Final Memorandum (or,
if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum).
(g) Immediately after the Effective Time, the Company will have all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Assumption Agreement and to consummate the
transactions contemplated thereby. Immediately after the Effective Time,
the Assumption Agreement and the transactions contemplated thereby will
have been duly and validly authorized by the Company and, when executed and
delivered by the Company, will have been duly executed and delivered by and
will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms except that
the enforcement thereof may be limited by the Enforceability Exceptions.
(h) Acquisition has and, immediately after the Effective time, the
Company will have, the requisite corporate power and authority to execute,
deliver and perform their respective obligations under the other
Transaction Documents to which they are a party. The other Transaction
Documents to which Acquisition or the Company is a party have been duly and
validly authorized by Acquisition and, immediately after the Effective
Time, will have been duly and validly authorized by the Company and, when
executed and delivered by Acquisition and, immediately after the Effective
Time, the Company, will constitute valid and legally binding agreements of
Acquisition and, immediately after the Effective Time, the Company,
enforceable against Acquisition
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and, immediately after the Effective Time, the Company, in each case as
applicable to Acquisition or the Company, in accordance with their terms
except that the enforcement thereof may be limited by the Enforceability
Exceptions and except as any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations. Each of the Transaction Documents conforms in all material
respects to the description thereof in the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Preliminary
Memorandum).
(i) (i) Acquisition has delivered to the Initial Purchasers a true
and correct copy of each of the Transaction Documents that have been
executed and delivered prior to the date of this Agreement and each other
Transaction Document in the form substantially as it will be executed and
delivered on or prior to the Closing Date, together with all related
agreements and all schedules and exhibits thereto, and as of the date
hereof there have been no amendments, alterations, modifications or waivers
of any of the provisions of any of the Transaction Documents since their
date of execution or from the form in which any such Transaction Document
has been delivered to the Initial Purchasers; and (ii) there exists as of
the date hereof (after giving effect to the transactions contemplated by
each of the Transaction Documents) no event or condition that would
constitute a default or an event of default (in each case as defined in
each of the Transaction Documents) under any of the Transaction Documents
that would result in a material adverse effect on the general affairs,
management, business, financial condition, properties or results of
operations of Acquisition or, to the best knowledge of Acquisition, a
material adverse effect on the general affairs, management, business,
financial condition, properties or results of operations of the Company and
its subsidiaries, taken as a whole (any such event, a "Material Adverse
Effect") or materially adversely affect the ability of Acquisition to
consummate the Transactions. All regulatory consents, approvals or
authorizations have been received from the applicable regulatory agencies,
including, without limitation, the Public Utility Commission of Texas and
the New Mexico Public Regulation Commission, permitting the consummation of
the Merger on the Closing Date.
(j) Except as disclosed in, or specifically contemplated by, the
Final Memorandum and assuming compliance by the Initial Purchasers with
their representations and warranties in Section 9, no consent, approval,
authorization, license, qualification, exemption or order of any court or
governmental agency or body or third party is required for the performance
of this Agreement, the Registration Rights Agreement, the Assumption
Agreement, the Notes, the Indenture, the First Supplemental Indenture or
any Transaction Document by Acquisition or the Company, as the case may be,
or for the consummation by Acquisition or the Company, as the case may be,
of any of the transactions contemplated hereby and thereby, or the
application of the proceeds of the issuance of the Notes as described in
the Final Memorandum (or, if the Final Memorandum
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is not in existence, the most recent Preliminary Memorandum), except as has
already been acquired or as may be required under state securities or "Blue
Sky" laws in connection with the purchase and distribution of the Notes by
the Initial Purchasers; all such consents, approvals, authorizations,
licenses, qualifications, exemptions and orders set forth in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) which are required to be obtained by the
Closing Date have been obtained or made, as the case may be, and are in
full force and effect and not the subject of any pending or, to the best
knowledge of Acquisition, threatened attack by appeal or direct proceeding
or otherwise.
(k) Acquisition is not (i) in violation of its articles of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to it or any of its properties or assets, which
breach or violation would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, or (iii) in default (nor has
any event occurred which with notice or passage of time, or both, would
constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in this Agreement, the
Registration Rights Agreement, the Notes, the Indenture or any Transaction
Document or any other contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate
or agreement or instrument to which it is a party or to which it is
subject, which default would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(l) The execution, delivery and performance by Acquisition and,
immediately after the Effective Time, by the Company (to the extent each is
a party thereto) of this Agreement, the Registration Rights Agreement, the
Assumption Agreement, the Notes, the Indenture, the First Supplemental
Indenture and the Transaction Documents and the consummation by Acquisition
and, immediately after the Effective Time, by the Company of the
transactions contemplated hereby and thereby and by the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum) and the fulfillment of the terms hereof and thereof
will not (a) violate, conflict with or constitute or result in a breach of
or a default under (or an event that, with notice or lapse of time, or
both, would reasonably be expected to constitute a breach of or a default
under) any of (i) the terms or provisions of any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which any of
Acquisition, the Company or its subsidiaries is a party or to which any of
their respective properties or assets are subject, (ii) the articles of
incorporation or bylaws of any of Acquisition, the Company or its
subsidiaries (or similar organizational document) or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws) any
statute, judgment, decree, order, rule or regulation of any court or
governmental agency or other
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body applicable to Acquisition, the Company or its subsidiaries or any of
their respective properties or assets or (b) result in the imposition of
any lien upon or with respect to any of the properties or assets now owned
or hereafter acquired by Acquisition, the Company or any of its
subsidiaries, which violation, conflict, breach, default or lien would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; provided, that with respect to the Company and its
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subsidiaries, Acquisition shall be deemed to have made the foregoing
representation to the best of its knowledge.
(m) The audited consolidated financial statements included in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) present fairly the consolidated financial
position, results of operations and cash flows of such entities at the
dates and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis; the summary and selected financial and statistical data
included in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) present fairly the
information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except
as otherwise stated therein; and to the best knowledge of Acquisition,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, which has examined certain of such financial
statements as set forth in its reports included in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum), is an independent public accounting firm as
required by the Securities Act and the Exchange Act.
(n) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum) (A) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the Exchange
Act and (B) have been properly computed on the bases described therein; and
the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(o) Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
there is not pending or, to the best knowledge of Acquisition after due
inquiry and, immediately after the Effective Time, to the best knowledge of
the Company, threatened any action, suit, proceeding, inquiry or
investigation, governmental or otherwise, to which any of
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Acquisition, the Company or its subsidiaries is a party, or to which their
respective properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, that, if determined
adversely to Acquisition, the Company or any such subsidiary would,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the Transactions or the issuance or
sale of the Notes to be sold hereunder or the application of the proceeds
therefrom or the other transactions described in the Final Memorandum (or,
if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum).
(p) Acquisition does not have, and, after giving effect to the
Transactions and the issuance and sale of the Notes, will not have, any
liability for any prohibited transaction (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended ("Code")),
accumulated funding deficiency (as defined in Section 302 of ERISA) or any
complete or partial withdrawal from a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA), with respect to any plan (as defined in
Section 3(3) of ERISA) as to which Acquisition has or could have any direct
or indirect, actual or contingent liability. With respect to any such
plans, Acquisition is, and, after giving effect to the Transactions and the
issuance and sale of the Notes, will be, in compliance in all material
respects with all provisions of the Code and ERISA.
(q) Subsequent to the respective dates as of which information is
given in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) and except as described
therein, (i) Acquisition, the Company and its subsidiaries have not
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, in either case whether or not in
the ordinary course of business, (ii) Acquisition, the Company and its
subsidiaries have not purchased any of their respective outstanding capital
stock, or declared, paid or otherwise made any dividend or distribution of
any kind on any of their respective capital stock or otherwise (other than,
with respect to any of such subsidiaries, the purchase of, or dividend or
distribution on, capital stock owned by the Company), (iii) there has not
been any other change in the capital stock or any change in the long-term
indebtedness of Acquisition, the Company or any of its subsidiaries, (iv)
there has not occurred any material change, or any development involving a
prospective material change, in or affecting the general affairs,
management, business, financial condition, properties or results of
operations of the Company and its subsidiaries, taken as a whole, not
contemplated by the Final Memorandum and (v) the Company and its
subsidiaries have not sustained any material loss or interference with
respect to their respective businesses or properties from fire, flood,
hurricane, earthquake, accident or other calamity, whether or not covered
by insurance, or from any labor dispute
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or any legal or governmental proceeding; provided, that, with respect to
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the Company and its subsidiaries, Acquisition shall be deemed to have made
the foregoing representation to the best of its knowledge.
(r) There are no legal or governmental proceedings, nor are there any
contracts or other documents required by the Securities Act to be described
in a prospectus that are not described in the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Preliminary
Memorandum). Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
none of the Company or its subsidiaries is in default under any of the
contracts described in the Final Memorandum (or, if the Final Memorandum is
not in existence, the most recent Preliminary Memorandum), has received a
notice or claim of any such default or has knowledge of any breach of such
contracts by the other party or parties thereto, except such defaults or
breaches as would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect; provided, that, with respect to
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the Company and its subsidiaries, Acquisition shall be deemed to have made
the foregoing representation to the best of its knowledge.
(s) None of Acquisition, the Company or its subsidiaries has taken
any action that would cause this Agreement or the issuance or sale of the
Notes to violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date; provided, that, with respect
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to the Company and its subsidiaries, Acquisition shall be deemed to have
made the foregoing representation to the best of its knowledge.
(t) Acquisition has filed all necessary federal and state income and
franchise tax returns, except where the failure to so file such returns
would not, individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which Acquisition is contesting in good faith
and for which adequate reserves have been provided in accordance with
generally accepted accounting principles, there is no tax deficiency that
has been asserted against Acquisition that would, individually or in the
aggregate, have a Material Adverse Effect.
(u) (i) Immediately after the consummation of the Transactions and
the other transactions contemplated by this Agreement, the other Basic
Documents and the Transaction Documents, the fair value and present fair
saleable value of the assets of each of the Company and its subsidiaries
will exceed the sum of its stated liabilities and identified contingent
liabilities; and (ii) each of the Company and its subsidiaries is not, nor
will it be, after giving effect to the execution, delivery and performance
of this Agreement, the other Basic Documents and the other Transaction
Documents, and
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the consummation of the Transactions and the other transactions
contemplated hereby and thereby, (a) left with unreasonably small capital
with which to carry on its business as it is proposed to be conducted, (b)
unable to pay its debts (contingent or otherwise) as they mature or (c)
otherwise insolvent; provided, that Acquisition shall be deemed to have
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given the foregoing representation to the best of its knowledge.
(v) Acquisition is not, and immediately after the Closing Date will
not be, required to register as an "investment company" or a company
"controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(w) None of Acquisition, the Company or its subsidiaries or any of
such entities' directors, officers, employees, agents or controlling
persons has taken, directly or indirectly, any action designed, or that
might reasonably be expected, to cause or result, under the Securities Act
or otherwise, in, or that has constituted, stabilization or manipulation of
the price of the Notes; provided, that, with respect to the Company and its
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subsidiaries, Acquisition shall be deemed to have made the foregoing
representation to the best of its knowledge.
(x) None of Acquisition, the Company, its subsidiaries or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Securities Act) directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of any
"security" (as defined in the Securities Act) which is or could be
integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes or (ii) engaged in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) in connection with the
offering of the Notes or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; provided, that, with
--------
respect to the Company and its subsidiaries, Acquisition shall be deemed to
have made the foregoing representation to the best of its knowledge.
Assuming the accuracy of the representations and warranties of the Initial
Purchasers in Section 9 hereof, it is not necessary in connection with the
offer, sale and delivery of the Notes to the Initial Purchasers in the
manner contemplated by this Agreement to register any of the Notes under
the Securities Act or to qualify the Indenture under the Trust Indenture
Act.
(y) No securities of Acquisition or the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the Notes and
listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
-13-
(z) No holder of securities of Acquisition, the Company or any of its
subsidiaries will be entitled to have such securities registered under the
registration statements required to be filed by Acquisition or the Company
pursuant to the Registration Rights Agreement other than as expressly
permitted thereby.
(aa) The statistical and market and industry-related data included in
the Final Memorandum (or, if the Final Memorandum is not in existence, the
most recent Preliminary Memorandum) are based on or derived from sources
which Acquisition , after due inquiry, believes to be reliable and accurate
or represent Acquisition's good faith estimates that are made on the basis
of data derived from such sources.
(bb) Neither Acquisition, the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes.
(cc) Except as stated in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
Acquisition does not know of any claims for services, either in the nature
of a finder's fee or financial advisory fee, with respect to the offering
of the Notes and the transactions contemplated by the Final Memorandum.
(dd) None of Acquisition, the Company, its subsidiaries, any of their
respective Affiliates or any person acting on its or their behalf (other
than the Initial Purchasers as to whom Acquisition and the Company make no
representations) has engaged in any directed selling efforts (as that term
is defined in Regulation S) with respect to the Notes and Acquisition, the
Company, its subsidiaries and their respective Affiliates and any person
acting on its or their behalf have acted in accordance with the offering
restrictions requirement of Regulation S; provided, that, with respect to
--------
the Company and its subsidiaries, Acquisition shall be deemed to have made
the foregoing representation to the best of its knowledge.
(ee) At and as of the Effective Time, each of the Company and its
subsidiaries will have good and marketable title to all real property
described in the Final Memorandum as being owned by it and good and
marketable title to the leasehold estate in the real property described
therein as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in the
Final Memorandum or such as would not, individually or in the aggregate,
have a Material Adverse Effect. All leases, contracts and agreements,
including those referred to in the Final Memorandum to which the Company or
any of its subsidiaries is a party or by which any of them is bound are
valid and enforceable against the Company or any such subsidiary, are, to
the best knowledge of the Company, valid and enforceable against the other
party or parties thereto and are in full force and effect.
-14-
(ff) The representations and warranties of the Company set forth in
Article III of the Merger Agreement as qualified by Section 7.02(a) of the
Merger Agreement are true and correct as if made on the date hereof.
The representations and warranties of Acquisition set forth in this
Section 2 are subject to confirmation by the staff of the Commission of
Acquisition's interpretation of certain provisions of the Public Utility Holding
Company Act of 1935, as amended.
Any certificate signed by any officer of Acquisition, the Company or
any of its subsidiaries in connection herewith and delivered to any Initial
Purchaser or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by Acquisition and, at and after the Effective Time,
the Company, to each Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
----------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, Acquisition agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser, acting
severally and not jointly, agrees to purchase from Acquisition, the Notes, in
the respective amounts set forth on Schedule 1 hereto, at a purchase price of
----------
97% of their principal amount.
One or more certificates in definitive form for the Notes that the
Initial Purchasers have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchasers
request upon notice to Acquisition at least 48 hours prior to the Closing Date
(as defined) shall be delivered by or on behalf of Acquisition, against payment
by or on behalf of the Initial Purchasers, of the purchase price therefor by
wire transfer of immediately available funds to the account of Acquisition
previously designated by it in writing. Such delivery of and payment for the
Notes shall be made at the offices of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-1413, at 9:00 a.m., New York
time, on April 7, 2000, or at such date as the Initial Purchasers and
Acquisition may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date." Acquisition will make such
certificate or certificates for the Notes available for checking and packaging
by the Initial Purchasers at the offices in New York, New York of CIBC World
Markets Corp. at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
----------------------------------
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
-15-
5. Certain Covenants. Acquisition and, at and as of the Effective
-----------------
Time, the Company, covenants and agrees with the Initial Purchasers that:
(i) Acquisition will not and, at and after the Effective Time, the
Company will not, amend or supplement the Final Memorandum or any amendment
or supplement thereto of which the Initial Purchasers shall not have been
advised and furnished a copy for a reasonable period of time prior to the
proposed amendment or supplement and as to which the Initial Purchasers
shall not have given their consent (which consent shall not be unreasonably
withheld). Acquisition will and, at and after the Effective Time, the
Company will, promptly, upon the reasonable request of the Initial
Purchasers or counsel for the Initial Purchasers, make any amendments or
supplements to the Preliminary Memorandum or the Final Memorandum that may
be necessary in connection with the resale of the Notes by the Initial
Purchasers.
(ii) Acquisition will and, at and after the Effective Time, the
Company will, cooperate with the Initial Purchasers in arranging for the
qualification of the Notes for offering and sale under the securities or
"Blue Sky" laws of such jurisdictions as the Initial Purchasers may
designate and will continue such qualifications in effect for as long as
may be necessary to complete the resale of the Notes by the Initial
Purchasers; provided, however, that in connection therewith neither
-------- -------
Acquisition nor the Company shall be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or to take any other action that would subject it to general
service of process or to taxation in excess of a nominal amount in respect
of doing business in any jurisdiction in which it is not otherwise subject.
(iii) If, at any time prior to the completion of the resale by the
Initial Purchasers of the Notes or the Private Exchange Notes, any event
shall occur as a result of which it is necessary, in the opinion of counsel
for the Initial Purchasers, to amend or supplement the Final Memorandum in
order to make such Final Memorandum not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
for any other reason it shall be necessary to amend or supplement the Final
Memorandum in order to comply with applicable laws, rules or regulations,
Acquisition shall and, at and after the Effective Time, the Company shall
(subject to Section 5(i)), forthwith amend or supplement such Final
Memorandum at its own expense so that, as so amended or supplemented, such
Final Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading and will comply with all
applicable laws, rules or regulations.
-16-
(iv) Acquisition will and, at and after the Effective Time, the
Company will, without charge, provide to the Initial Purchasers and to
counsel for the Initial Purchasers, as many copies of each Preliminary
Memorandum or Final Memorandum or any amendment or supplement thereto as
the Initial Purchasers may reasonably request.
(v) None of Acquisition or the Company or any of their respective
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Securities Act)
which could be integrated with the sale of the Notes in a manner which
would require the registration under the Securities Act.
(vi) For so long as any of the Notes remain outstanding,
Acquisition will and, at and after the Effective Time, the Company will,
furnish to the Initial Purchasers (a) as soon as available, a copy of each
report or other communication (financial or otherwise) of Acquisition and,
at and after the Effective Time, the Company, mailed to the Trustee or
holders of the Notes or stockholders or filed with the Commission or any
national securities exchange on which any class of securities of
Acquisition and, at and after the Effective Time, the Company or any of its
subsidiaries may be listed, and (b) from time to time such other
information concerning Acquisition and, at and after the Effective Time,
the Company and its subsidiaries, as the Initial Purchasers may reasonably
request.
(vii) Acquisition and, at and after the Effective Time, the
Company, will apply the net proceeds from the sale of the Notes as set
forth under "Use of Proceeds" in the Final Memorandum.
(viii) Acquisition will not and, at and after the Effective Time,
the Company will not, and will not permit any of its subsidiaries to,
engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) in connection with
the offering of the Notes or in any manner involving a public offering of
the Notes within the meaning of Section 4(2) of the Securities Act.
(ix) For so long as any of the Notes remain outstanding,
Acquisition will and, at and after the Effective Time, the Company will,
make available at its expense, upon request, to any holder of Notes and any
prospective purchasers thereof the information specified in Rule 144A(d)(4)
under the Securities Act, unless Acquisition and, at and after the
Effective Time, the Company, is then subject to Section 13 or 15(d) of the
Exchange Act.
(x) Acquisition will and, at and after the Effective Time, the
Company will, use its best efforts to (i) permit the Notes to be designated
PORTAL securities in accordance with the rules and regulations adopted by
the National Association of Securities
-17-
Dealers, Inc. (the "NASD") relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the "PORTAL Market")
and (ii) permit the Notes to be eligible for clearance and settlement
through The Depository Trust Company.
(xi) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S), Acquisition will not and, at and
after the Effective Time, the Company will not, register any transfer of
such Notes not made in accordance with the provisions of Regulation S and
will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
(xii) Acquisition will not and, at and after the Effective Time,
the Company will not, become, at any time prior to the expiration of three
years after the Closing Date, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act.
(xiii) During the period of three years after the Closing Date,
Acquisition will not and, at and after the Effective Time, the Company will
not, and will not permit any of its "affiliates" (as defined in Rule 144
under the Securities Act) to, resell any of the Notes which constitute
"restricted securities" under Rule 144 that have been reacquired by any of
them.
(xiv) Acquisition will and, at and after the Effective Time, the
Company will, use its best efforts to do and perform all things required to
be done and performed by it under this Agreement and the other Basic
Documents prior to or after the Closing Date and to satisfy all conditions
precedent on its part to the obligations of the Initial Purchasers to
purchase and accept delivery of the Notes.
6. Expenses. Notwithstanding any termination of this Agreement
--------
(pursuant to Section 11 or otherwise), Acquisition and, at and as of the
Effective Time, the Company, agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by Acquisition and, at
and after the Effective Time, the Company, of its obligations hereunder: (i)
the negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement and of the other Basic Documents, any amendment or
supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith; (ii) the preparation, printing or reproduction of each Preliminary
Memorandum, the Final Memorandum and each amendment or supplement to any of
them; (iii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of each
Preliminary Memorandum, the Final Memorandum and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering
-18-
and sale of the Notes; (iv) the preparation, printing, authentication, issuance
and delivery of certificates for the Notes, including any stamp taxes in
connection with the original issuance and sale of the Notes and trustees' fees;
(v) the reproduction and delivery of this Agreement and the other Basic
Documents, the preliminary and supplemental "Blue Sky" memoranda and all other
agreements or documents reproduced and delivered in connection with the offering
of the Notes; (vi) the registration or qualification of the Notes for offer and
sale under the securities or Blue Sky laws of the several states (including
filing fees and the reasonable fees, expenses and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel to the Initial Purchasers, relating to such registration and
qualification); (vii) the filing fees in connection with any filings required to
be made with the NASD (including the reasonable fees and disbursements of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers, in respect thereof and in
connection with obtaining an opinion of the NASD concerning the fairness of the
terms and arrangements of the underwriting of the Notes); (viii) the reasonable
transportation and other expenses incurred by or on behalf of representatives of
Acquisition or the Company in connection with presentations to prospective
purchasers of the Notes; (ix) the reasonable fees and expenses of the
accountants and the reasonable fees and expenses of counsel (including local and
special counsel) for Acquisition and, at and after the Effective Time, the
Company; (x) fees and expenses of the Trustee including fees and expenses of its
counsel; (xi) all expenses and listing fees incurred in connection with the
application for quotation of the Notes on the PORTAL Market; and (xii) any fees
charged by investment rating agencies for the rating of the Notes. In addition,
Acquisition and, at and as of the Effective Time, the Company hereby agree
jointly and severally to reimburse the Initial Purchasers promptly upon request
for all reasonable out-of-pocket expenses (including duplication services,
facsimile expenses, printing expenses, research document expenses, travel and
road show expenses and other customary offering expenditures) incurred by them
in connection with the offering of the Notes and to pay the reasonable fees and
expenses of their counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
7. Conditions of the Initial Purchasers' Obligations. The obligation
-------------------------------------------------
of each Initial Purchaser to purchase and pay for the Notes is subject to the
accuracy of the representations and warranties contained herein, to the
performance by Acquisition and, at and after the Effective Time, the Company, of
its covenants and agreements hereunder and to the following additional
conditions unless waived in writing by the Initial Purchasers:
(i) The Initial Purchasers shall have received the opinion of
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to Acquisition and, at and as
of the Effective Time, the Company, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.,
special Texas counsel to Acquisition and, at and as of the Effective Time,
the Company, ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, special Texas counsel to the Company,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice-President and General Counsel to the Company,
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., special Texas regulatory counsel to the
Company, and ▇▇▇▇▇, ▇▇▇▇, Salazar, Alley & ▇▇▇▇▇, special New Mexico
regulatory counsel to the Company, substantially in the form of
Exhibit B-1,
-----------
-19-
Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5 and Exhibit B-6
----------- ----------- ------------ ----------- -----------
hereto, respectively, and in each case, in form and substance satisfactory to
the Initial Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇. In rendering such opinions,
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., ▇▇▇▇▇▇ and
▇▇▇▇▇, LLP, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ L.L.P. and ▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇, Alley & ▇▇▇▇▇ shall have received and may rely upon such certificates
and other documents and information, including one or more opinions of local
counsel (subject to the customary exceptions) reasonably acceptable to the
Initial Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial
Purchasers, as they may reasonably request to pass upon such matters. In
addition, in rendering their opinion, Milbank, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP may
state that their opinion is limited to matters of New York and federal law.
(ii) The Initial Purchasers shall have received an opinion, dated
the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers,
with respect to the sufficiency of certain legal matters relating to this
Agreement and such other related matters as the Initial Purchasers may require.
In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received and may
rely upon such certificates and other documents and information as they may
reasonably request to pass upon such matters. In addition, in rendering their
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may state that their opinion is limited to
matters of New York and federal law.
(iii) The Initial Purchasers shall have received from each of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG LLP, independent public accountants, "comfort"
letters dated the date hereof and the date of the Final Memorandum, and, in the
case of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel to the Initial Purchasers.
(iv) The representations and warranties of Acquisition and, at
and after the Effective Time, the Company, contained in this Agreement shall be
true and correct on and as of the Closing Date; Acquisition and, at and after
the Effective Time, the Company, shall have complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date.
(v) There shall not have been any change in the capital stock of
Acquisition, the Company or its subsidiaries or any material increase in the
consolidated short-term or long-term debt of Acquisition or the Company from
that set forth or contemplated in the Final Memorandum and Acquisition, the
Company and its subsidiaries shall not have any liabilities or obligations,
contingent or otherwise (whether or not in the ordinary course of business),
that are material to Acquisition, the Company and its subsidiaries, taken as a
whole, other than those reflected in the Final Memorandum.
-20-
(vi) None of the issuance and sale of the Notes pursuant to this
Agreement or any of the transactions contemplated by any of the other
Transaction Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued; and
there shall not have been any legal action, order, decree or other
administrative proceeding instituted or threatened against Acquisition, the
Company or the Initial Purchasers relating to the issuance of the Notes or
the Initial Purchasers' activities in connection therewith or any other
transactions contemplated by this Agreement or the Final Memorandum or the
other Transaction Documents.
(vii) Subsequent to the date of this Agreement and since the date
of the most recent financial statements in the Final Memorandum (exclusive
of any amendment or supplement thereto after the date hereof), there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the general affairs, management,
business, financial condition, properties or results of operations of
Acquisition, the Company and its subsidiaries, taken as a whole, not
contemplated by the Final Memorandum that, in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Notes, or
(ii) any event or development relating to or involving any of Acquisition,
the Company or its subsidiaries or any of the officers or directors of
Acquisition, the Company or its subsidiaries that makes any statement made
in the Final Memorandum untrue or that, in the opinion of Acquisition and,
at and after the Effective Time, the Company, and its counsel or the
Initial Purchasers and their counsel, requires the making of any addition
to or change in the Final Memorandum in order to state a material fact
required by any applicable law, rule or regulation to be stated therein or
necessary in order to make the statements made therein not misleading.
(viii) The Initial Purchasers shall have received certificates,
dated the Closing Date and signed by the chief executive officer and the
chief financial officer of Acquisition, to the effect that:
a. All of the representations and warranties of Acquisition set
forth in this Agreement are true and correct as if made on and as
of the Closing Date and Acquisition has complied in all material
respects with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing
Date.
b. The issuance and sale of the Notes pursuant to this Agreement or
the Final Memorandum and the consummation of the transactions
contemplated by the Transaction Documents have not been enjoined
(temporarily or permanently) and no restraining order or other
injunctive
-21-
order has been issued and there has not been any legal action,
order, decree or other administrative proceeding instituted or
threatened against Acquisition or, to the best knowledge of
Acquisition after due inquiry, the Company, relating to the
issuance of the Notes or the Initial Purchasers' activities in
connection therewith or in connection with any other transactions
contemplated by this Agreement or the Final Memorandum or the
other Transaction Documents.
c. Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), there has not occurred (i) any change, or any
development involving a prospective change, in or affecting the
general affairs, management, business, financial condition,
properties or results of operations of Acquisition, the Company
and its subsidiaries, taken as a whole, not contemplated by the
Final Memorandum that would materially adversely affect the
market for the Notes, or (ii) any event or development relating
to or involving any of Acquisition, the Company or its
subsidiaries or any of the respective officers or directors of
Acquisition, the Company or its subsidiaries that makes any
statement made in the Final Memorandum untrue or that requires
the making of any addition to or change in the Final Memorandum
in order to state a material fact required by any applicable law,
rule or regulation to be stated therein or necessary in order to
make the statements made therein not misleading.
d. There has not been any change in the capital stock of
Acquisition, the Company or its subsidiaries nor any material
increase in the consolidated short-term or long-term debt of
Acquisition, the Company or its subsidiaries from that set forth
or contemplated in the Final Memorandum and Acquisition, the
Company and its subsidiaries have no liabilities or obligations,
contingent or otherwise (whether or not in the ordinary course of
business), that are material to Acquisition, the Company and its
subsidiaries, taken as a whole, other than those reflected in the
Final Memorandum.
e. At the Closing Date and after giving effect to the consummation
of the transactions contemplated by this Agreement and the other
Transaction Documents, there exists no Default or Event of
Default (as defined in the Indenture).
-22-
(ix) The Initial Purchasers shall have received certificates, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company, to the effect that:
a. All of the representations and warranties of the Company set
forth in this Agreement are true and correct as if made on and as
of the Closing Date and the Company has complied in all material
respects with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing
Date.
b. The issuance and sale of the Notes pursuant to this Agreement or
the Final Memorandum and the consummation of the transactions
contemplated by the Transaction Documents have not been enjoined
(temporarily or permanently) and no restraining order or other
injunctive order has been issued and there has not been any legal
action, order, decree or other administrative proceeding
instituted or threatened against the Company relating to the
issuance of the Notes or the Initial Purchasers' activities in
connection therewith or in connection with any other transactions
contemplated by this Agreement or the Final Memorandum or the
other Transaction Documents.
c. Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), there has not occurred (i) any change, or any
development involving a prospective change, in or affecting the
general affairs, management, business, financial condition,
properties or results of operations of the Company and its
subsidiaries, taken as a whole, not contemplated by the Final
Memorandum that would materially adversely affect the market for
the Notes, or (ii) any event or development relating to or
involving any of the Company or its subsidiaries or any of the
respective officers or directors of the Company or its
subsidiaries that makes any statement made in the Final
Memorandum untrue or that requires the making of any addition to
or change in the Final Memorandum in order to state a material
fact required by any applicable law, rule or regulation to be
stated therein or necessary in order to make the statements made
therein not misleading.
d. There has not been any change in the capital stock of the Company
or its subsidiaries nor any material increase in the consolidated
short-term or long-term debt of the Company from that set forth
or contemplated
-23-
in the Final Memorandum and the Company and its subsidiaries have
no liabilities or obligations, contingent or otherwise (whether
or not in the ordinary course of business), that are material to
the Company and its subsidiaries, taken as a whole, other than
those reflected in the Final Memorandum.
e. At the Closing Date and after giving effect to the consummation
of the transactions contemplated by this Agreement and the other
Transaction Documents, there exists no Default or Event of
Default.
(x) Each of the Transaction Documents other than the Basic
Documents and each other agreement or instrument executed in connection
with the Transactions shall be reasonably satisfactory in form and
substance to the Initial Purchasers and shall have been executed and
delivered by all the respective parties thereto and shall be in full force
and effect, and there shall have been no material amendments, alterations,
modifications or waivers of any provision thereof since the date of this
Agreement.
(xi) All proceedings taken in connection with the issuance of the
Notes and the transactions contemplated by this Agreement and the other
Transaction Documents and all documents and papers relating thereto shall
be reasonably satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers. The Initial Purchasers and counsel to the Initial
Purchasers shall have received copies of such papers and documents as they
may reasonably request in connection therewith, all in form and substance
reasonably satisfactory to them.
(xii) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 436(g) under the Securities Act, that (A) it is
downgrading its rating assigned to any debt securities of Acquisition, the
Company or any of its subsidiaries, or (B) it is reviewing its rating
assigned to any debt securities of Acquisition, the Company or any of its
subsidiaries with a view to possible downgrading, or with negative
implications, or direction not determined.
(xiii) The Indenture shall have been duly executed and delivered
by Acquisition and the Trustee and the Notes under the Indenture shall have
been duly executed and delivered by the Company and duly authenticated by
the Trustee. The First Supplemental Indenture shall have been duly
executed and delivered by the Company and the Trustee and the Notes under
the First Supplemental Indenture shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
-24-
(xiv) On or before the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by Acquisition and
such agreement shall be in full force and effect at all times from and
after the Closing Date.
(xv) Acquisition and, at and after the Effective Time, the
Company, shall have furnished or caused to be furnished to the Initial
Purchasers such further certificates and documents as the Initial
Purchasers shall have reasonably requested.
(xvi) Immediately after the Effective Time, the Assumption
Agreement shall have been duly authorized, executed and delivered by the
Company and such agreement shall be in full force and effect at all times
immediately after the Effective Time.
(xvii) On or before the Closing Date, (i) the Initial Purchasers
and counsel for the Initial Purchasers shall have received executed copies
of the Credit Agreement, dated the Closing Date, including any schedules,
amendments or waivers thereto, and such other documents, opinions and
reliance letters as they shall have reasonably requested, and (ii) after
giving effect to the transactions contemplated by this Agreement and the
application of the proceeds received by Acquisition from the sale of the
Notes, no condition that would constitute a default or event of default
under the Credit Agreement shall exist. On the Closing Date, the Credit
Agreement shall provide for (i) revolving credit borrowings of not less
than $25 million, all of which shall be available on the Closing Date, and
(ii) term loan borrowings of not less than $160 million, which shall be
provided on the Closing Date.
(xviii) On the Closing Date, the Merger and each of the other
Transactions shall have been concurrently consummated with the sale and
issuance of the Notes.
The conditions of the Initial Purchasers' obligations set forth in
this Section 7 relating to the representations and warranties of Acquisition set
forth in Section 2 shall not give effect to the second to last paragraph of
Section 2.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel to the Initial Purchasers. Acquisition and, at
and after the Effective Time, the Company, shall furnish to the Initial
Purchasers such conformed copies of such opinions, certificates, letters,
schedules, documents and instruments in such quantities as the Initial
Purchasers shall reasonably request.
8. Indemnification and Contribution. (a) Acquisition and, at and
--------------------------------
after the Effective Time, the Company, agrees to indemnify and hold harmless the
Initial Purchasers, each director, officer, employee or agent of any Initial
Purchaser and each person, if any, who
-25-
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages, liabilities or expenses to which such Initial Purchaser or such
director, officer, employee, agent or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto or (B) any of the Basic
Documents or any application or other document, or any amendment or
supplement thereto, executed by Acquisition or the Company or based upon
written information furnished by or on behalf of Acquisition or the Company
filed in any jurisdiction in order to qualify the Notes under the
securities or "Blue Sky" laws thereof or filed with the Commission or any
securities association or securities exchange (collectively, the
"Documents"); or
(ii) the omission or alleged omission to state, in any Preliminary
Memorandum or the Final Memorandum or any amendment or supplement thereto,
or any of the Documents, a material fact required to be stated therein or
necessary to make the statements therein not misleading,
and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as incurred, the Initial Purchasers and each such director,
officer, employee, agent or controlling person for any legal or other expenses
reasonably incurred by the Initial Purchasers or such director, officer,
employee, agent or controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability, expense or action; provided, however, that
-------- -------
Acquisition and, at and after the Effective Time, the Company, will not be
liable in any such case to an Initial Purchaser or any director, officer,
employee, agent or controlling person of such Initial Purchaser to the extent
that any such loss, claim, damages, liability expense or action arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Memorandum or the Final Memorandum or
any amendment or supplement thereto, or any Document, in reliance upon and in
conformity with written information furnished to Acquisition and, at and after
the Effective Time, the Company, by or on behalf of such Initial Purchasers
specifically for use therein; and provided, further, that Acquisition and, at
-------- -------
and after the Effective Time, the Company, will not be liable to any Initial
Purchaser or any director, officer, employee, agent or any person controlling
any Initial Purchaser with respect to any such untrue statement or omission made
in any Preliminary Memorandum that is corrected in the Final Memorandum (or any
amendment or supplement thereto) if the person asserting any such loss, claim,
damage, expense or liability purchased Notes from an Initial Purchaser in
reliance upon the Preliminary Memorandum but was not sent or given a copy of the
Final Memorandum (as amended or supplemented) that was
-26-
made available by Acquisition and, at and after the Effective Time, the Company,
to such Initial Purchaser at or prior to the written confirmation of the sale of
the Notes to such person in any case where such delivery of such Final
Memorandum (as so amended or supplemented) is required by the Securities Act,
unless such failure to deliver such Final Memorandum (as amended or
supplemented) was a result of noncompliance by Acquisition and, at and after the
Effective Time, the Company, with Section 5(iv) of this Agreement. This
indemnity agreement will be in addition to any liability that Acquisition and,
at and after the Effective Time, the Company, may otherwise have to the
indemnified parties. Acquisition and, at and after the Effective Time, the
Company, further agrees that the indemnification, contribution and reimbursement
commitments set forth in this Section 8 shall apply whether or not any Initial
Purchaser is a formal party to any such lawsuits, claims or other proceedings.
Acquisition and, at and after the Effective Time, the Company, will not without
the prior written consent of the Initial Purchasers, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification by the Initial Purchasers
may be sought hereunder (whether or not the Initial Purchasers or any person who
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent (i)
includes an unconditional release of the Initial Purchasers and each such
director, officer, employee, agent or controlling person from all liability
arising out of such claim, action, suit or proceeding and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to act,
by or on behalf of any Initial Purchaser or any such director, officer,
employee, agent or controlling person.
(b) The Initial Purchasers, severally and not jointly, will indemnify
and hold harmless Acquisition and, at and after the Effective Time, the Company,
its directors, officers, employees and agents and each person, if any, who
controls Acquisition and, at and after the Effective Time, the Company, within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which Acquisition and,
at and after the Effective Time, the Company, or any such director, officer,
employee, agent or controlling person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto or any Document, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement was made in
reliance upon and in conformity with written information furnished to
Acquisition and, at and after the Effective Time, the Company, by or on behalf
of such Initial Purchaser specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by Acquisition and, at
and after the Effective Time, the Company, or any such director, officer,
employee, agent or controlling person in connection with investigating or
defending against or appearing as a
-27-
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchasers may otherwise have to the indemnified
parties.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party under Section 8(a) or (b)
except to the extent that the indemnifying party is unaware of the commencement
of such action and such omission results in the forfeiture by the indemnifying
party of substantial rights and defenses. In case any such action is brought
against any indemnified party, and such indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the named parties in any such action (including any
-------- -------
impleaded parties) include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be one
or more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to any such indemnifying party,
then the indemnifying parties shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable out-of-pocket costs of investigation, incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions); (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying parties; or (iii) the
indemnifying party shall have failed to assume the defense or retain counsel
reasonably satisfactory to the indemnified party. No indemnifying party shall
be liable for the costs and expenses of any settlement of any such claim or
action effected without its written consent, but if settled with the written
consent of such indemnifying party, such indemnifying party agrees to indemnify
and hold harmless the indemnified
-28-
party from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable contribution, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages, expenses or liabilities
(or actions in respect thereof). The relative benefits received by Acquisition
and, at and after the Effective Time, the Company, on the one hand and the
Initial Purchasers on the other shall be deemed to be in the same proportion as
the total proceeds from the offering of the Notes (before deducting expenses)
received by Acquisition and, at and after the Effective Time, the Company, bear
to the total discounts and commissions received by the Initial Purchasers. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by Acquisition or the Company, on the one hand or the Initial
Purchasers on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances. The
amount paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses incurred by such party in connection with investigating or defending
any such claim. Acquisition and, at and after the Effective Time, the Company,
and the Initial Purchasers agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation (even if
Acquisition and, at and after the Effective Time, the Company, on the one hand
and the Initial Purchasers on the other hand were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable
-29-
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial
Purchasers shall not be obligated to make contributions hereunder that in the
aggregate exceed the total discounts and commissions received by the Initial
Purchasers under this Agreement, less the aggregate amount of any damages that
the Initial Purchasers have otherwise been required to pay by reason of the
untrue or alleged untrue statements, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each director,
officer, employee or agent of and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director, officer, employee and agent of Acquisition and, at
and after the Effective Time, the Company, and each person, if any, who controls
Acquisition and, at and after the Effective Time, the Company, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as Acquisition and, at and after the
Effective Time, the Company.
(e) Notwithstanding anything to the contrary in this Section 8, the
indemnification and contribution provisions of the Registration Rights Agreement
shall govern any claim with respect thereto.
9. Offering of Notes; Restrictions on Transfer. (a) Each Initial
-------------------------------------------
Purchaser represents and warrants as to itself only that it is a QIB. Each
Initial Purchaser agrees as to itself only that (i) it has not and will not
solicit offers for, or offer or sell, the Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and (ii) it has and will
solicit offers for the Notes only from, and will offer the Notes only to, (A) in
the case of offers inside the United States, persons whom such Initial Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A and, in each case, in transactions under
Rule 144A and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)); provided,
--------
however, that, in the case of this clause (B), in purchasing such Note such
-------
persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum).
-30-
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Notes or has in its
possession or distributes any Memorandum or any such other material, in all
cases at its own expense; (ii) the Notes have not been and will not be offered
or sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act; (iii) it has offered the Notes and will offer and sell the Notes (A) as
part of its distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S and, accordingly, neither it nor any
persons acting on its behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes, and any
such persons have complied and will comply with the offering restrictions
requirement of Regulation S; and (iv) it agrees that, at or prior to
confirmation of sales of the Notes, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered under the United
States Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of the distribution of the securities at any time
or (ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date of the offering, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them in
Regulation S."
(c) Each Initial Purchaser represents and agrees that: (i) it has
not offered or sold, and prior to the date six months after the date of the
issue of the Notes will not offer or sell, any Notes to any person in the United
Kingdom, except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied, and will comply with, all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom; and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Notes to a person who is
of a kind described in Article 11(3) of the Financial services Act of 1986
(Investment Advertisements) (Exemption) Order 1996 (as amended) or is a person
to whom the document may otherwise lawfully be issued or passed on.
-31-
(d) The Initial Purchasers understand that Acquisition and, at and as
of the Effective Time, the Company, and for purposes of the opinions of counsel
to be delivered to the Initial Purchasers pursuant to Section 7 hereof, such
counsel may rely upon the accuracy and truth of the representations and
warranties of the Initial Purchasers in this Section 9 and hereby consent to
such reliance.
Terms used in this Section 9 and not defined in this Agreement have the meanings
given to them in Regulation S.
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of Acquisition and, at
and after the Effective Time, the Company, their respective officers and the
Initial Purchasers set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of Acquisition and, at
and after the Effective Time, the Company, any of their respective officers or
directors, the Initial Purchasers or any controlling person referred to in
Section 8 hereof and (ii) delivery of, payment for or disposition of the Notes,
and shall be binding upon and shall inure to the benefit of any successors,
assigns, heirs or personal representatives of Acquisition and, at and after the
Effective Time, the Company, the Initial Purchasers and indemnified parties
referred to in Section 8 hereof. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchasers by notice to Acquisition and, at and after
the Effective Time, the Company, given in the event that Acquisition and, at and
after the Effective Time, the Company, shall have failed, refused or been unable
to satisfy all conditions on its part to be performed or satisfied hereunder on
or prior to the Closing Date or, if at or prior to the Closing Date:
(i) any of Acquisition, the Company or its subsidiaries shall have
sustained any loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchasers, has had or
has a material adverse effect on the general affairs, management, business,
financial condition,
-32-
properties or results of operations of Acquisition, the Company and its
subsidiaries, taken as a whole, or there shall have been any material
adverse change, or any development involving a prospective material adverse
change (including without limitation a change in management or control of
Acquisition, the Company or any of its subsidiaries), in the general
affairs, management, business, financial condition, properties or results
of operations of Acquisition, the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities of Acquisition, the Company or any of
its subsidiaries or in securities generally on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency, or (C) any material change in the financial markets of the
United States that, in the case of (A), (B) or (C) above, in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the delivery of the Notes as contemplated by the Final
Memorandum, as amended as of the date hereof; or
(v) any securities of Acquisition, the Company or any of its
subsidiaries shall have been downgraded or placed on any "watch list" for
possible downgrading by any nationally recognized statistical rating
organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing and,
-------
(i) if sent to the Initial Purchasers, shall be hand delivered, mailed by first-
class mail, couriered by next-day air courier or telecopied and confirmed in
writing to CIBC World Markets Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department, telecopy number:
(▇▇▇) ▇▇▇-▇▇▇▇; with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., telecopy number: (212)
269-5420 and (ii) if sent to Acquisition or the Company, shall be hand
delivered, mailed by first-class mail, couriered by next-day air courier or
telecopied and confirmed in writing to TNP Enterprises, Inc., c/o Laurel Hill
Capital Partners LLC, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to
Milbank, Tweed, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇.
-33-
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier guaranteeing overnight
delivery; and when receipt is acknowledged by the addressee, if telecopied.
13. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchasers and Acquisition and, at and after the
Effective Time, the Company, and their respective successors and legal
representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of
Acquisition and, at and after the Effective Time, the Company, contained in
Section 8 of this Agreement shall also be for the benefit of the directors,
officers, employees and agents and any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained
in Section 8 of this Agreement shall also be for the benefit of the directors,
officers, employees and agents of Acquisition and, at and after the Effective
Time, the Company and any person or persons who control Acquisition and, at and
after the Effective Time, the Company, within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act. No purchaser of Notes from
any Initial Purchaser will be deemed a successor because of such purchase.
14. No Waiver; Modifications in Writing. No failure or delay on the
-----------------------------------
part of Acquisition and, at and after the Effective Time, the Company, or the
Initial Purchasers in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to Acquisition and, at and after the Effective Time, the Company, or
the Initial Purchasers at law or in equity or otherwise. No waiver of or
consent to any departure by Acquisition and, at and after the Effective Time,
the Company, or the Initial Purchasers from any provision of this Agreement
shall be effective unless signed in writing by the party entitled to the benefit
thereof, provided that notice of any such waiver shall be given to each party
--------
hereto as set forth below. Except as otherwise provided herein, no amendment,
modification or termination of any provision of this Agreement shall be
effective unless signed in writing by or on behalf of each of Acquisition and,
at and after the Effective Time, the Company, and the Initial Purchasers. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by Acquisition and, at and after the Effective Time, the Company, or the Initial
Purchasers from
-34-
the terms of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on Acquisition and, at and after the Effective Time, the Company, in any case
shall entitle Acquisition and, at and after the Effective Time, the Company, to
any other or further notice or demand in similar or other circumstances.
15. Information Supplied by the Initial Purchasers. The statements
----------------------------------------------
set forth in the first sentence of the fifth paragraph, the third and fourth
sentences of the seventh paragraph and the entire tenth paragraph, in each case
under the heading "Plan of Distribution" in the Final Memorandum (to the extent
such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to Acquisition and the Company
for purposes of Sections 2(a) and 8 hereof.
16. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
--------------
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Assumption Permitted. The assumption by the Company pursuant to
--------------------
the Assumption Agreement of the obligations of Acquisition hereunder shall be
permitted without the written consent of any of the parties hereto.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among Acquisition
and the Initial Purchasers.
Very truly yours,
ST ACQUISITION CORP.
/s/
By:____________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Vice President and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
CIBC WORLD MARKETS CORP.
/s/
By:__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
CHASE SECURITIES INC.
By:__________________________
Name:
Title:
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among Acquisition
and the Initial Purchasers.
Very truly yours,
ST ACQUISITION CORP.
By:______________________
Name:
Title:
The foregoing Agreement is herevy confirmed
and accepted as the date first above written.
CIBC WORLD MARKETS CORP.
By:__________________________
Name:
Title:
CHASE SECURITIES INC.
By:__________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP
BARCLAYS CAPITAL INC.
By:__________________________
Name:
Title:
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among Acquisition
and the Initial Purchasers.
Very truly yours,
ST ACQUISITION CORP.
By:________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CIBC WORLD MARKETS CORP.
By:____________________________
Name:
Title:
CHASE SECURITIES INC.
By:____________________________
Name:
Title:
BARCLAYS CAPITAL INC.
/s/
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title:MANAGING DIRECTOR
Schedule 1
----------
CIBC World Markets Corp................................................ $132,000,000
Chase Securities Inc................................................... $132,000,000
Barclays Capital Inc................................................... $ 11,000,000
__________
Total.................................................................. $275,000,000
============
Exhibit A
---------
FORM OF ASSUMPTION AGREEMENT
----------------------------
ASSUMPTION AGREEMENT (this "Agreement"), dated as of April 7, 2000, is
by TNP Enterprises, Inc., a Texas corporation (the "Company").
W I T N E S S E T H
-------------------
WHEREAS, ST Acquisition Corp., a Texas corporation ("Acquisition"),
has heretofore executed and delivered to CIBC World Markets Corp., Chase
Securities Inc. and Barclays Capital Inc. (the "Initial Purchasers") a purchase
agreement (the "Purchase Agreement"), dated as of March 31, 2000, providing for
the terms pursuant to which the Initial Purchasers have purchased $275,000,000
aggregate principal amount of 10.25% Senior Subordinated Notes due 2010 (the
"Notes") of Acquisition;
WHEREAS, Acquisition has heretofore executed and delivered to the
Initial Purchasers a registration rights agreement (the "Registration Rights
Agreement"), dated as of April 7, 2000, providing for the registration of the
Notes and the Exchange Notes (as defined in the Registration Rights Agreement)
of Acquisition under the Securities Act of 1933, as amended;
WHEREAS, Acquisition has been merged with and into the Company (the
"Merger"); and
WHEREAS, pursuant to the Purchase Agreement and the Registration
Rights Agreement, the Company upon consummation of the Merger is required to
assume all of the obligations of Acquisition under the Purchase Agreement and
the Registration Rights Agreement and to execute and deliver this Agreement
concurrently with the Merger.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company covenants and agrees for the benefit of the Initial Purchasers as
follows:
1. ASSUMPTION. The Company hereby agrees to assume all of the
obligations of Acquisition and all of its own obligations under the Purchase
Agreement and the Registration Rights Agreement.
-2-
2. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF, SHALL GOVERN AND
BE USED TO CONSTRUE THIS AGREEMENT.
3. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered as of the date first above written, which is the date of
the Merger.
TNP ENTERPRISES, INC.
By:___________________________
Name:
Title:
Exhibit B-1
-----------
Form of Opinion of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
------------------------------------------------------
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to Acquisition and,
at and as of the Effective Time, the Company, to the effect that:
(1) The Notes, the Exchange Notes and the Private Exchange Notes,
when executed and authenticated in accordance with the provisions of the
Indenture as supplemented by the First Supplemental Indenture and, in the case
of the Notes, delivered to and paid for by you in accordance with the terms of
the Purchase Agreement, (A) will be valid and binding obligations of Acquisition
and, at and as of the Effective Time, the Company, enforceable against
Acquisition and, at and as of the Effective Time, the Company in accordance with
their terms except as (x) may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or similar laws
relating to or affecting creditors' rights generally and (y) the enforceability
thereof is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing, and (B) will be
entitled to the benefits of the Indenture as supplemented by the First
Supplemental Indenture. The Notes are in the form contemplated by the
Indenture.
(2) The Indenture is a valid and binding agreement of Acquisition
and, as supplemented by the First Supplemental Indenture, at and as of the
Effective Time, is a valid and binding agreement of the Company, enforceable
against Acquisition and, at and as of the Effective Time, the Company in
accordance with its terms except as (x) may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
similar laws relating to or affecting creditors' rights generally and (y) the
enforceability thereof is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
(3) The Registration Rights Agreement is a valid and binding
agreement of Acquisition, enforceable against Acquisition in accordance with its
terms, except as (x) may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or similar laws relating to or
affecting creditors' rights generally, (y) the enforceability thereof is subject
to the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including, without limitation,
(a) the possible unavailability
-2-
of specific performance, injunctive relief or any other equitable remedy and (b)
concepts of materiality, reasonableness, good faith and fair dealing, and (z)
the enforceability of rights to indemnity and contribution thereunder may be
limited by federal or state securities laws or principles of public policy.
(4) The Assumption Agreement and, at and as of the Effective Time,
the Registration Rights Agreement are valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms, except
as (x) may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or similar laws relating to or affecting
creditors' rights generally, (y) the enforceability thereof is subject to the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good faith and
fair dealing, and (z) the enforceability of rights to indemnity and contribution
thereunder may be limited by federal or state securities laws or principles of
public policy.
(5) The Notes, the Indenture, the Registration Rights Agreement, the
Assumption Agreement, the Credit Agreement, the Statement of Resolution, the
Shares Registration Rights Agreement and the Shares Assumption Agreement conform
in all material respects to the descriptions thereof in the Final Memorandum
under the captions "Description of Certain Indebtedness and Preferred Equity",
"Description of the Notes" and "Exchange Offer; Registration Rights." The
statements set forth in the Final Memorandum under the captions "Risk Factors --
Factors Relating to the Regulatory Environment" and "Business -- Government
Regulation; Regulatory Matters" insofar as such statements purport to summarize
certain provisions of United States Federal regulatory laws referred to therein,
accurately summarize the matters referred to therein in all material respects,
under existing law.
(6) The Credit Agreement, the Shares Registration Rights Agreement
and the Shares Assumption Agreement are valid and binding agreements of each of
Acquisition and the Company to the extent that each is a party thereto,
enforceable against each of Acquisition and the Company, to the extent each is a
party thereto, in accordance with their terms, except as (x) may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or similar laws relating to or affecting creditors' rights generally,
(y) the enforceability thereof is subject to the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including, without limitation, (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and (b)
concepts of materiality, reasonableness, good faith and fair dealing, and (z)
the enforceability of rights to indemnity and contribution thereunder may be
limited by federal or state securities laws or principles of public policy.
-3-
(7) Except as disclosed in, or specifically contemplated by the Final
Memorandum and assuming your compliance with your representations and agreements
in Section 9 of the Purchase Agreement, the execution, delivery and performance
of the Purchase Agreement, the Indenture, the First Supplemental Indenture, the
Registration Rights Agreement, the Assumption Agreement, the Notes, the Shares
Purchase Agreement (assuming your compliance with your representations and
agreements in Section 9 thereof), the Shares Registration Rights Agreement and
the Shares Assumption Agreement by Acquisition and the Company, as applicable,
the compliance by Acquisition and the Company, as applicable, with all
provisions thereof, the consummation of the transactions contemplated thereby
will not (i) require any consent, approval, authorization or other order of, or
qualification with, any U.S. Federal or New York state court or governmental
body or agency (except such as may be required under the securities or Blue Sky
laws of the various states or in connection with the registration under the
Securities Act of the Notes in accordance with the Registration Rights Agreement
or the qualification of the Indenture as supplemented by the First Supplemental
Indenture under the Trust Indenture Act), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, any indenture,
loan agreement, mortgage, lease or other agreement or instrument, that is
identified to us by Acquisition and, at and as of the Effective Time, the
Company as material to Acquisition or the Company and its subsidiaries, taken as
a whole, to which Acquisition or, at and as of the Effective Time, the Company
or any of its subsidiaries is a party or by which Acquisition or, at and as of
the Effective Time, the Company or any of its subsidiaries or their respective
property is bound and set forth on Annex A hereto, (iii) violate or conflict
with any applicable U.S. Federal or New York state law or any rule, regulation,
judgment, order or decree of any U.S. Federal or New York state court or
governmental body or agency having jurisdiction over Acquisition or, at and as
of the Effective Time, the Company, any of its subsidiaries or their respective
property of which we have knowledge or (iv) result in the imposition of any lien
upon or with respect to any properties or assets now owned or hereafter acquired
by Acquisition or, at and as of the Effective Time, the Company or any of its
subsidiaries, except where the failure to obtain any such consent, approval,
authorization, order or qualification or where such conflicts, breaches,
defaults, failures, violations or liens would not have a Material Adverse Effect
or materially and adversely affect the issuance of the Notes.
(8) The execution, delivery and performance of the Credit Agreement
will not result in any violation of any United States Federal or New York State
law, rule or regulation.
(9) Except as set forth in the Final Memorandum, we do not know of
any outstanding options, warrants or other rights to purchase from Acquisition,
agreements or other obligations of Acquisition to issue or other rights to
convert any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in Acquisition or any holder of securities of
Acquisition that is entitled to have such securities registered under the
Registration Statement; and except as set forth in the Final Memorandum, we do
not know of
-4-
any agreement, understanding or arrangement among Acquisition and its
stockholders or any other person relating to the ownership or disposition of any
capital stock of Acquisition or the election of directors of Acquisition or the
governance of Acquisition's affairs, and, if any, such agreements,
understandings and arrangements will not be breached or violated as a result of
the execution and delivery of, or the consummation of the transactions
contemplated by, the Purchase Agreement and the other Transaction Documents.
(10) We do not know of (i) any legal, regulatory or governmental
proceedings pending or threatened to which Acquisition or the Company or any of
its subsidiaries is a party or to which any of their respective property is
subject, that are not disclosed in, or specifically contemplated by, the Final
Memorandum and which, if adversely decided, would be expected to result in a
Material Adverse Effect, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the Transactions or the issuance and sale
of the Notes or the application of the proceeds therefrom or the other
transactions described in the Final Memorandum; and (ii) any legal or
governmental proceedings, nor any contracts or other documents required by the
Securities Act to be described in a prospectus that have not been described in
the Final Memorandum.
(11) The execution, delivery, performance and, in particular, the
issuance of the Notes being purchased by you today and the use of the proceeds
thereof as contemplated by the Transactions will not result in a violation of
Regulations T, U or X of the Board of Governors of the United States Federal
Reserve System (12 C.F.R., Chapter II, as amended).
(11) Neither Acquisition nor, at and as of the Effective Time, the
Company or Texas New Mexico Power Company ("TNMP") is, and after giving effect
to the offering and sale of the Notes and the application of the net proceeds
thereof as described in the Final Memorandum neither Acquisition nor, at and as
of the Effective Time, the Company or TNMP will be, an investment company
required to be registered under the Investment Company Act of 1940, as amended.
(12) No securities of Acquisition or, at and as of the Effective
Time, the Company are of the same class (within the meaning of Rule 144A under
the Securities Act) as the Notes and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
(13) The Indenture as supplemented by the First Supplemental
Indenture complies as to form in all material respects with the requirements of
the Trust Indenture Act, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder (other than the
qualification of the Trustee thereunder); it is not necessary in connection with
the offer, sale and delivery of the Notes to you in the manner contemplated by
the Purchase Agreement or in connection with the initial resale of the Notes by
you in accordance with Section 9 of the Purchase Agreement to qualify the
Indenture as supplemented by the
-5-
First Supplemental Indenture under the Trust Indenture Act (it being understood
that no opinion is expressed as to any resale of any Notes subsequent to the
initial resale of the Notes by you in accordance with Section 9 of the Purchase
Agreement).
(14) No registration under the Securities Act of the Notes is
required for the sale of the Notes by the Company to you as contemplated by the
Purchase Agreement or for the initial resale of the Notes by you in accordance
with Section 9 of the Purchase Agreement (it being understood that no opinion is
expressed as to any resale of any Notes subsequent to the initial resale of the
Notes by you in accordance with Section 9 of the Purchase Agreement) assuming
that (i) each of you is a QIB or qualifies under Regulation S of the Securities
Act, (ii) the accuracy of, and compliance with, your representations, warranties
and agreements contained in Section 9 of the Purchase Agreement, (iii) the
accuracy of the representations of the Company set forth in Sections 2(x), (y),
and (dd) and 5(ix) of the Purchase Agreement, and (iv) that the Notes are
issued, sold and delivered under the circumstances contemplated by the Final
Memorandum and the Purchase Agreement.
Exhibit B-2
-----------
Form of Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
--------------------------------------------------
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., special Texas counsel to
Acquisition and, at and as of the Effective Time, the Company, to the effect
that:
(i) Acquisition has been duly incorporated and is validly existing in
good standing as a corporation under the laws of the State of Texas.
(ii) Acquisition has the authorized, issued and outstanding
capitalization set forth in Section 4.08 of the Merger Agreement; all of
the outstanding shares of capital stock of Acquisition have been duly
authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights.
(iii) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes, the Exchange
Notes (as defined in the Registration Rights Agreement) and the Private
Exchange Notes (as defined in the Registration Rights Agreement). The
Notes, the Exchange Notes and the Private Exchange Notes have each been
duly and validly authorized by Acquisition for issuance and, when executed
by the Acquisition and authenticated by the Trustee in accordance with the
provisions of the Indenture, and, in the case the Notes, delivered to and
paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, will have been duly executed, issued and delivered.
(iv) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture has been duly and validly authorized, executed and delivered by
Acquisition.
(v) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreement.
The Purchase Agreement has been duly and validly authorized, executed and
delivered by Acquisition.
(vi) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by Acquisition.
-2-
(vii) Acquisition has the requisite corporate power and authority to
execute, deliver and perform its obligations under the other Transaction
Documents not specified in the foregoing opinions to which it is a party.
Such other Transaction Documents have been duly and validly authorized by
Acquisition and executed and delivered by Acquisition. The Merger
Agreement constitutes a valid and legally binding agreement of Acquisition,
enforceable against Acquisition in accordance with its terms except that
the enforcement thereof may be limited by the Enforceability Exceptions.
(viii) To the best of our knowledge, without any independent
investigation, no consent, approval, authorization, license, qualification,
exemption or order of any court or governmental agency or body or third
party is required for the performance of the Purchase Agreement, the
Registration Rights Agreement, the Assumption Agreement, the Notes, the
Indenture, the First Supplemental Indenture or any Transaction Document by
Acquisition or for the consummation by Acquisition of any of the
transactions contemplated thereby, or the application of the proceeds of
the issuance of the Notes as described in the Final Memorandum, except as
has already been acquired or as may be required under state securities or
"Blue Sky" laws in connection with the purchase and distribution of the
Notes by the Initial Purchasers; to the best knowledge of such counsel,
without any independent investigation, all such consents, approvals,
authorizations, licenses, qualifications, exemptions and orders set forth
in the Final Memorandum which are required to be obtained by the Closing
Date have been obtained or made, as the case may be, and are in full force
and effect and not the subject of any pending or threatened attack by
appeal or direct proceeding or otherwise.
(ix) The execution, delivery and performance by Acquisition of the
Purchase Agreement, the Registration Rights Agreement, the Notes, the
Indenture and the Transaction Documents and the consummation by Acquisition
of the transactions contemplated thereby and by the Final Memorandum and
the fulfillment of the terms thereof will not (a) violate, conflict with or
constitute or result in a breach of (or an event that, with notice or lapse
of time, or both, would constitute a breach of) the articles of
incorporation or bylaws of Acquisition, (b) to the best of our knowledge,
without any independent investigation, violate, conflict with or constitute
or result in a breach of or a default under (or an event that, with notice
or lapse of time, or both, would constitute a breach of or a default under)
any of (i) the terms or provisions of any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which Acquisition is a
party or to which any of its properties or assets are subject or (ii)
(assuming compliance with all applicable state securities or "Blue Sky"
laws) any statute, judgment, decree, order, rule or regulation of any court
or governmental agency or other body applicable to Acquisition or any of
its properties or assets or (c) result in the imposition of any lien upon
or with respect to any of the properties or assets now owned
-3-
or hereafter acquired by Acquisition, which violation, conflict, breach,
default or lien would, individually or in the aggregate, have a Material
Adverse Effect.
(x) Except as described in the Final Memorandum, to the best or our
knowledge, without any independent investigation, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the Transactions or the issuance or
sale of the Notes or the application of the proceeds therefrom or the other
transactions described in the Final Memorandum.
(xi) At and as of the Effective Time, the Company will have the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Notes, the Exchange Notes (as defined in the
Registration Rights Agreement) and the Private Exchange Notes (as defined
in the Registration Rights Agreement). Immediately after the Effective
Time, the Notes, the Exchange Notes and the Private Exchange Notes will
have each been duly and validly authorized by the Company for issuance and,
when executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture as supplemented by the First
Supplemental Indenture, and, in the case of the Notes, delivered to the
Initial Purchasers upon cancellation of the Notes issued by Acquisition in
accordance with the terms of the Indenture as supplemented by the First
Supplemental Indenture, will have been duly executed, issued and delivered.
(xii) At and as of the Effective Time, the Company will have the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Indenture as supplemented by the First Supplemental
Indenture. The Indenture as supplemented by the First Supplemental
Indenture has been duly and validly authorized, executed and delivered by
the Company.
(xiii) At and as of the Effective Time, the Company will have the
requisite corporate power and authority to execute and deliver the
Assumption Agreement and perform its obligations under the Purchase
Agreement and the Registration Rights Agreement. Immediately after the
Effective Time, the Assumption Agreement, the Purchase Agreement and the
Registration Rights Agreement will have each been duly and validly
authorized by the Company and the Assumption Agreement will have been duly
and validly executed and delivered by the Company.
(xiv) At and as of the Effective Time, the Company will have the
requisite corporate power and authority to execute, deliver and perform its
obligations under the other Transaction Documents (other than the Merger
Agreement) not specified in the opinions set forth in paragraphs (xi)
through (xiii) above to which it is a party. Immediately
-4-
after the Effective Time, such other Transaction Documents will have been
duly and validly authorized, executed and delivered by the Company.
(xv) Upon the issuance by the Secretary of State of Texas of a
certificate of merger, the Merger will be effective under Texas law.
Exhibit B-3
-----------
Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
-------------------------------------
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special Texas counsel of the Company, to the
effect that:
(i) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Merger Agreement. The
Merger Agreement has been duly and validly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms except
that the enforcement thereof may be limited by the Enforceability Exceptions.
(ii) The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Assumption Agreement,
the Notes, the Indenture, the First Supplemental Indenture and the other
Transaction Documents and the consummation by the Company of the transactions
contemplated thereby and by the Final Memorandum and the fulfillment of the
terms thereof will not violate, conflict with or constitute or result in a
breach of or a default under (or an event that, with notice or lapse of time, or
both, would constitute a breach of or a default under) (i) the articles of
incorporation or bylaws of any of the Company or any of its subsidiaries (or
similar organizational documents) or (ii) (assuming compliance with all
applicable federal and state securities or "Blue Sky" laws, the Public Utility
Regulatory Act, tex. util. code (S) 1.001 et seq. and the rules and regulations
of the Public Utility Commission of Texas) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or other body applicable
to the Company or any of its subsidiaries or any of their respective properties
or assets.
(iii) The Merger has become effective under Texas law.
Exhibit B-4
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Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel of the Company, to the
effect that:
(i) Each of the Company and its subsidiaries has been duly
incorporated and each of the Company and its subsidiaries is validly existing in
good standing as a corporation under the laws of the State of Texas, with the
requisite corporate power and authority to own its properties and conduct its
business as now conducted as described in the Final Memorandum and is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on the general affairs, management, business, financial condition,
properties or results of operations of the Company and its subsidiaries, taken
as a whole (any such event, a "Material Adverse Effect").
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; to my best knowledge, except
as set forth in Section 3.01 of the Company Disclosure Letter (as defined in the
Merger Agreement), the Company does not have subsidiaries or own directly or
indirectly any of the capital stock or other equity or long-term debt securities
of or have any equity interest in any other person; all of the outstanding
shares of the Company and the subsidiaries of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in violation of any preemptive or similar rights, and are owned free and
clear of all liens, encumbrances, equities, restrictions on transferability
(other than those imposed by the Securities Act and the state securities or
"Blue Sky" laws) or voting; except as set forth in Section 3.01 of the Company
Disclosure Letter, all of the outstanding shares of capital stock of the
Company's subsidiaries are owned, directly or indirectly, by the Company.
(iii) Except as set forth in the Final Memorandum, no options,
warrants or other rights to purchase from the Company or any of its
subsidiaries, agreements or other obligations of the Company or any of its
subsidiaries to issue or other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership interests
in the Company or any of its subsidiaries are outstanding and no holder of
securities of the company or any of its subsidiaries is entitled to have such
securities registered under the Registration Statement; and except as set forth
in the Final Memorandum, to my best knowledge, there is no agreement,
understanding or arrangement among the Company or any of its subsidiaries and
each of their respective shareholders or any other person relating to the
ownership or disposition
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of any capital stock of the company or any of its subsidiaries or the election
of directors of the Company or any of its subsidiaries or the governance of the
Company's or any of its subsidiaries affairs, and, if any, such agreements,
understanding, and arrangements will not be breached or violated as a result of
the execution and delivery of, or the consummation of the transactions
contemplated by, the Purchase Agreement and the other Transaction Documents.
(iv) The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Assumption Agreement,
the Notes, the Indenture and the First Supplemental Indenture and the
consummation by the Company of the transactions contemplated thereby and by the
Final Memorandum and the fulfillment of the terms thereof will not (a) violate,
conflict with or constitute or result in a breach of or a default (or an event
that, with notice or lapse of time, or both, would constitute a breach of or a
default) under the terms or provisions of any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or instrument to which the Company or any of its
subsidiaries is a party or to which any of their respective properties or assets
are subject, or (b) result in the imposition of any lien upon or with respect to
any of the properties or assets now owned or hereafter acquired by the Company
or any of its subsidiaries, which violation, conflict, breach, default or lien
would, individually or in the aggregate, have a Material Adverse Effect.
(v) To my best knowledge, none of the Company or its subsidiaries has
received any notice of infringement of or conflict with (or knows of any such
infringement of or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights that, if such
assertion of infringement or conflict were sustained, would, individually or in
the aggregate, have a Material Adverse Effect.
(vi) Each of the Company and its subsidiaries possesses all Permits
presently required or necessary to own or lease, as the case may be, and to
operate its respective properties and to carry on its respective business as now
or proposed to be conducted as set forth in the Final Memorandum, except where
the failure to obtains such permits would not, individually or in the aggregate,
have a Material Adverse Effect; each of the Company and its subsidiaries has
fulfilled and performed all of its obligations with respect to such Permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and, to my best
knowledge, none of the Company or its subsidiaries has received any notice of
any proceeding relating to revocation or modification of any such Permit, except
as described in the Final Memorandum or except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this opinion, "Permits" is defined as all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and all declarations and filings with, all federal, state,
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local and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals presently required or necessary to own or lease,
as the case may be, and to operate the Company's respective businesses as now or
proposed to be conducted as set forth in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum).
(vii) The statements set forth in the Final Memorandum under the
captions "Risk Factors -- Factors Relating to TNP and its Subsidiaries,"
"Business -- Amendments to TNP and TNMP's Articles of Incorporation," and
"Description of Certain Indebtedness and Preferred Equity -- TNMP -- Preferred
Equity" insofar as such statements purport to summarize legal documents or
provisions thereof, are fair summaries of the documents or provisions thereof so
summarized.
Exhibit B-5
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Form of Opinion of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
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Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., special Texas regulatory counsel to
the Company, to the effect that:
1. All consents, authorizations, and approvals needed for the
execution, delivery, and completion of the Transaction Documents under the
requirements of the Public Utility Act, tex. util. code (S) 1.001 et seq. and
the rules and regulations of the PUCT have been obtained and the February 22,
2000 Order of the PUC in Docket No. 21112 finding the merger of ST Acquisitions,
Inc. and TNP Enterprises, Inc. to be in the public interest is in full force and
effect and is not, to the best knowledge of counsel, the subject of any pending
or threatened attack by appeal, direct proceeding, or otherwise.
2. We are of the opinion that the statements set forth under the
captions "Risk Factors--Factors Relating to the Regulatory Environment--Adverse
Effects of Government Regulation" and "Business--Government Regulations;
Regulatory Matters (Texas)" in the Final Memorandum, insofar as such statements
purport to summarize Texas law and regulations pertaining to the PUCT's
regulation of public utilities and to summarize orders of the PUCT and insofar
as such statements are summaries of matters of law or legal conclusions, are
accurate summaries in all material respects.
Exhibit B-6
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Form of Opinion of ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, Alley & ▇▇▇▇▇
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Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇, ▇▇▇▇, Salazar, Alley & ▇▇▇▇▇, special New Mexico
regulatory counsel to the Company, to the effect that:
1. A sufficient and valid order authorizing the Company to enter into
the transactions referred to in the Purchase Agreement has been entered by the
New Mexico Public Regulation Commission (the Order dated January 18, 2000), and,
to our knowledge after due inquiry, the Order is still in full force and effect,
and no other or further order, approval, authorization, license, qualification,
exemption or consent of, or registration or filing with, the New Mexico Public
Regulation Commission, or any other court or governmental agency, body or
official of New Mexico is legally required for the performance of the Purchase
Agreement, the Registration Rights Agreement, the Assumption Agreement, the
Notes, the Indenture, the First Supplemental Indenture or any Transaction
Document by the Company or for the consummation by the Company of any of the
transactions contemplated thereby, or the application of the proceeds of the
issuance of the Notes as described in the Final Memorandum, except as has
already been acquired (or as may be required under state securities or "Blue
Sky" laws in connection with the purchase and distribution of the Notes by the
Initial Purchasers as to which we express no opinion). All such consents,
approvals, authorizations, licenses, qualifications, exemptions and orders set
forth in the Final Memorandum which are required to be obtained by the Closing
Date have been obtained or made, as the case may be, and are in full force and
effect. To our knowledge after due inquiry, no investigation, action, suit or
proceeding is pending or threatened against the Company in New Mexico that
seeks, or reasonably is expected, to rescind, terminate, modify or suspend any
such government approval.
2. The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Assumption Agreement,
the Notes, the Indenture, the First Supplemental Indenture and the other
Transaction Documents and the consummation by the Company of the transactions
contemplated thereby and by the Final Memorandum and the fulfillment of the
terms thereof, to our knowledge after due inquiry, will not (a) violate,
conflict with or constitute or result in a breach of or a default under (or an
event that, with notice or lapse of time, or both, would constitute a breach of
or a default under) any of (i) the terms or provisions of any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which the
Company or any of its subsidiaries is a party or to which any of their
respective properties or assets are subject, (ii) the articles of incorporation
or bylaws of any of the Company or any of its subsidiaries (or similar
organizational document), or (iii) (assuming
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compliance with all applicable state securities or "Blue Sky" laws as to which
we express no opinion) any statute, judgment, decree, order, rule or regulation
of any court or governmental agency or other body of the State of New Mexico
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets or (b) result in the imposition of any lien upon or with
respect to any of the properties or assets now owned or hereafter acquired by
the Company or any of its subsidiaries, which violation, conflict, breach,
default or lien would, individually or in the aggregate, have a Material Adverse
Effect in each case under the laws of New Mexico.
3. The statements set forth under the captions "Risk Factors --
Factors Relating to the Regulatory Environment," and "Business -- Government
Regulations; Regulatory Matters, New Mexico" in the Final Memorandum, insofar as
such statements purport to summarize legal documents, are fair summaries of the
documents so summarized and, insofar as such statements are summaries of matters
of law or legal conclusions for the State of New Mexico, are accurate summaries
in all material respects.