Exhibit 1.1
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ALLEGHENY ENERGY SUPPLY COMPANY, LLC
$400,000,000
7.80% Notes due 2011
PURCHASE AGREEMENT
March 9, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
As Representative of the Initial Purchasers,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Allegheny Energy Supply Company, LLC, a limited liability company
organized under the laws of the State of Delaware (the "Company"), proposes to
issue and sell to the several parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you (the "Representative") are acting as the
representative, $400,000,000 principal amount of its 7.80% Notes Due 2011 (the
"Securities"). The Securities are to be issued under an indenture (the
"Indenture") dated as of March 15, 2001, between the Company and Bank One Trust
Company, N.A., as trustee (the "Trustee"). The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Certain
terms used herein are defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Act in reliance upon exemptions
from the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated February 28, 2001 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated March 9, 2001 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Final Memorandum").
Each of the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, any references herein to the terms
"amend", "amendment" or "supplement" with respect to the Final Memorandum shall
be deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time which is incorporated by reference therein.
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement, to be dated as of March 15, 2001 (the "Registration Rights
Agreement"), pursuant to which the Company has agreed, among other things, to
file a registration statement with the Commission, registering the Securities or
the Exchange Securities (as defined in the Registration Rights Agreement) under
the Act.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Initial Purchaser as set forth below in this
Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; at the Execution Time and on
the Closing Date, the Final Memorandum did not, and will not (and any
amendment or supplement thereto, at the date thereof and, at the Closing
Date, will not), contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representation or warranty as
to the information contained in or omitted from the Preliminary Memorandum
or the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers through the
Representative specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under
the Act.
(c) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(e) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any of the Securities
(except as contemplated by this Agreement).
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(f) The Company has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(g) Any information provided by the Company pursuant to Section 5(g)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) The Company has been duly organized and is existing in good
standing as a limited liability company under the Delaware Limited
Liability Company Act. The Company has all requisite power and authority
under the Delaware Limited Liability Company Act to own, lease and operate
its properties and to conduct its business as described in the Final
Memorandum, and is duly qualified as a foreign limited liability company to
transact business and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to
so qualify or be in good standing would not result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company (a "Material Adverse
Effect").
(i) Allegheny Energy, Inc. is the only member of the Company and owns
all of the Company's outstanding limited liability company interests, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. Allegheny Energy, Inc. is not obligated personally for any debt,
obligation or liability of the Company solely by reason of being a member
of the Company or owning its limited liability company interests.
(j) The Company does not have any significant subsidiaries (as such
term is defined in Rule1-02 of Regulation S-X promulgated under the Act)
other than Allegheny Generating Company.
(k) The statements in the Final Memorandum under the heading
"Description of Notes" fairly summarize in all material respects the
matters therein described.
(l) This Agreement has been duly authorized, executed and delivered
by the Company; the Registration Rights Agreement has been duly authorized
by the Company and, when executed and delivered by the Company, will
constitute a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; the Indenture has been
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duly authorized by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, when executed and delivered by the
Company, will constitute a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(m) The Securities and the Exchange Securities have each been duly
authorized by the Company, and, when executed and authenticated in
accordance with the provisions of the Indenture and, in the case of the
Securities, when delivered to and paid for by the Initial Purchasers in
accordance with the provisions of this Agreement and, in the case of the
Exchange Securities, when the Indenture has been duly qualified under the
Trust Indenture Act and the Exchange Securities have been exchanged for the
Securities pursuant to the Registration Rights Agreement, will have been
duly executed and delivered by the Company and will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(n) No consent, approval, authorization, filing with or order of any
court or governmental agency or body, including the Commission and any
applicable state utility commission, is required in connection with the
transactions contemplated herein or in the Indenture, except (i) such as
have been previously made, obtained or rendered, (ii) such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Initial Purchasers in
the manner contemplated herein and in the Final Memorandum or (iii) such as
may be required under the Act and the Trust Indenture Act in connection
with the Registered Exchange Offer and Shelf Registration (each as defined
in the Registration Rights Agreement).
(o) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issue and sale of the
Securities, nor the consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof or thereof
will conflict with, or result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, (i) the certificate of formation or limited liability company
agreement of the Company; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company is a
party or bound or to which its property is subject; or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to the Company
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
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Company or any of its properties, except, with respect to clause (ii)
above, for such conflicts, breaches, violations or impositions that would
not result in a Material Adverse Effect.
(p) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance by the Company of this
Agreement, the Registration Rights Agreement or the Indenture, or the
consummation of any of the transactions contemplated hereby or thereby; or
(ii) could reasonably be expected to have a Material Adverse Effect, except
as set forth in or contemplated in the Final Memorandum.
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and delivered their report with respect to the
audited financial statements and schedules incorporated by reference in the
Final Memorandum, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(r) There are no stamp or other issuance or transfer taxes or duties
or other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the
Company of the Securities.
(s) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any directed selling efforts
with respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them in Regulation S.
(t) The Company is not in violation or default of (i) the certificate
of formation or limited liability company agreement of the Company; (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which
its property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
properties, except, with respect to clauses (ii) and (iii) above, for such
conflicts, breaches, violations or impositions that would not result in a
Material Adverse Effect.
Any certificate signed by any officer of the Company and delivered to
the Representative or counsel for the Initial Purchasers in connection with the
offering of the
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Securities shall be deemed a representation and warranty by the Company, as to
matters covered thereby, to each Initial Purchaser.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
99.145% of the principal amount thereof, plus accrued interest, if any, from
March 15, 2001 to the Closing Date, the principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities
shall be made at 10:00 a.m., New York City time, on March 15, 2001 or at such
time on such later date (not later than March 22, 2001) as the Representative
shall designate, which date and time may be postponed by agreement between the
Representative and the Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representative for the
respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representative of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representative shall otherwise instruct.
4. OFFERING BY INITIAL PURCHASERS. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to entities it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps
to ensure that the purchaser of such Securities is aware that such sale is
being made in reliance on Rule 144A or (ii) in accordance with the
restrictions set forth in Exhibit D.
(b) Neither it, nor any of its Affiliates, nor any person acting on
its behalf has made or will make offers or sales of the Securities by means
of any form of general solicitation or general advertising (within the
meaning of Regulation D).
5. AGREEMENTS OF THE COMPANY. The Company agrees with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request.
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(b) The Company will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated
by reference therein, without the prior written consent of the
Representative (which shall not be unreasonably withheld). The Company will
promptly advise the Representative when any document filed under the
Exchange Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representative),
any event occurs as a result of which the Final Memorandum, as then amended
or supplemented, would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if it should be necessary to amend or supplement the Final
Memorandum to comply with applicable law, the Company promptly (i) will
notify the Representative of any such event; (ii) subject to the
requirements of paragraph (b) of this Section 5, will prepare an amendment
or supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to each Initial Purchaser and counsel for the Initial
Purchasers, without charge, in such quantities as it may reasonably
request; PROVIDED that should such event relate solely to the activities of
any of the Initial Purchasers, then the Initial Purchasers shall assume all
of the expenses in connection with preparing any such supplement or
amendment.
(d) The Company will not, and will not permit any of its Affiliates
to, resell any Securities that have been acquired by any of them.
(e) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the Act.
(f) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities.
(g) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Company will,
during any period in which it is not subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Act. This
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covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of
such restricted securities.
(h) The Company will cooperate with the Representative and use its
reasonable best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(i) The Company will not during the period from the Execution Time
until the Closing Date, without the prior written consent of the
Representative, offer, sell or contract to sell, or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company ), directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than the Securities).
(j) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(k) The Company agrees to pay the costs and expenses (except transfer
taxes) relating to the following matters: (i) the preparation of the
Indenture, the issuance of the Securities and the fees of the Trustee; (ii)
the preparation, printing or reproduction of the Preliminary Memorandum and
Final Memorandum and each amendment or supplement to either of them; (iii)
the printing and delivery of such copies of the Preliminary Memorandum and
Final Memorandum, and all amendments or supplements to either of them, as
may, in each case, be reasonably requested for use in connection with the
offering and sale of the Securities, except as otherwise provided in
paragraph (c) of this Section; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original
issuance and sale of the Securities; (v) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (vi) any registration or qualification
of the Securities for offer and sale under the securities or blue sky laws
of the several states (including filing fees and the reasonable fees and
expenses of counsel for the Initial Purchasers relating to such
registration and qualification); (vii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local
and special counsel) for the Company; and (viii) all other costs and
expenses incident to the performance by the Company of its obligations
hereunder.
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(l) Neither the Company nor any of its Affiliates, nor any person
acting on its or their behalf will engage in any directed selling efforts
with respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given them by Regulation S.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time and the Closing Date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Company shall have requested and caused ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President, Legal Services, of the Company, to furnish to the
Representative his opinion, dated the Closing Date and addressed to the
Representative, to the effect set forth in Exhibit A hereto.
(b) The Company shall have requested and caused ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Company, to furnish to the Representative its opinion,
dated the Closing Date and addressed to the Representative, to the effect
set forth in Exhibit B hereto.
(c) The Representative shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, such opinion, dated the
Closing Date and addressed to the Representative, with respect to the
issuance and sale of the Securities, the Indenture, the Registration Rights
Agreement, the Final Memorandum (as amended or supplemented at the Closing
Date) and other related matters as the Representative may reasonably
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(d) The Company shall have furnished to the Representative a
certificate signed by the President or any Vice-President and the principal
financial or accounting officer of the Company, dated the Closing Date, to
the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date;
and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no Material Adverse
Effect, except as set forth in or contemplated by the Final
Memorandum.
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(e) At the Execution Time and the Closing Date, the Company shall
have requested and caused PricewaterhouseCoopers LLP to furnish to the
Representative a letter, dated as of the Execution Time and the Closing
Date, in form and substance reasonably satisfactory to the Representative,
to the effect set forth in Exhibit C hereto.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, (exclusive of any
amendment or supplement thereto), there shall not have been any change, or
any development involving a prospective change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto) the effect of which is,
in the judgment of the Representative, so material and adverse as to make
it impractical or inadvisable to market the Securities as contemplated by
the Final Memorandum (exclusive of any amendment or supplement thereto).
(g) The Securities shall be eligible for clearance and settlement
through The Depository Trust Company.
(h) Subsequent to the Execution Time and prior to the Closing Date,
there shall not have been any downgrading in the rating of any of the
Company's debt securities by ▇▇▇▇▇'▇ Investors Service, Inc. or by Standard
& Poor's Ratings Services and neither such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Company's debt securities.
(i) Prior to the Closing Date, the Company shall have furnished to
the Representative such further information, certificates and documents as
the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the Initial Purchasers, this
Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by notice to the Company
by the Representative in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. REIMBURSEMENT OF EXPENSES. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial
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Purchasers set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Initial Purchasers, the Company will reimburse the Initial Purchasers severally
through the Representative on demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law 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 of a material fact
contained in the Preliminary Memorandum or the Final Memorandum (or in any
supplement or amendment thereto), or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any reasonable legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or omission made in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchasers through the
Representative specifically for inclusion therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, each of its employees and agents, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Initial Purchaser,
but only with reference to written information relating to such Initial
Purchaser furnished to the Company by or on behalf of such Initial Purchaser
through the Representative specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
This indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have.
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(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 in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; PROVIDED, HOWEVER, that in no case shall any Initial Purchaser
(except as may be provided
-12-
in any agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions in each case set forth on the
cover of the Final Memorandum. Relative fault shall be determined by reference
to, among other things, whether any untrue statement of a material fact or the
omission to state a material fact relates to information provided by the Company
on the one hand or the Initial Purchasers on the other, the intent of the
parties and their relative knowledge, information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contributions were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act and each officer, employee, agent and director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN INITIAL PURCHASER. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities,
-13-
this Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date may be postponed for such period,
not exceeding five Business Days, as the Representative shall request in order
that the required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company or to
any nondefaulting Initial Purchaser for damages occasioned by its default
hereunder.
10. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in securities on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been established on such
exchange; (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities; (iii) there has been any Material Adverse Effect;
or (iv) there shall have occurred an outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representative, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers, the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc. at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Company, to the President (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President; with a copy to the Legal Department (fax no.: (301)
▇▇▇-▇▇▇▇) and confirmed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Legal Department.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly
-14-
set forth in Section 5(g) hereof, no other person will have any right or
obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
-15-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company and the several Initial Purchasers.
Very truly yours,
ALLEGHENY ENERGY SUPPLY COMPANY, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman and CEO
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
For itself and the other several
Initial Purchasers named in
Schedule I to the foregoing
Agreement.
-16-
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
INITIAL PURCHASERS TO BE PURCHASED
------------------ ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc..................................... $256,000,000
Banc of America Securities LLC............................... 36,000,000
Chase Securities Inc......................................... 36,000,000
Mellon Financial Markets, LLC................................ 36,000,000
SunTrust Equitable Securities Corporation.................... 36,000,000
------------
Total...................................... $400,000,000
============
-17-
EXHIBIT A
Form of opinion of the counsel of the Company
[Allegheny Energy Supply Company, LLC Letterhead]
March 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
As Representative of the Initial Purchasers,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Allegheny Energy Supply Company, LLC - 7.80% Notes
due 2011
--------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase today by you pursuant to the Purchase
Agreement, dated March 9, 2001 (the "Purchase Agreement"), between Allegheny
Energy Supply Company, LLC, a Delaware limited liability company (the
"Company"), and you, of $400,000,000 principal amount of the Company's 7.80%
Notes due 2011 (the "Securities") issued pursuant to the Indenture, dated as of
March 15, 2001 (the "Indenture"), between the Company and Bank One Trust
Company, N.A., as trustee (the "Trustee"), I, as counsel for the Company, or
attorneys under my supervision, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
On the basis of the foregoing, I am of the opinion that:
1. The Company is duly qualified and in good standing as a foreign
limited liability company under the laws of the [Commonwealth of Pennsylvania,
West Virginia, Maryland, New Jersey, Virginia, Ohio, Arizona, Delaware, Indiana
and the District of Columbia].
2. Allegheny Energy, Inc. is the only member of the Company and owns
all of the Company's outstanding limited liability company interests, free and
clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
Allegheny Energy, Inc. is not obligated personally for any debt, obligation or
liability of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Company solely by reason of being a member of the Company or owning its limited
liability company interests.
3. The Company has such valid franchises, licenses and permits, free
of burdensome restrictions, as are necessary for the adequate conduct of its
business.
4. I know of no material pending legal proceedings to which the
Company is or may be a party or of which property of the Company is or may be
the subject which depart from the ordinary routine litigation incident to the
kinds of business conducted by the Company and which are not referred to in the
Offering Memorandum relating to the Securities (the "Offering Memorandum").
5. I have no reason to believe that any part of the Offering
Memorandum as of its date, or as of the date hereof, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
6. The issue and sale of the Securities and the compliance by the
Company with all the provisions of the Securities, the Indenture, the Purchase
Agreement and the Registration Rights Agreement dated as of March 15, 2001,
among the Company and you, and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to me to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the certificate of
formation or limited liability company agreement of the Company or any statute
or any order, rule or regulation known to me of any court or governmental agency
or body having jurisdiction over the Company or any of its properties.
In giving this opinion, I am assuming that the Securities will conform
to the form thereof examined by me and that the signatures on all documents
examined by me are genuine, assumptions which I have not independently verified.
I am a member of the Maryland, Pennsylvania and West Virginia Bars.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
cc: Bank One Trust Company, N.A.
as Trustee
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
A-2
EXHIBIT B
Form of opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Pursuant to Section 6(b)
March 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
As Representative of the Initial Purchasers,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
In connection with the purchase today by you pursuant to the Purchase
Agreement, dated March 9, 2001, among Allegheny Energy Supply Company, LLC, a
Delaware limited liability company (the "Company"), and you, of $400,000,000
principal amount of the Company's 7.80% Notes due 2011 (the "Securities") issued
pursuant to the Indenture, dated as of March 15, 2001 (the "Indenture"), between
the Company and Bank One Trust Company, N.A., as trustee (the "Trustee"), we, as
counsel for the Company, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, it is our opinion that:
(1) The Company has been duly organized and is existing in good
standing as a limited liability company under the Delaware Limited Liability
Company Act. The Company has all requisite power and authority under the
Delaware Limited Liability Company Act to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum relating to
the Securities (the "Offering Memorandum").
(2) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity
principles, except that certain provisions
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. -2-
of the Indenture providing in case of default for payment of interest on overdue
installments of interest may not be enforceable.
(3) The Securities have been duly authorized, executed and delivered
by the Company and, assuming due authentication thereof by the Trustee and upon
payment therefor by the Initial Purchasers in accordance with the provisions of
the Purchase Agreement, will constitute valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors rights and to general
equity principles.
(4) The Securities are unsecured and rank equally with all of the
Company's other unsecured and unsubordinated indebtedness. The Securities will
be effectively subordinated to all of the Company's secured debt, if any.
(5) Each of the Purchase Agreement and the Registration Rights
Agreement, dated as of March 15, 2001, between the Company and you, has been
duly authorized, executed and delivered by the Company.
(6) No registration of the Securities under the Securities Act of
1933, as amended (the "Act"), or qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, is required for (i) the sale and delivery of
the Securities by the Company to the Initial Purchasers or (ii) the offer and
initial resale of the Securities by the Initial Purchasers to "qualified
institutional buyers" (as defined in Rule 144A under the Act), in each case in
the manner contemplated by the Purchase Agreement. However, we express no
opinion as to any subsequent reoffer or resale of the Securities.
(7) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of the
United States for the issuance, sale and delivery of the Securities by the
Company to you have been obtained or made.
In connection with our opinion set forth in paragraph (6) above, we
have, with your approval, relied upon the representations, warranties,
agreements and undertakings of the Company, and the Initial Purchasers in the
Purchase Agreement with respect to (i) the absence of any general solicitation
or general advertising in connection with the offering and sale of the
Securities, (ii) the absence of any directed selling efforts (as defined in
Regulation S under the Act) and (iii) certain other matters. Insofar as such
opinion relates to the sale and delivery of the Securities by the Company to the
Initial Purchasers, we have, with your approval, assumed that any offers and
resales of the Securities by the Initial Purchasers will be made in accordance
with the Purchase Agreement.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York and the Limited Liability Company
Act of the
B-2
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. -3-
State of Delaware, and we are expressing no opinion as to the effect of the laws
of any other jurisdiction.
Also, with your approval, we have relied as to certain matters on
information obtained from public officials, officers of the Company and other
sources believed by us to be responsible, and we have assumed that the Indenture
has been duly authorized, executed and delivered by the Trustee, that the
Securities will conform to the specimen thereof examined by us, that the
Trustee's certificates of authentication of the Securities have been manually
signed by one of the Trustee's authorized officers and that the signatures on
all documents examined by us are genuine, assumptions which we have not
independently verified.
Very truly yours,
B-3
March 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
As Representative of the Initial Purchasers,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
This is with reference to the Offering Memorandum, dated March 9, 2001
(together with the documents incorporated by reference therein, the "Offering
Memorandum"), relating to $400,000,000 principal amount of 7.80% Notes due 2011
(the "Securities") of Allegheny Energy Supply Company, LLC, a Delaware limited
liability company (the "Company").
As counsel to the Company, we reviewed the Offering Memorandum and
participated in discussions with your representatives and those of the Company
and its accountants. Between the date of the Offering Memorandum and the time of
delivery of this letter, we participated in further discussions with
representatives of the Company and its accountants regarding the contents of
certain portions of the Offering Memorandum and certain related matters, and
reviewed certificates of certain officers of the Company, opinions addressed to
you from the Company's counsel and a letter addressed to you from the Company's
independent accountants. On the basis of the information that we
B-4
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. -2-
gained in the course of the performance of the services referred to above,
considered in the light of the experience we have gained through our practice in
this field, we confirm to you that nothing that came to our attention in the
course of such review has caused us to believe that the Offering Memorandum, as
of its date, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Also,
nothing that has come to our attention in the course of the procedures described
in the second sentence of this paragraph has caused us to believe that the
Offering Memorandum, as of the date and time of delivery of this letter,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the preparation of the
Offering Memorandum are such, however, that we do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum except for those made under the captions "Description of
Notes", insofar as they relate to provisions of the Indenture, dated as of March
15, 2001, between the Company and Bank One Trust Company, N.A., as trustee,
"Plan of Distribution", insofar as they relate to provisions of the Purchase
Agreement, dated March 9, 2001, among the Company and you, and "Important
Federal Income Tax Considerations", insofar as they relate to provisions of
Federal tax laws of the United States therein described. Also, we
-2-
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. -3-
do not express any opinion or belief as to the financial statements or other
financial data derived from accounting records contained in the Offering
Memorandum.
There is no specific statutory or regulatory authorization for
incorporation of information by reference in the Offering Memorandum, and we
express no opinion or belief as to whether such incorporation by reference is
effective with respect to information contained in documents that are not
received by the recipients of the Offering Memorandum.
This letter is furnished to you by us as counsel for the Company to
you as Representative of the Initial Purchasers and is solely for the benefit of
the Initial Purchasers.
Very truly yours,
-3-
EXHIBIT D
SELLING RESTRICTIONS FOR OFFERS AND SALES OUTSIDE THE UNITED STATES
-------------------------------------------------------------------
(a) The Securities have not been and will not be registered under the
Act and may 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 Act or pursuant to an exemption from the registration requirements of the
Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section (5)(a)(i) of the Purchase Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) 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 under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section (5)(a)(i) of the Purchase Agreement to which this
is an exhibit), it shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the distribution compliance period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and June 1, 2000,
except in either case in accordance with Regulation S or Rule 144A under
the Act. Terms used above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with
its Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
D-1