EXHITBIT 1.1
TNP ENTERPRISES, INC.
SW ACQUISITION, L.P.
100,000 Units Consisting of
100,000 Shares of 14 1/2% Senior Redeemable Preferred Stock of TNP Enterprises,
Inc.,
$1,000 Liquidation Preference Per Share,
and
100,000 Warrants to Purchase Limited Partnership Interests
in SW Acquisition, L.P.
PURCHASE AGREEMENT
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May 19, 2000
CIBC WORLD MARKETS CORP.
CHASE SECURITIES INC.
c/o CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TNP Enterprises, Inc., a Texas corporation (the "Company"), and SW
Acquisition, L.P., a Texas limited partnership (the "Partnership" and, together
with the Company, the "Issuers"), hereby confirm their agreement with you (the
"Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
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contained, the Issuers propose to issue and sell to the Initial Purchasers
100,000 units (the "Units"), each Unit consisting of one share (each an "Initial
Share") of the Company's 14 1/2% Senior Redeemable Preferred Stock, $1,000
liquidation preference per share (the "Shares;" when used in this agreement
(hereinafter this "Agreement" or the "Purchase Agreement") the term Shares shall
be deemed to include any and all Dividend Shares (as defined in Section 2(c))),
and one warrant (each a "Warrant") to purchase (at an exercise price of $.01 per
limited partnership interest) a limited partnership interest in the Partnership
(a "Limited Partnership Interest") entitling its holder to receive the amount a
limited partner who had made a $37.5388601 capital contribution (or 0.000035% of
total capital contributions as of the date of this Agreement) would receive of
the residual distributions made to all partners in accordance with their capital
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contributions after a return on capital and preferred distributions are made to
the limited partners (other than holders of Limited Partnership Interests issued
upon exercise of the Warrants) and the general partner, subject to adjustment.
The Limited Partnership Interests issuable upon exercise of the Warrants will
provide the holders with the same rights and obligations as are provided to
limited partners, except in certain cases where rights and obligations apply
only to the original limited partners and except for the right to receive the
preferred distributions and the benefits and obligations under certain tag-along
and right of first offer provisions.
The Units will be offered and sold to the Initial Purchasers without
such offers and sales being registered under the Securities Act of 1933, as
amended (together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the "Securities Act"), in
reliance on exemptions therefrom.
In connection with the sale of 10.25% Senior Subordinated Notes due
2007 (the "Notes") of ST Acquisition Corp., a Texas corporation which merged
with and into the Company, ST Acquisition Corp. prepared a final offering
memorandum dated April 4, 2000 (including the documents incorporated by
reference therein, the "Notes Memorandum"), 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. In connection
with the sale of the Units, the Issuers will prepare a final offering memorandum
supplement to the Notes Memorandum dated May 23, 2000 (including the documents
incorporated by reference therein, the "Memorandum Supplement"; the Notes
Memorandum as supplemented by the Memorandum Supplement is hereinafter referred
to as the "Final Memorandum"; and each of the Notes Memorandum, the Memorandum
Supplement and the Final Memorandum may be referred to hereinafter as a
"Memorandum"), setting forth or incorporating by reference a description of the
terms of the Shares, the Warrants and the Units, the terms of the offering of
the Units, a description of the Limited Partnership Agreement (as defined below)
and a description of 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 mean and include all such financial statements and schedules and other
information which is incorporated by reference in any Memorandum.
The Issuers understand that the Initial Purchasers propose to make an
offering of the Units only on the terms and in the manner set forth in the Final
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 rea-
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sonably 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 (ii) outside the United
States to certain persons in reliance on Regulation S under the Securities Act.
The Initial Purchasers and their direct and indirect transferees of
the Shares will be entitled to the benefits of the Registration Rights Agreement
to be dated as of May 26, 2000 among the Company and the Initial Purchasers (the
"Registration Rights Agreement") pursuant to which the Company has agreed, among
other things, to file (i) a registration statement (the "Registration
Statement") with the Commission registering the Shares or the Exchange Shares
(as defined in the Registration Rights Agreement) under the Securities Act or
(ii) a shelf registration statement pursuant to Rule 415 under the Securities
Act relating to the resale of the Shares by holders thereof or, if applicable,
relating to the resale of Private Exchange Shares (as defined in the
Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange
of the Shares for Private Exchange Shares. The Shares are to be issued pursuant
to a statement of resolution filed with the Secretary of State of the State of
Texas (the "Statement of Resolution") by the Company prior to the closing of the
offering of the Units.
The Warrants are to be issued pursuant to a Warrant Agreement (the
"Warrant Agreement") dated as of May 26, 2000 between the Partnership and The
Bank of New York, as warrant agent (the "Warrant Agent"), and the Partnership
will amend its Amended and Restated Agreement of Limited Partnership dated as of
April 7, 2000 (as amended, the "Limited Partnership Agreement") to provide for
the issuance of the Warrants and the Limited Partnership Interests. The Units
are to be issued under a Unit Agreement (the "Unit Agreement") dated as of May
26, 2000 among the Issuers and The Bank of New York, as unit agent (the "Unit
Agent"). The Shares, the Exchange Shares, the Private Exchange Shares, the
Statement of Resolution, the Registration Rights Agreement, the Warrants, the
Warrant Agreement, the Limited Partnership Interests, the Limited Partnership
Agreement, the Units, the Unit Agreement and this Agreement are herein
collectively referred to as the "Basic Documents."
2. Representations and Warranties. Each of the Issuers, jointly and
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severally, represents and warrants to and agrees with each Initial Purchaser
that:
(a) Neither the Notes 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 (as defined)
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
the Issuers in
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writing by any Initial Purchaser through CIBC World Markets Corp. or Chase
Securities Inc. expressly for use in the Notes Memorandum, the Final
Memorandum or any amendment or supplement thereto; provided that the pro
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forma financial information contained in the Notes Memorandum has been
superseded by the pro forma financial information contained in the
Quarterly Report of the Company on Form 10-Q for the quarter ended March
31, 2000 filed with the Commission on May 15, 2000, which is incorporated
by reference into the Final Memorandum. The documents incorporated or
deemed to be incorporated by reference in any Memorandum, at the time they
were or hereafter are 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) Each of the Company and its subsidiaries set forth in Exhibit A
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hereto 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 its jurisdiction of incorporation, 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; as of the Closing Date, the
Company will have the authorized, issued and outstanding capitalization set
forth in the Final Memorandum; except as set forth in Exhibit A hereto, the
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Company 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 the Company and its subsidiaries 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,
all of the outstanding shares of capital stock of its subsidiaries are
owned, directly or indirectly, by the Company; 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;
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and except as set forth in the Final Memorandum, there is no agreement,
understanding or arrangement among the Company or any of its subsidiaries
and each of their respective stockholders or any other person relating to
the ownership or disposition 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, 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 and
the other Basic Documents.
(c) The Partnership has been duly formed and is validly existing as a
limited partnership under the laws of Texas; except for the ownership of
all of the common stock of the Company, the Partnership does not have any
other material assets and has not conducted any other business; all of the
outstanding partnership interests of the Partnership 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, to the
knowledge of XX XX Acquisition LLC, a Texas limited liability company and
general partner of SW I Acquisition GP, L.P., a Texas limited partnership
and general partner of the Partnership, 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, no
options, warrants or other rights to purchase from the Partnership,
agreements or other obligations of the Partnership to issue or other rights
to convert any obligation into, or exchange any securities for, partnership
interests of or ownership interests in the Partnership are outstanding; and
except for the Limited Partnership Agreement, there is no agreement,
understanding or arrangement among the Partnership and its partners or any
other person relating to the ownership or disposition of any partnership
interests of the Partnership or the election of general partners of the
Partnership or the governance of the Partnership'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 and the other Basic
Documents.
(d) On or prior to the Closing Date, the Partnership will have all
requisite partnership power and authority to issue the Warrants. The
Warrants, when issued, will be in the form contemplated by the Warrant
Agreement. On or prior to the Closing Date, each of the Warrants will have
been duly and validly authorized by the Partnership and, when issued and
delivered in accordance with the provisions of the Warrant Agreement and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be validly issued, fully paid and
nonassessable; the issuance of the Warrants on the Closing Date will not be
subject to preemptive or
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similar rights; the certificates for the Warrants will be in due and proper
form; and the holders of the Warrants will not be subject to personal
liability by reason of being such holders.
(e) On or prior to the Closing Date, the Partnership will have all
requisite partnership power and authority to issue the Limited Partnership
Interests. The Limited Partnership Interests, when issued, will be in the
form contemplated by the Limited Partnership Agreement. On or prior to the
Closing Date, XX XX Acquisition LLC will be authorized to cause the
Partnership to issue and deliver each of the Limited Partnership Interests
and, when issued and delivered in accordance with the provisions of the
Warrant Agreement, the Warrants and the Limited Partnership Agreement, the
Limited Partnership Interests will be validly issued, fully paid and
nonassessable; the issuance of the Limited Partnership Interests upon
exercise of the Warrants will not be subject to preemptive or similar
rights; the certificates for the Limited Partnership Interests will be in
due and proper form; and the holders of the Limited Partnership Interests
will not be subject to personal liability by reason of being such holders.
On or prior to the Closing Date, the Limited Partnership Agreement will set
forth the rights of the Limited Partnership Interests.
(f) The Company has all requisite corporate power and authority to
issue the Initial Shares, any additional shares of Senior Redeemable
Preferred Stock, $1,000 liquidation preference per share, issued as
dividends in accordance with the terms of the Statement of Resolution (the
"Dividend Shares;" when used in this Agreement the term Dividend Shares
shall be deemed to include any Shares issued as Additional Dividends (as
defined in the Registration Rights Agreement)), the Exchange Shares and the
Private Exchange Shares. The Shares, when issued, will be in the form
contemplated by the Statement of Resolution. The Shares, the Exchange
Shares and the Private Exchange Shares have each been duly and validly
authorized by the Company and, when issued and delivered in accordance with
the provisions of the Statement of Resolution and, in the case of the
Initial Shares, when issued and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable; the issuance of the Shares is not
subject to preemptive or similar rights; and the holders of the Shares will
not be subject to personal liability by reason of being such holders. On
or prior to the Closing Date, the Company will have reserved for issuance,
and duly authorized the issuance of, the maximum number of Dividend Shares
issuable as dividends pursuant to the terms of the Statement of Resolution.
The Statement of Resolution sets forth the rights, preferences and
priorities of the Shares.
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(g) The Statement of Resolution has been duly authorized by the
Company. The Company has the requisite corporate power and authority to
perform its obligations under the Statement of Resolution.
(h) The Company has 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
the Company. This Agreement has been duly and validly 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 (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"), and
except as any rights to indemnity or contribution hereunder may be limited
by federal and state securities laws and public policy considerations.
(i) The Company has the requisite corporate power and authority to
execute, deliver and perform its respective obligations under the
Registration Rights Agreement. The Registration Rights Agreement has been
duly and validly authorized by the Company and (assuming the due
authorization, execution and delivery thereof by the Initial Purchasers),
when executed and delivered by the Company, 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 and except as any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations. The Shares, the
Statement of Resolution and the Registration Rights Agreement will conform
in all material respects to the descriptions thereof in the Final
Memorandum.
(j) The Partnership has all requisite partnership power and authority
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. XX XX Acquisition LLC is
authorized to cause the Partnership to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by XX XX Acquisition LLC and constitutes a valid and
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legally binding agreement of the Partnership, enforceable against the
Partnership 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.
(k) The Partnership has the requisite partnership power and authority
to execute, deliver and perform its respective obligations under the
Warrant Agreement. XX XX Acquisition LLC is authorized to cause the
Partnership to execute, deliver and perform its obligations under the
Warrant Agreement and to consummate the transactions contemplated thereby
and (assuming the due authorization, execution and delivery thereof by the
Warrant Agent), when executed and delivered by the Partnership, the Warrant
Agreement will constitute a valid and legally binding agreement of the
Partnership, enforceable against the Partnership 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 Warrants and the Warrant Agreement
will conform in all material respects to the descriptions thereof in the
Final Memorandum.
(l) The Unit Agreement has been duly and validly authorized by the
Company and XX XX Acquisition LLC is authorized to cause the Partnership to
execute, deliver and perform its obligations under the Unit Agreement. The
Units have been duly authorized by the Company and XX XX Acquisition LLC is
authorized to cause the Partnership to execute, deliver and perform its
obligations under the Units and, when issued and delivered by the Issuers
against payment therefor by the Initial Purchasers in accordance with the
terms of this Agreement, the Units will constitute valid and legally
binding obligations of the Issuers, enforceable against the Issuers 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.
(m) (i) The Issuers have delivered to the Initial Purchasers a true
and correct copy of each of the Basic Documents that have been executed and
delivered prior to the date of this Agreement and each other Basic 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 Basic Documents since their date of execution or from the
form in which any such Basic Document has been delivered to the Initial
Purchasers; and (ii) there exists as of the date hereof (after giving
effect to the transactions contem-
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plated by each of the Basic Documents) no event or condition that would
constitute a default or an event of default (in each case as defined in
each of the Basic Documents) under any of the Basic Documents that would
result in a material adverse effect on the general affairs, management,
business, financial condition, properties or results of operations of the
Partnership or 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 the Issuers to consummate the Basic Documents of the
transactions contemplated by the Basic Documents. 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 Basic Documents and the transactions
contemplated thereby on the Closing Date.
(n) 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 any Basic Document by the Partnership or the Company, as the case may
be, or for the consummation by the Partnership 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 Units 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 of the Units by the Initial Purchasers; 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, to the best
knowledge of the Issuers, threatened attack by appeal or direct proceeding
or otherwise.
(o) Neither the Company nor the Partnership is (i) in violation of
its articles of incorporation, bylaws or limited partnership agreement (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 any Basic 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
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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.
(p) The execution, delivery and performance by the Issuers (to the
extent each is a party thereto) of the Basic Documents and the consummation
by the Issuers of the transactions contemplated hereby and thereby and by
the Final 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
the Partnership, 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, bylaws or limited partnership agreement of any of the
Partnership, 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 body applicable
to the Partnership, 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 the Partnership, 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.
(q) The audited consolidated financial statements included in the
Final 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
interim unaudited consolidated financial statements included in the Final
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 subject to year-end audit adjustments and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis with the audited consolidated financial
statements included therein; the summary and selected financial and
statistical data included in the Final 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 of the Issuers' knowledge,
each of Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP, which has examined
certain of such financial statements as set forth in its reports, is an
independent public accounting firm as required by the Securities Act and
the Exchange Act.
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(r) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Quarterly Report
of the Company on Form 10-Q for the quarter ended March 31, 2000 filed with
the Commission on May 15, 2000 (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 are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to therein.
(s) Except as described in the Final Memorandum, there is not pending
or, to the best knowledge of the Issuers, threatened any action, suit,
proceeding, inquiry or investigation, governmental or otherwise, to which
any of the Partnership, 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 the Partnership, the Company or any such subsidiary
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Units to
be sold hereunder or the application of the proceeds therefrom or the other
transactions described in the Final Memorandum.
(t) Neither the Partnership nor the Company has, and, after giving
effect to the issuance and sale of the Units, will 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 the Partnership or the Company has or
could have any direct or indirect, actual or contingent liability. With
respect to any such plans, each of the Partnership and the Company is, and,
after giving effect to the issuance and sale of the Units, will be, in
compliance in all material respects with all provisions of the Code and
ERISA.
(u) Subsequent to the respective dates as of which information is
given in the Final Memorandum and except as described therein, (i) the
Partnership, 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) the Partnership, 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
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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 the
Partnership, 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 or
any legal or governmental proceeding.
(v) 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. Except as
described in the Final Memorandum, none of the Partnership, the Company or
its subsidiaries is in default under any of the contracts described in the
Final 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.
(w) None of the Partnership, the Company or its subsidiaries has
taken any action that would cause this Agreement or the issuance or sale of
the Shares 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.
(x) The Company 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 the Company 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 the Company that would, individually or in the
aggregate, have a Material Adverse Effect.
(y) (i) Immediately after the consummation of the transactions
contemplated by this Agreement and the other Basic Documents, the fair
value and present fair saleable value of the assets of each of the
Partnership, the Company and its subsidiaries will exceed the sum of its
stated liabilities and identified contingent liabilities; and (ii) each of
the Partnership, the Company and its subsidiaries is not, nor will it be,
after
-13-
giving effect to the execution, delivery and performance of this Agreement
and the other Basic Documents, and the consummation of the 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.
(z) Neither the Partnership nor the Company is, 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").
(aa) None of the Partnership, 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 Shares, the Warrants or the Units.
(bb) None of the Partnership, the Company or 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 Units in a manner that would require the
registration under the Securities Act of the Units 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 Units or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act. 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 Units to the Initial Purchasers in the manner contemplated
by this Agreement to register any of the Units under the Securities Act.
(cc) The Units are eligible for resale pursuant to Rule 144A and no
securities of the Partnership or the Company are of the same class (within
the meaning of Rule 144A under the Securities Act) as the Shares, the
Warrants or the Units 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.
(dd) No holder of securities of the Partnership, the Company or any
of its subsidiaries will be entitled to have such securities registered
under the registration statements required to be filed by the Partnership
or the Company pursuant to the Registration Rights Agreement other than as
expressly permitted thereby.
-14-
(ee) The statistical and market and industry-related data included in
the Final Memorandum are based on or derived from sources which the Issuers
believe to be reliable and accurate or represent the Issuers' good faith
estimates that are made on the basis of data derived from such sources.
(ff) Neither the Partnership, the Company nor any of their 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.
(gg) Except as stated in the Final Memorandum, the Issuers do not
know of any claims for services, either in the nature of a finder's fee or
financial advisory fee, with respect to the issuance and sale of the Units
and the transactions contemplated by the Final Memorandum.
(hh) None of the Partnership, 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 the Issuers make no
representations) has engaged in any directed selling efforts (as that term
is defined in Regulation S) with respect to the Shares, the Warrants or the
Units and the Partnership, 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.
(ii) The Company and its subsidiaries 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.
Any certificate signed by any officer of the Company or any of its
subsidiaries or the manager of XX XX Acquisition LLC in connection herewith and
delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a representation and warranty by the Issuers to each Initial
Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Units. On the basis of the
----------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchasers, and
-15-
each Initial Purchaser, acting severally and not jointly, agrees to purchase
from the Issuers, the Units, in the respective amounts set forth on Schedule 1
----------
hereto, at a purchase price of $955 per Unit.
One or more certificates in definitive form for the Units, the Shares
and the Warrants 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 the Issuers at least 48 hours
prior to the Closing Date shall be delivered by or on behalf of the Company,
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 the
Company previously designated by it in writing. Such delivery of and payment
for the Units shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 a.m., New York time, on May 26, 2000,
or at such date as the Initial Purchasers and the Issuers may agree upon, such
time and date of delivery against payment being herein referred to as the
"Closing Date." The Issuers will make such certificate or certificates for the
Shares, Warrants and Units 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 Units 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.
5. Certain Covenants. Each of the Issuers, jointly and severally,
-----------------
covenants and agrees with the Initial Purchasers that:
(i) Neither the Partnership nor the Company will 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). The Issuers will
promptly, upon the reasonable request of the Initial Purchasers or counsel
for the Initial Purchasers, make any amendments or supplements to the Final
Memorandum that may be necessary in connection with the resale of the Units
by the Initial Purchasers.
(ii) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Units 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 Units by the
Initial Purchasers; provided, however, that in connection therewith
-------- -------
-16-
neither the Partnership nor the Company shall be required to qualify as a
foreign limited partnership or 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 Warrants, the Shares or the Private Exchange
Shares, 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, the Issuers 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.
(iv) The Issuers will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers, as many copies of
each Notes Memorandum, Memorandum Supplement or Final Memorandum or any
amendment or supplement thereto as the Initial Purchasers may reasonably
request.
(v) None of the Partnership 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 Shares in a
manner which would require the registration under the Securities Act.
(vi) For so long as any of the Shares or the Warrants remain
outstanding, the Issuers will furnish to the Initial Purchasers (a) as soon
as available, a copy of each report or other communication (financial or
otherwise) of the Partnership and the Company, mailed to the any transfer
agent under the Statement of Resolution, the Warrant Agent, holders of the
Shares or stockholders or filed with the Commission or any national
securities exchange on which any class of securities of the Partnership or
the Company or any of its subsidiaries may be listed, and (b) from time to
time such other information concerning the Partnership, the Company and its
subsidiaries as the Initial Purchasers may reasonably request.
-17-
(vii) The Issuers will apply the net proceeds from the sale of the
Units as set forth under "Use of Proceeds" in the Final Memorandum.
(viii) The Issuers will not and the Company 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 Shares or the Warrants or in
any manner involving a public offering of the Share or the Warrants within
the meaning of Section 4(2) of the Securities Act.
(ix) For so long as any of the Shares, Warrants or Units remain
outstanding, the Issuers will make available at their expense, upon
request, to any holder of Shares, Warrants or Units and any prospective
purchasers thereof the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Partnership or the Company, as applicable, is
then subject to Section 13 or 15(d) of the Exchange Act.
(x) At the request of the Initial Purchasers, each of the Issuers
will use its best efforts to (i) permit the Shares, the Warrants and the
Units to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities 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 Shares, Warrants and Units to be eligible for clearance and
settlement through The Depository Trust Company.
(xi) In connection with Shares, Warrants or Units offered and sold
in an offshore transaction (as defined in Regulation S), the Issuers will
not, register any transfer of such Shares, Warrants or Units 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 Shares, Warrants or Units in the form of definitive securities.
(xii) Neither the Partnership nor the Company will 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,
neither the Partnership nor the Company will, nor will they permit any of
their "affiliates" (as defined in Rule 144 under the Securities Act) to,
resell any of the Shares, Warrants or Units which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them.
-18-
(xiv) Each of the Issuers 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 Units.
6. Expenses. Notwithstanding any termination of this Agreement
--------
(pursuant to Section 11 or otherwise), the Issuers, jointly and severally, agree
to pay the following costs and expenses and all other costs and expenses
incident to the performance by any Issuer 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 Notes Memorandum, the
Memorandum Supplement, 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 Notes Memorandum, the Memorandum Supplement, the Final Memorandum
and all amendments or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Shares, Warrants or
Units; (iv) the preparation, printing, authentication, issuance and delivery of
certificates for the Shares, Warrants or Units, including any stamp taxes in
connection with the original issuance and sale of the Shares, Warrants or Units
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 Units; (vi) the registration or qualification of the Shares,
Warrants and Units 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 Xxxxxx Xxxxxx & Xxxxxxx, 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 Xxxxxx Xxxxxx & Xxxxxxx, 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 Shares, Warrants or Units); (viii) the reasonable
transportation and other expenses incurred by or on behalf of representatives of
the Partnership or the Company in connection with presentations to prospective
purchasers of the Shares, Warrants or Units; (ix) the reasonable fees and
expenses of the accountants and the reasonable fees and expenses of counsel
(including local and special counsel) for the Issues, Warrants or Units; (x)
fees and expenses of any transfer agent for the Shares under the Statement of
Resolution including fees and expenses of its counsel; (xi) fees and expenses of
the Warrant Agent including fees and expenses of its counsel; (xii) all expenses
and listing fees incurred in connection with the application for quotation of
the Shares, Warrants or Units on the PORTAL Market; and (xiii) any fees charged
by investment rating
-19-
agencies for the rating of the Shares. In addition, each of the Issuers, 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 Units and to pay the
reasonable fees and expenses of their counsel, Xxxxxx Xxxxxx & Xxxxxxx.
7. Conditions of the Initial Purchasers' Obligations. The
-------------------------------------------------
obligation of each Initial Purchaser to purchase and pay for the Units is
subject to the accuracy of the representations and warranties contained herein,
to the performance by each of the issuers 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, Xxxxxx & XxXxxx LLP, special counsel to the Issuers,
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., special Texas counsel to the Issuers,
Xxxxxxx X. Xxxxxxxxx, special counsel to the Company, Fulbright & Xxxxxxxx
L.L.P., special Texas regulatory counsel to the Company, and Xxxxx, Katz,
Salazar, Alley & Xxxxx, special New Mexico regulatory counsel to the
Company, in each case in the form substantially similar to the opinions
delivered in connection with the offering and sale of the Notes and in form
and substance reasonably satisfactory to the Initial Purchasers and their
counsel, Xxxxxx Xxxxxx & Xxxxxxx. In rendering such opinions, Milbank,
Tweed, Xxxxxx & XxXxxx LLP, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., Xxxxxxx X.
Xxxxxxxxx, Xxxxxxxxx & Xxxxxxxx L.L.P. and Xxxxx, Katz, Salazar, Alley &
Xxxxx 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 Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers,
as they may reasonably request to pass upon such matters. In addition, in
rendering their opinion, Milbank, Tweed, Xxxxxx & XxXxxx 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 Xxxxxx Xxxxxx & Xxxxxxx, 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, Xxxxxx Xxxxxx & Xxxxxxx
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, Xxxxxx Xxxxxx & Xxxxxxx may state
that their opinion is limited to matters of New York and federal law.
-20-
(iii) The Initial Purchasers shall have received from each of Xxxxxx
Xxxxxxxx LLP and Deloitte & Touche LLP, independent public accountants,
"comfort" letters dated the later of the date hereof and the date of the
Memorandum Supplement, and, in the case of Deloitte & Touche LLP, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers and Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers.
(iv) The representations and warranties of the Issuers, contained in
this Agreement shall be true and correct on and as of the Closing Date;
each of the Issuers 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 or
partnership interests of the Partnership, the Company or its subsidiaries
or any material increase in the consolidated short-term or long-term debt
of the Partnership or the Company from that set forth or contemplated in
the Final Memorandum and the Partnership, 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
the Partnership, the Company and its subsidiaries, taken as a whole, other
than those reflected in the Final Memorandum.
(vi) None of the issuance and sale of the Shares, Warrants or Units
pursuant to this Agreement or any of the transactions contemplated by any
of the other Basic 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 the Partnership,
the Company or the Initial Purchasers relating to the issuance of the
Shares or the Initial Purchasers' activities in connection therewith or any
other transactions contemplated by this Agreement or the Final Memorandum
or the other Basic 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 the
Partnership, 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 Shares,
Warrants or Units, or (ii) any event or development relating to or
involving any of the Partnership, the Company or its subsidi-
-21-
aries or any of the officers or directors or partners of the Partnership,
the Company or its subsidiaries that makes any statement made in the Final
Memorandum untrue or that, in the opinion of the Partnership, the Company,
and their 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 general partner of the Partnership, to
the effect that:
a. All of the representations and warranties of the Partnership
set forth in this Agreement are true and correct as if made on
and as of the Closing Date and the Partnership 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 Warrants and the Units pursuant to
this Agreement or the Final Memorandum and the consummation of
the transactions contemplated by the Basic 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
Partnership, relating to the issuance of the Warrants or the
Units 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 Basic Documents.
c. There has not been any change in the partnership interests of
the Partnership nor any material increase in the consolidated
short-term or long-term debt of the Partnership from that set
forth or contemplated in the Final Memorandum and the
Partnership has no liabilities or obligations, contingent or
otherwise (whether or not in the ordinary course of business),
that are material to the Partnership other than those reflected
in the Final Memorandum.
(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
-22-
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 Shares and Units pursuant to this
Agreement or the Final Memorandum and the consummation of the
transactions contemplated by the Basic 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 Shares or Units 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 Basic 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 Shares or Units, 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 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.
-23-
(x) On or prior to the Closing Date, the Limited Partnership
Agreement shall have been executed and delivered by the Partnership and
shall be satisfactory in form and effect to the Initial Purchasers and
counsel for the Initial Purchasers and shall be in full force and effect.
(xi) All proceedings taken in connection with the issuance of the
Shares, Warrants and Units and the transactions contemplated by this
Agreement 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 the Partnership, the Company or any of
its subsidiaries, or (B) it is reviewing its rating assigned to any debt
securities of the Partnership, the Company or any of its subsidiaries with
a view to possible downgrading, or with negative implications, or direction
not determined.
(xiii) The Warrant Agreement shall have been duly executed and
delivered by the Partnership and the Warrant Agent and the Warrants shall
have been duly executed and delivered by the Partnership and duly
authenticated by the Warrant Agent.
(xiv) On or before the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by the Company and
such agreement shall be in full force and effect at all times from and
after the Closing Date.
(xv) The Issuers 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) On or prior to the Closing Date, the Statement of Resolution
shall have been duly authorized and filed with the Secretary of State of
the State of Texas by the Company, the Initial Shares under the Statement
of Resolution shall have been duly issued and delivered by the Company and
the Dividend Shares shall have been duly authorized and reserved for
issuance by the Company.
(xvii) The Unit Agreement shall have been duly executed and delivered
by each of the Issuers and the Unit Agent and the Units shall have been
duly executed and delivered by each of the Issuers and duly authenticated
by the Unit Agent.
-24-
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. The Issuers 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) Each of the Issuers,
--------------------------------
jointly and severally, agree to indemnify and hold harmless the Initial
Purchasers, each director, officer, employee or agent of any Initial Purchaser
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, 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 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 the Partnership or the
Company or based upon written information furnished by or on behalf of the
Partnership or the Company filed in any jurisdiction in order to qualify
the Shares, Warrants or Units 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 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 will reimburse, 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
-------- -------
the Issuers 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 Memorandum or any
amendment or supplement thereto, or any Document, in reliance upon and in
conformity with written information furnished to the Issuers by or on behalf of
such Initial Purchasers specifically for use therein; and provided, further,
-------- -------
that the Issuers will not be liable to any Initial Pur-
-25-
chaser or any director, officer, employee, agent or any person controlling any
Initial Purchaser with respect to any such untrue statement or omission made in
the Notes 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 Units from an Initial Purchaser in reliance upon
the Notes Memorandum but was not sent or given a copy of the Final Memorandum
(as amended or supplemented) that was made available by the Issuers to such
Initial Purchaser at or prior to the written confirmation of the sale of the
Units 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 any Issuer with Section 5(iv) of this Agreement. This
indemnity agreement will be in addition to any liability that any Issuer may
otherwise have to the indemnified parties. Each of the Issuers 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. The Issuers 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 each of the Issuers, its directors, officers, employees,
partners and agents and each person, if any, who controls an Issuer 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 such Issuer or any
such director, officer, employee, partner 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 Notes 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
the Issuers 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 such Issuer or any such director, officer, employee, partner, agent
or controlling person in connection with investigat-
-26-
ing or defending against or appearing as a 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 indemnify-
-27-
ing party, such indemnifying party agrees to indemnify and hold harmless the
indemnified 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 Units 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 the Issuers
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 Units (before
deducting expenses) received by the Issuers 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 any Issuer
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. The Issuers 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 the
Issuer 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 considerations referred to in the first
sentence of this paragraph (d). Notwithstanding any other provision of this
paragraph (d), the Initial Pur-
-28-
chasers 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, partner and agent of any Issuer
and each person, if any, who controls any Issuer 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 any Issuer.
(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 Units; 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 Units 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 Units only from, and will offer the Units 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 Unit such
-------
persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Memorandum.
(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 Units or has in its
possession or distributes any Memorandum or any such other material, in all
cases at its own expense; (ii) the Units have not been and will not be offered
or sold
-29-
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 Units and will offer and sell the Units (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 Units, 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 Units, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Units 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 Units will not offer or sell, any Units 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 Xxx 0000 with respect to anything done by it in relation to the Units
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 Units 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.
(d) The Initial Purchasers understand that the Issuers, 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.
-30-
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 the Issuers, 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 the Issuers, any of their respective officers, partners 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 Units,
and shall be binding upon and shall inure to the benefit of any successors,
assigns, heirs or personal representatives of the Issuers, 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 the Partnership or the
Company, given in the event that the Partnership or 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 the Partnership, 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, properties or results of operations of the
Partnership, 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 the Partnership, the Company or any of its
subsidiaries), in the general affairs, management, business, financial
condition, properties or results of operations of the Partnership, 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 the Partnership, 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;
-31-
(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 Shares, Warrants or Units as
contemplated by the Final Memorandum, as amended as of the date hereof; or
(v) any securities of the Partnership, 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., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department, telecopy number: (212)
885-4998; with a copy to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx Xxxxxxx, Esq., telecopy number: (000) 000-0000 and
(ii) if sent to the Partnership 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 SW Acquisition, L.P., c/o Laurel Hill Capital Partners
LLC, 0 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx
Xxxxxx, telecopy number: (000) 000-0000; with a copy to Milbank, Tweed, Xxxxxx
and XxXxxx LLP, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: M.
Xxxxxxx Xxxx, telecopy number: (000) 000-0000.
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 the Issuers and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be con-
-32-
strued 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 the Partnership and 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 the Partnership
or the Company and any person or persons who control the Partnership or the
Company, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act. No purchaser of Shares, Warrants or Units 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 the Partnership, 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 the Partnership, the Company,
or the Initial Purchasers at law or in equity or otherwise. No waiver of or
consent to any departure by the Partnership, 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 the Partnership, 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 the Partnership, the Company, or the Initial Purchasers from 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 the
Partnership or the Company, in any case shall entitle the Partnership or 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 fourth and fifth
sentences of the seventh paragraph and the entire tenth paragraph, in each case
under the heading "Plan of Distribution" in the Memorandum Supplement (to the
extent such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to the Issuers for purposes of
Sections 2(a) and 8 hereof.
-33-
16. Entire Agreement. This Agreement, together with the other Basic
----------------
Documents, 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. 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 the Issuers
and the Initial Purchasers.
Very truly yours,
TNP ENTERPRISES, INC.
By: ______________________________________
Name:
Title:
SW ACQUISITION, L.P.
By: SW I ACQUISITION GP, L.P.,
a Texas limited partnership
and its general partner
By: XX XX ACQUISITION LLC,
a Texas limited liability company
and its general partner
By: ______________________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Manager
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:
Schedule 1
----------
Number of Units
Initial Purchaser Purchased
----------------- ---------
CIBC World Markets Corp................................... 50,000
Chase Securities Inc...................................... 50,000
-------
Total..................................................... 100,000
=======
Exhibit A
---------
Subsidiaries
------------
Jurisdiction of Incorporation/
Name Organization
---- ------------
Texas-New Mexico Power Company Texas
Facility Works, Inc. Texas
TNP Energy Services, Inc. Texas
TNP Technologies, LLC Texas
TNP Magnus, LLC Texas
TNP Operating Company Texas
Texas Generating Company (a subsidiary of Texas- Texas
New Mexico Power Company)
Texas Generating Company II (a subsidiary of Texas- Texas
New Mexico Power Company)
