Public Service Company of New Mexico UNDERWRITING AGREEMENT
EXHIBIT
1.2
EXECUTION COPY
$350,000,000
Public
Service Company of New Mexico
7.95%
Notes Due 2018
May
8, 2008
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As
Representatives of the several
Underwriters
named in Schedule 1 attached hereto,
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Public
Service Company of New Mexico, a New Mexico corporation (the “Company”), proposes to issue
and sell $350.0 million aggregate principal amount of its 7.95% notes due 2018
(the “Notes”) to the several underwriters named in Schedule 1 hereto
(the “Underwriters”),
for which Xxxxxx Brothers Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated are acting as representatives (the “Representatives”). The
Notes will (i) have terms and provisions which are summarized in the Pricing
Disclosure Package as of the Applicable Time and the Prospectus dated as of the
date hereof (each as defined in Section 1(a) hereof) and (ii) be issued pursuant
to an Indenture dated as of August 1, 1998 between the Company and The Bank of
New York (as successor to JPMorgan Chase Bank, N.A.), as Trustee (the “Trustee”) (the “Indenture”), as supplemented
by the third supplemental indenture to be dated as of May 13, 2008 between the
Company and the Trustee (the “Supplemental
Indenture.”) This agreement (this “Agreement”) is to confirm the
agreement concerning the purchase of the Notes from the Company by the
Underwriters.
1. Representations, Warranties and
Agreements of the Company. The Company represents,
warrants and agrees that:
(a) Filing of Registration
Statement and Preliminary Prospectus; No Stop Order: (i)
A registration statement on Form S-3 (File No. 333-106079) (the “First Registration Statement”)
and a registration statement on Form S-3 (File No. 333-150024) (the “Second Registration Statement”
and together with the First Registration Statement, the “Initial Registration Statements”) relating to
certain securities to be issued from time to time by the Company have been
prepared by the Company in
conformity
with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the
rules and regulations (the “Rules and Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder;
(ii) the Initial Registration Statements have been filed with the
Commission under the Securities Act; (iii) the Initial Registration
Statements and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statements and any post-effective amendments thereto,
but including all documents incorporated by reference in the prospectus
contained therein, to the Representatives for each of the other Underwriters,
have been declared effective by the Commission in such forms; and (iv) other
than a registration statement, if any, increasing the size of the offering (a
“Rule 462(b) Registration Statement”), filed pursuant to
Rule 462(b) under the Securities Act, which became effective upon filing, no
other document with respect to the Initial Registration Statements, any
post-effective amendment thereto or any document incorporated by reference
therein has heretofore been filed or transmitted for filing with the Commission
(other than for prospectuses filed pursuant to Rule 424(b) under the Securities
Act) each in the form heretofore delivered to the
Representatives. Copies of such Initial Registration Statements and
any amendment thereto have been delivered by the Company to the
Representatives. Pursuant to Rule 429 under the Securities Act, the
Second Registration Statement contains a combined Base Prospectus to be used in
connection with both the Initial Registration Statements. Pursuant to Rule 429
under the Securities Act, the Second Registration Statement, upon its
effectiveness under the Securities Act, acted as a post-effective amendment to
the First Registration Statement. As used in this
Agreement:
(i) “Applicable Time” means 8:00
p.m. (New York City time) on May 8, 2008;
(ii) “Base Prospectus” means the
base prospectus filed as part of the Registration Statement, in the form in
which it has most recently been amended on or prior to the date hereof, relating
to the Notes;
(iv) “Effective Date” means any date
as of which any part of such registration statement or post effective amendment
thereto relating to the Notes became, or is deemed to have become, effective
under the Securities Act in accordance with the Rules and Regulations (including
pursuant to Rule 430B of the Rules and Regulations;
(v) “Final Term Sheet” means the
term sheet prepared pursuant to Section 5(a)(i) of this Agreement and
substantially in the form attached in Schedule 3 hereto;
(vi) “Issuer Free Writing
Prospectus” means each “free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the offering of the Notes,
including the Final Term Sheet;
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(vii) “Preliminary Prospectus” means
any preliminary prospectus relating to the Notes included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, including any preliminary prospectus supplement thereto relating to
the Notes;
(viii) “Pricing Disclosure Package”
means, as of the Applicable Time, the most recent Preliminary Prospectus,
together with the information included on Schedule 2 and each Issuer Free
Writing Prospectus filed or used by the Company on or before the Applicable
Time, other than a road show that is an Issuer Free Writing Prospectus under
Rule 433 of the Rules and Regulations;
(ix) “Prospectus” means the final
prospectus relating to the Notes, including any prospectus supplement thereto
relating to the Notes, as filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations; and
(x) “Registration Statements”
means, collectively, the Initial Registration Statements, any post-effective
amendments thereto and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statements at the time the
Initial Registration Statements became effective, but excluding the Statement of
Eligibility and Qualification on Form T-1, each as amended at the time the
Initial Registration Statements or any post-effective amendment thereto became
effective or the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective.
Any
reference to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents incorporated by reference therein pursuant to
Form S-3 under the Securities Act as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be. Any reference to the “most
recent Preliminary Prospectus” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration Statement or filed pursuant
to Rule 424(b) prior to or on the date hereof (including, for purposes hereof,
any documents incorporated by reference therein prior to or on the date
hereof). Any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any document filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and incorporated
by reference in such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company on Form 10-K filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after the
Effective Date that is incorporated by reference in the Registration
Statement.
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The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding or examination for such purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission. The Commission has not notified the Company of any
objection to the use of the form of the Registration Statement.
(b) Conformity to Description of
Registration Statement, Preliminary Prospectus,
Prospectus: The Registration Statement conformed and will
conform in all material respects on the Effective Date and on the Delivery Date,
and any amendment to the Registration Statement filed after the date hereof will
conform in all material respects, when filed, to the requirements of the
Securities Act and the Rules and Regulations. The Preliminary
Prospectus conformed, and the Prospectus will conform, in all material respects
when filed with the Commission pursuant to Rule 424(b) and on the Delivery Date
to the requirements of the Securities Act and the Rules and
Regulations. The documents incorporated by reference in any
Preliminary Prospectus or the Prospectus conformed, and any further documents so
incorporated will conform, when filed with the Commission, in all material
respects to the requirements of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(c) Registration
Statement: The Registration Statement did not, as of the
Effective Date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein, which information is
specified in Section 8(e) or in a separate letter addressing such
information.
(d) Prospectus: The
Prospectus will not, as of its date and on the Delivery Date, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified
in Section 8(e) or in a separate letter addressing such
information.
(e) Incorporated
Documents: The documents incorporated by reference in the
Registration Statement, any Preliminary Prospectus or the Prospectus did not,
and any further documents filed and incorporated by reference therein will not,
when filed with the Commission, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the foregoing
representation and warranty is given on the basis that any statement contained
in a document incorporated by reference therein shall be deemed not to be
contained therein if the statement has been modified or superseded by any
statement in a subsequently filed document incorporated by reference therein or
in any amendment or supplement thereto.
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(f) Pricing Disclosure
Package: The Pricing Disclosure Package did not, as of the Applicable
Time, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that no
representation or warranty is made as to information contained in or omitted
from the Pricing Disclosure Package in reliance upon and in conformity with
written information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e) or in a separate letter addressing such
information.
(g) Issuer Free Writing
Prospectus: Each Issuer Free Writing Prospectus (including,
without limitation, any road show that is a free writing prospectus under Rule
433) when considered together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) Conformity to Description,
Use, and Retaining of Issuer Free Writing Prospectuses: Each
Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations
on the date of first use, and the Company has complied with any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to the
Rules and Regulations. The Company has not made any offer relating to the Notes
that would constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representatives. The Company will, pursuant to reasonable
procedures developed in good faith, retain in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses that were not required to be
filed pursuant to the Rules and Regulations.
(i) Due Incorporation and
Qualification: The Company has been duly incorporated or
organized, is validly existing as a corporation or other business entity in good
standing under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own its properties and
conduct its business as described in any Preliminary Prospectus and the
Prospectus. The Company is duly qualified to do business as a foreign
corporation or other business entity and is in good standing under the laws of
each jurisdiction which requires such qualification, except where the failure to
be so qualified or in good standing could not, in the aggregate, reasonably be
expected to have a material adverse effect on (i) the condition (financial or
otherwise), results of operations, stockholders’ equity, properties or business
of the Company and its subsidiaries taken as a whole or (ii) the ability of the
Company to perform its obligations under this Agreement, the Indenture, the
Supplemental Indenture or the Notes (a “Material Adverse
Effect”). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Schedule 1(j) attached hereto. None of the
subsidiaries of the Company is a “significant subsidiary” (within the meaning of
Rule 1-02(w) of Regulation S-X under the Securities Act).
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(j) Capitalization: The
Company has an authorized capitalization as set forth in each of the most recent
Preliminary Prospectus and the Prospectus.
(k) The Indenture and the
Supplemental Indenture: (i) The Indenture has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms; and (ii) the Supplemental Indenture has been duly authorized and, when
executed and delivered by the Company, will constitute a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except in each case as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law). The Indenture (i) has been duly qualified under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”), (ii) complies,
and as supplemented by the Supplemental Indenture will comply, as to form with
the requirements of the Trust Indenture Act and (iii) conforms, and the
Supplemental Indenture when executed and delivered will conform, to the
description thereof in the most recent Preliminary Prospectus and the
Prospectus.
(l) The Notes: The Notes
have been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the Indenture and delivered to
the Underwriters against payment therefor in accordance with the terms of this
Agreement, will be validly issued and delivered, and will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture and
the Supplemental Indenture and enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), and the Notes conform, or will conform, to the description
thereof in the Pricing Disclosure Package and the Prospectus.
(m) Underwriting
Agreement: The Company has all the requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(n) No
Conflicts: The execution, delivery and performance of this
Agreement by the Company, the issue and sale of the Notes, the consummation of
the transactions contemplated hereby, the Indenture and the Supplemental
Indenture and the application of the proceeds from the sale of the Notes as
described under “Use of Proceeds” in the most recent Preliminary Prospectus will
not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, impose any lien, charge or encumbrance upon any property
or assets of the Company and its subsidiaries, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject;
(ii) result in any violation of the provisions of the charter, by-laws or
other organizational documents of the Company or any of its subsidiaries; or
(iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties.
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(o) No Consents
Required: No consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties is required to be obtained by the Company for the execution, delivery
and performance of this Agreement, the Indenture, the Supplemental
Indenture or the Notes by the Company, the consummation of the transactions
contemplated hereby, the application of the proceeds from the sale of the Notes
as described under “Use of Proceeds” in the most recent Preliminary Prospectus,
except for the registration of the Notes under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under applicable state securities or blue sky laws in connection with
the purchase and sale of the Notes by the Underwriters.
(p) No Material Adverse
Changes: Except as described in the most recent Preliminary
Prospectus, neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or incorporated by
reference in the most recent Preliminary Prospectus, any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, and since such date, there has not been any change in the
capital stock, long-term debt, consolidated net current assets or stockholders’
equity of the Company and/or any of its subsidiaries or any adverse change, or
any development involving a prospective adverse change, in or affecting the
condition (financial or otherwise), results of operations, stockholders’ equity,
properties, management, business or prospects of the Company and its
subsidiaries taken as a whole, in each case except as could not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(q) Historical Financial
Statements: The consolidated historical financial statements
and schedules of the Company and its consolidated subsidiaries included or
incorporated by reference in the most recent Preliminary Prospectus comply as to
form in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly in all material respects the consolidated
financial condition of the Company and its consolidated subsidiaries as of the
dates indicated therein and the consolidated results of their operations and
cash flows for the periods specified therein. Except as stated
therein, such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved.
(r) Independent Public
Accountants: Deloitte & Touche LLP, who have certified
certain financial statements of the Company and its consolidated subsidiaries,
and which have audited the Company’s internal control over financial reporting
and management’s assessment thereof, are an independent registered public
accounting firm as required by the Securities Act and the Rules and Regulations
and the rules and regulations of the Public Company Accounting Oversight
Board.
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(s) Compliance: The
Company owns or leases all such properties as are necessary to the conduct of
its operations as presently conducted. The Company is not in
non-compliance with any term or condition of, nor has failed to obtain and
maintain in effect, any license, certificate, permit or other governmental
authorization required for the ownership or lease of its property or the conduct
of its business, which violation, non-compliance or failure, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
except as set forth the most recent Preliminary Prospectus. The
Company has not received notice of any proceedings relating to the revocation or
material modification of any such license, certificate, permit or other
authorization.
(t) Investment Company
Act: The Company is not, and as of the Delivery Date and,
after giving effect to the offer and sale of the Notes and the application of
the proceeds therefrom as described under “Use of Proceeds” in the most recent
Preliminary Prospectus and the Prospectus, will not be, an “investment company”
within the meaning of such term under the Investment Company Act of 1940, as
amended (the “Investment
Company Act”).
(u) Litigation: Other
than as set forth in the most recent Preliminary Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect or could, in the
aggregate, reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture, the Supplemental Indenture or the
Notes or the consummation of the transactions contemplated hereby. To
the Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(v) No Labor
Disturbance: No labor disturbance by or dispute with the
employees of the Company exists or is, to the best knowledge of the Company,
threatened or is imminent that could reasonably be expected to have a Material
Adverse Effect, except as set forth in the most recent Preliminary
Prospectus.
(w) No
Defaults: The Company is not in violation of its charter,
bylaws or other organizational documents, nor, except as would not reasonably be
likely to have a Material Adverse Effect, (i) is in default in the performance
or observance of any term, material obligation, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties is subject, (ii) is in violation of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over it or its property nor (iii) has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business.
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(x) Xxxxxxxx-Xxxxx: To
the best of its knowledge, the Company is in compliance in all material respects
with the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”) that are effective and the rules and regulations of the
SEC that have been adopted and are effective thereunder.
(y) Environmental
Matters: Except as described in the most recent Preliminary
Prospectus, each of the Company and each of its subsidiaries (i) is in
compliance with any and all applicable federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental
Laws”), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business and
(iii) is in compliance with all terms and conditions of any such permit, license
or approval, except where such non-compliance with Environmental Laws or failure
to receive, or comply with the terms and conditions of required permits,
licenses or approvals, would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(z) Accounting Controls and
Disclosure Controls: The Company and its subsidiaries maintain
(x) systems of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences and (y) disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act).
(aa) Distribution and of Offering
Materials: The Company has not distributed and, prior to the
later to occur of the Delivery Date and completion of the distribution of the
Notes, will not distribute any offering material in connection with the offering
and sale of the Notes other than any Preliminary Prospectus, the Prospectus, and
any Issuer Free Writing Prospectus to which the Representatives have consented
(which consent being deemed to have been given with respect to (i) the Final
Term Sheet prepared and filed pursuant to Section 5(a)(i) hereof and (ii) any
other Issuer Free Writing Prospectus identified on Schedule 3
hereto).
(bb) Anti-Manipulation: The
Company has not taken, directly or indirectly, any action intended or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company in a manner which would
violate the Securities Act or the Exchange Act.
Any
certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Notes shall be deemed a representation and warranty by the Company, as to
matters covered thereby but only as of the date thereof, to each
Underwriter.
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2. Purchase of the Notes by the
Underwriters. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, the Company agrees to sell to the several Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase from the
Company, at a price equal to 99.00% of the principal amount thereof, plus
accrued interest, if any, from May 13, 2008, the principal amount of
the Notes set forth opposite that Underwriter’s name in Schedule 1
hereto.
3. Offering of Notes by the
Underwriters. Upon authorization by the Representatives
of the release of the Notes, the several Underwriters propose to offer the Notes
for sale upon the terms and conditions to be set forth in the
Prospectus.
4. Delivery of and Payment for the
Notes. Delivery of and payment for the Notes shall be made at
10:00 A.M., New York City time, on the third full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and
time are sometimes referred to as the “Delivery
Date.” Delivery of the Notes will be made to the
Representatives for the account of each Underwriter against payment by the
several Underwriters through the Representatives and of the aggregate purchase
price of the Notes being sold by the Company to or upon the order of the Company
of the purchase price therefor by wire transfer of immediately available
funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Company shall deliver
the Notes through the facilities of DTC unless the Representatives shall
otherwise instruct. Upon delivery, the Notes shall be registered in
the name of Cede & Co., as nominee for DTC.
5. Further Agreements of the Company
and the Underwriters. (a) The Company agrees:
(i) Filing of Prospectus;
Amendments and Supplements; Filing of Exchange Act Reports; Notice of Stop
Orders: To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement; to make no
further amendment or any supplement to the Registration Statement or the
Prospectus prior to the Delivery Date except as provided herein; to advise the
Representatives, promptly after it receives notice thereof, of the time when any
amendment or supplement to the Registration Statement or the Prospectus has been
filed and to furnish the Representatives with copies thereof and for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Notes; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Notes; to prepare the
Final Term Sheet, substantially in the form of Schedule 3 hereto and approved by
the Representatives and file the Final Term Sheet pursuant to Rule 433(d) of the
Rules and Regulations within the time period prescribed by such Rule; to advise
the Representatives, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or suspending the
use of the Prospectus or any Issuer Free Writing Prospectus, of the
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suspension
of the qualification of the Notes for offering or sale in any jurisdiction, of
the initiation or threatening by the Commission of any proceeding or examination
for any such purpose, of any notice from the Commission objecting to the use of
the form of the Registration Statement or any post effective amendment thereto,
or of any request by the Commission for the amending or supplementing of the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus or
for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(ii) Payment of Commission
Fees: If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Securities Act; and
(iii) Copies of Preliminary
Prospectus, Prospectus, Issuer Free Writing Prospectus and Incorporated
Documents; Certain Events and Amendments or Supplements: To
deliver promptly to the Representatives on or prior to the Delivery Date such
number of the following documents as the Representatives shall reasonably
request: (A) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (B) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus, (C) the Final Term Sheet and each other Issuer Free Writing
Prospectus and (D) any document incorporated by reference in any Preliminary
Prospectus or the Prospectus; and, if the delivery of a prospectus is required
at any time after the date hereof in connection with the offering or sale of the
Notes and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, to notify the
Representatives and, upon their request, to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus that will correct such statement or
omission or effect such compliance;
(iv) Filing of Amendments or
Supplements: To file promptly with the Commission any
amendment or supplement to the Registration Statement or the Prospectus that
may, in the judgment of the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
11
(v) Furnishing of Amendments or
Supplements: Prior to filing with the Commission any amendment or
supplement to the Registration Statement or the Prospectus, any document
incorporated by reference in the Prospectus or any amendment to any document
incorporated by reference in the Prospectus, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and not file any of the same
with the Commission to which the Representatives shall reasonably object, for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the Notes;
(vi) Offers by Issuer Free
Writing Prospectuses: Not to make any offer relating to the
Notes that would constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representatives (which consent being deemed to have been
given with respect to (A) the Final Term Sheet prepared and filed pursuant to
Section 5(a)(i) hereof and (B) any other Issuer Free Writing Prospectus
identified on Schedule 3 hereto);
(vii) Rule 433; Certain Events and
Amendments or Supplements to Issuer Free Writing
Prospectus: To comply with all applicable requirements of Rule
433 with respect to any Issuer Free Writing Prospectus; and if at any time after
the date hereof any events shall have occurred as a result of which any Issuer
Free Writing Prospectus, as then amended or supplemented, would conflict with
the information in the Registration Statement, the most recent Preliminary
Prospectus or the Prospectus or would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary to amend
or supplement any Issuer Free Writing Prospectus, to notify the Representatives
and, upon their request, to file such document and to prepare and furnish
without charge to each Underwriter as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented Issuer Free
Writing Prospectus that will correct such conflict, statement or omission or
effect such compliance;
(viii) Earning
Statement: As soon as practicable after the Effective Date and
in any event not later than 16 months after the date hereof, to make generally
available to the Company’s security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including in accordance with Rule 158 under the
Securities Act);
(ix) Blue Sky
Qualifications: Promptly from time to time to take such action
as the Representatives may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Notes; provided that in connection
therewith the Company shall not be required to (i) qualify as a foreign
corporation in any jurisdiction in which it would not otherwise be required to
so qualify, (ii) file a general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any jurisdiction in which it
would not otherwise be subject;
12
(x) Clear
Market: Until 10 days following
the Delivery Date, the Company will not, without the prior written consent of
the Representatives, directly or indirectly, issue, sell, offer to sell, grant
any option for the sale of or otherwise dispose of, any debt securities that are
substantially similar to the Notes (including, without limitation, with respect
to the maturity, currency, interest rate and other material terms of the Notes),
provided that this
Section 5(a)(x) does not apply to the issuance of up to $392,345,000 of
Pollution Control Revenue Refunding Bonds and Related Senior Unsecured
Notes;
(xi) Application of Net
Proceeds: To apply the net proceeds from the sale of the Notes
being sold by the Company as set forth in the Prospectus; and
(x) Anti-manipulation: Not
to at any time, directly or indirectly, take any action intended, or which might
reasonably be expected, to cause or result in the stabilization or manipulation
of the price of any security of the Company in a manner that would violate the
Securities Act or the Exchange Act.
(b) Each
Underwriter severally agrees that, unless it obtains the prior consent of the
Company, it has not made and will not make any offer relating to the Notes that
would constitute an “issuer free writing prospectus,” as defined in Rule 433, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the Commission; provided, however, that the
Underwriters may use a term sheet substantially in the form of Schedule 3 hereto
without the consent of the Company. Any such free writing prospectus
consented to by the Company is hereinafter referred to as “Permitted Issuer
Information.”
6. Expenses. The
Company agrees, whether or not the transactions contemplated by this Agreement,
the Indenture and the Supplemental Indenture are consummated or this Agreement
is terminated, to pay all costs, expenses, fees and taxes incident to and in
connection with (a) the authorization, issuance, sale and delivery of the Notes
and any stamp duties or other taxes payable in that connection; (b) the
preparation, printing and filing under the Securities Act of the Registration
Statement (including any exhibits thereto), any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto; (c) the distribution of the Registration Statement (including any
exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free
Writing Prospectus and any amendment or supplement thereto, or any document
incorporated by reference therein, all as provided in this Agreement; (d) the
production and distribution of this Agreement, the Indenture, the Supplemental
Indenture and the Notes and any other related documents in connection with the
offering, purchase, sale and delivery of the Notes; (e) the qualification of the
Notes under the securities laws of the several jurisdictions as provided in
Section 5(a)(x) and the preparation, printing and distribution of a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters
in an amount that is not greater than $5,000); (f) the services of
the Trustee and any agent of the Trustee (including the fees and disbursements
of counsel for the Trustee); (g) the investor presentations on any “road show”
undertaken in connection with the marketing of the Notes, including, without
limitation, expenses associated with any electronic roadshow, travel and lodging
expenses of the representatives and officers of the Company and the cost of any
aircraft chartered in connection with the road show; (h) the services of the
Company’s independent registered public accounting firm; (i) the services of the
Company’s counsel; (j) any rating of the Notes by rating agencies; (k) any
required review by the Financial Industry Regulatory Authority of the terms of
the sale of the Notes (including related fees and expenses of counsel to the
Underwriters); and (l) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Notes which they may sell and the expenses of advertising
any offering of the Notes made by the Underwriters.
13
7. Conditions of Underwriters’
Obligations. The respective obligations of the
Underwriters hereunder are subject to the accuracy, when made and on the
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) Filing of Prospectus and
Free Writing Prospectus; No Stop Order: The Prospectus shall
have been timely filed with the Commission in accordance with Section 5(a)(i);
the Company shall have complied with all filing requirements applicable to any
Issuer Free Writing Prospectus used or referred to after the date hereof; no
stop order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of the Prospectus or any Issuer Free Writing
Prospectus shall have been issued and no proceeding or examination for such
purpose shall have been initiated or, to the knowledge of the
Company, threatened by the Commission; any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus shall have been complied with; and the Commission shall not have
notified the Company of any objection to the use of the form of the Registration
Statement.
(b) No Discovery of Untrue
Statements or Omissions: No Underwriter shall have discovered
and disclosed to the Company on or prior to the Delivery Date that the
Registration Statement, the Prospectus or the Pricing Disclosure Package, or any
amendment or supplement thereto, contains an untrue statement of a fact which,
in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) Other Documents and
Certificates: All corporate proceedings and other legal
matters incident to the authorization, form and validity of this Agreement, the
Indenture, the Supplemental Indenture, the Notes, the Registration Statement,
the Prospectus and any Issuer Free Writing Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) Opinions of Company
Counsel: Xxxxxxx X. Xxxxx, Associate General Counsel, SEC
Reporting and Corporate Transactions, of the Company, shall have furnished to
the Representatives his written opinion, as counsel to the Company, addressed to
the Underwriters and dated the Delivery Date, substantially in the form attached
hereto as Exhibit
B-1. Xxxxxxxx Xxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed to the
Underwriters and dated the Delivery Date, substantially in the form attached
hereto as Exhibit
B-2. Xxxxx & Xxxxxx L.L.P. shall have furnished to the
Representatives its written opinion, as special counsel to the Company,
addressed to the Underwriters and dated the Delivery Date, substantially in the
same form attached hereto as Exhibit
B-3.
14
(e) Opinions of Underwriters’
Counsel: The Representatives shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated the Delivery Date, with respect to the issuance and sale of the
Notes, the Indenture, the Supplemental Indenture, the Registration Statement,
the Prospectus and the Pricing Disclosure Package and other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) Letters of
Accountants: At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter, in
form and substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the most recent Preliminary Prospectus, as of a date not
more than three days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings.
(g) With
respect to the letter of Deloitte & Touche LLP referred to in the preceding
paragraph and delivered to the Representatives concurrently with the execution
of this Agreement (the “initial
letter”), the Company shall have furnished to the Representatives a
letter (the “bring-down
letter”) of such accountants, addressed to the Underwriters and dated the
Delivery Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than three days
prior to the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters covered by
the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) Officers’
Certificates: The Company shall have furnished to the
Representatives a certificate, dated the Delivery Date, of its Chief Executive
Officer and President, President of Utilities, Executive Vice President, Chief
Financial Officer or any Senior Vice President, and any Vice President or
Treasurer, stating that:
15
(i) The
representations, warranties and agreements of the Company in Section 1 are true and correct on and as of the Delivery Date, and
the Company has complied with all its agreements contained herein and satisfied
all the conditions on its part to be performed or satisfied hereunder at or
prior to the Delivery Date;
(ii) No stop
order suspending the effectiveness of the Registration Statement has been
issued; no proceedings or examination for that purpose have been
instituted or, to the knowledge of such officers, threatened; and the Commission
has not notified the Company of any objection to the use of the form of the
Registration Statement or any post-effective amendment thereto; and
(iii) They have
carefully examined the Registration Statement, the Prospectus and the Pricing
Disclosure Package, and, in their opinion, (A) (1) the Registration Statement,
as of the Effective Date, (2) the Prospectus, as of its date and on the Delivery
Date, or (3) the Pricing Disclosure Package, as of the Applicable Time, did not
and do not contain any untrue statement of a material fact and did not and do
not omit to state a material fact required to be stated therein or necessary to
make the statements therein (except in the case of the Registration Statement,
in the light of the circumstances under which they were made) not misleading and
(B) since the Effective Date, no event has occurred that should have been set
forth in a supplement or amendment to the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus that has not been so set
forth.
(i) No Material
Changes: Except as described in the most recent Preliminary
Prospectus, (i) neither the Company nor any of its subsidiaries shall have
sustained, since the date of the latest audited financial statements included or
incorporated by reference in the most recent Preliminary Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree or (ii) since the date of the most recent
Preliminary Prospectus, there shall not have been any change in the capital
stock, long-term debt, consolidated net current assets or stockholders’ equity
of the Company and/or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), results of operations, stockholders’ equity, properties, management
or business of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of
the Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes
being delivered on the Delivery Date on the terms and in the manner contemplated
in the Prospectus.
(j) No Downgrading:
Subsequent to the execution and delivery of this Agreement (i) no downgrading
shall have occurred in the rating accorded the Company’s debt securities or
preferred stock by any “nationally recognized statistical rating organization”
(as that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations), and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company’s debt securities or preferred
stock.
16
(k) Non-Occurrence of Certain
Events: Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall have
been suspended or materially limited or the settlement of such trading generally
shall have been materially disrupted or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions,
including, without limitation, as a result of terrorist activities after the
date hereof (or the effect of international conditions on the financial markets
in the United States shall be such), as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Notes being delivered on the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance as provided in exhibits to this
Agreement, and if not so provided, then in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. Indemnification
and Contribution.
(a) The
Company shall indemnify and hold harmless each Underwriter, its directors,
officers and employees and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which that Underwriter,
director, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any Preliminary Prospectus,
the Registration Statement, the Prospectus or in any amendment or supplement
thereto, (B) any Issuer Free Writing Prospectus or in any amendment or
supplement thereto, (C) any Permitted Issuer Information used or referred to in
any “free writing prospectus” (as defined in Rule 405) used or referred to by
any Underwriter or (D) any “road show” (as defined in Rule 433) not constituting
an Issuer Free Writing Prospectus (a “Non-Prospectus Road Show”),
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
or in any amendment or supplement thereto or in any Permitted Issuer
Information, any Non Prospectus Road Show, any material fact required to be
stated
17
therein
or necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Notes or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such director, officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, director, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any such amendment or supplement thereto or
in any Permitted Issuer Information, any Non Prospectus Road Show in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information consists
solely of the information specified in Section 8(e) or in a separate letter
addressing such information. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any director, officer, employee or controlling person of that
Underwriter.
(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, its directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show, or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in
any amendment or supplement thereto or in any Non-Prospectus Road Show, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, which information is
limited to the information set forth in Section 8(e) or in a separate letter
addressing such information. The foregoing indemnity agreement is in
addition to any liability that any Underwriter may otherwise have to the Company
or any such director, officer, employee or controlling person.
18
(c) Promptly
after receipt by an indemnified party under this Section 8 of notice of any
claim or the commencement of any action, the indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section
8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the
indemnified party shall have the right to employ counsel to represent jointly
the indemnified party and those other indemnified parties and their respective
directors, officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
under this Section 8 if (i) the indemnified party and the indemnifying party
shall have so mutually agreed; (ii) the indemnifying party has failed within a
reasonable time to retain counsel reasonably satisfactory to the indemnified
party; (iii) the indemnified party and its respective directors, officers,
employees and controlling persons shall have reasonably concluded that there may
be legal defenses available to them that are different from or in addition to
those available to the indemnifying party; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the indemnified
parties or their respective directors, officers, employees or controlling
persons, on the one hand, and the indemnifying party, on the other hand, and
representation of both sets of parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, and
in any such event the fees and expenses of such separate counsel shall be paid
by the indemnifying party. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and does not
include any findings of fact or admissions of fault or culpability as to the
indemnified party, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
19
(d) If the
indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other, from the offering of the
Notes or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and the Underwriters, on the other, with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes purchased under this Agreement (before deducting expenses)
received by the Company, as set forth in the table on the cover page of the
Prospectus, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes purchased
under this Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the net proceeds from the sale of the Notes underwritten by it exceeds
the amount of any damages that such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
20
(e) The
Underwriters severally confirm and the Company acknowledges and agrees that the
statements regarding delivery of the Notes by the Underwriters set forth on the
cover page of, and the concession and reallowance figures and the paragraph
relating to stabilization by the Underwriters appearing under the caption
“Underwriting” in, the most recent Preliminary Prospectus and the Prospectus are
correct and constitute information concerning such Underwriters furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement
thereto or in any Non-Prospectus Road Show.
9. Defaulting
Underwriters. If, on the Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Notes
that the defaulting Underwriter agreed but failed to purchase on the Delivery
Date in the respective proportions which the principal amount of the Notes set
forth opposite the name of each remaining non-defaulting Underwriter in Schedule 1 hereto
bears to the aggregate principal amount set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that
the remaining non-defaulting Underwriters shall not be obligated to purchase any
of the Notes on the Delivery Date if the principal amount of the Notes that the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the aggregate principal amount of the Notes to be
purchased on the Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of principal amount of the
Notes that it agreed to purchase on the Delivery Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Notes
to be purchased on the Delivery Date. If the remaining Underwriters
or other underwriters satisfactory to the Representatives do not elect to
purchase the Notes that the defaulting Underwriter or Underwriters agreed but
failed to purchase on the Delivery Date, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 6 and 11. As used in this Agreement, the
term “Underwriter” includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto
that, pursuant to this Section 9, purchases Notes that a defaulting Underwriter
agreed but failed to purchase.
Nothing
contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Notes of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The
obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Company prior to delivery
of and payment for the Notes if, prior to that time, any of the events described
in Sections 7(i), 7(j) and 7(k) shall have occurred or if the Underwriters shall
decline to purchase the Notes for any reason permitted under this
Agreement.
21
11. Reimbursement of Underwriters’
Expenses. If the Company shall fail to tender the Notes
for delivery to the Underwriters for any reason or (b) the Underwriters shall
decline to purchase the Notes for any reason permitted under this Agreement, the
Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Notes, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section
9 by reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those
expenses.
12. Research Analyst Independence.
The Company acknowledges that the Underwriters’ research analysts and
research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal
policies, and that such Underwriters’ research analysts may hold views and make
statements or investment recommendations and/or publish research reports with
respect to the Company and/or the offering that differ from the views of their
respective investment banking divisions. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company may have against the Underwriters with respect to any conflict of
interest that may arise from the fact that the views expressed by their
independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such
Underwriters’ investment banking divisions. The Company acknowledges
that each of the Underwriters is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for
its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies that may be the subject of the
transactions contemplated by this Agreement.
13. No Fiduciary
Duty. The Company acknowledges and agrees that in connection
with this offering, sale of the Notes or any other services the Underwriters may
be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the
Company and any other person, on the one hand, and the Underwriters, on the
other, exists; (ii) the Underwriters are not acting as advisors, expert or
otherwise, to the Company, including, without limitation, with respect to the
determination of the public offering price of the Notes, and such relationship
between the Company, on the one hand, and the Underwriters, on the other, is
entirely and solely commercial, based on arms-length negotiations; (iii) any
duties and obligations that the Underwriters may have to the Company shall be
limited to those duties and obligations specifically stated herein; and (iv) the
Underwriters and their respective affiliates may have interests that differ from
those of the Company. The Company hereby waives any claims that the
Company may have against the Underwriters with respect to any breach of
fiduciary duty in connection with this offering.
14. Notices,
Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
22
(a) if to the
Underwriters, shall be delivered or sent by mail or facsimile transmission to
Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Debt Capital Markets, Power Group (Fax: 000-000-0000),
with a copy to the General Counsel at the same address; and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Office of the General Counsel (Fax:
000-000-0000).
(b) if to the
Company, shall be delivered or sent by mail or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
General Counsel (Fax: 000-000-0000).
Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the
Underwriters by either Representative.
15. Persons Entitled to Benefit of
Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company and their respective
successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company and the Underwriters
contained in this Agreement shall also be deemed to be for the benefit of the
directors, officers and employees of the Underwriters or the Company and each
person or persons, if any, who control any Underwriter or the Company within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement
of the Underwriters contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of the directors of the Company, the officers of
the Company who have signed the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. Survival. The
respective indemnities, representations, warranties and agreements of the
Company and the Underwriters contained in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the Notes and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
17. Definition of the Terms “Business
Day” and “Subsidiary”. For purposes of this Agreement, (a)
“business day” means
each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close and (b) “subsidiary” has the meaning
set forth in Rule 405.
18. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
19. Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same
instrument.
23
20. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
24
If the
foregoing correctly sets forth the agreement between the Company and the
Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very
truly yours,
PUBLIC
SERVICE COMPANY OF NEW
MEXICO
By: /s/ Xxxxx
X.
Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President and
Treasurer
Accepted:
|
|
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
For
themselves and as Representatives
of the
several Underwriters named
in
Schedule 1 hereto
XXXXXX
BROTHERS INC.
By: /s/ Xxxx Xxxxxxx
Authorized Representative
XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxx
Xxxxxx
Authorized Representative
SCHEDULE
1
Underwriters
|
Aggregate
principal amount of Notes to be Purchased
|
Xxxxxx
Brothers
Inc.
|
$43,000,000
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
|
$43,000,000
|
Deutsche
Bank Securities
Inc.
|
$43,000,000
|
Xxxxxx
Xxxxxxx & Co.
Incorporated
|
$43,000,000
|
RBC
Capital Markets
Incorporated
|
$43,000,000
|
Wachovia
Capital Markets,
LLC.
|
$43,000,000
|
Citigroup
Global Markets
Inc.
|
$26,000,000
|
Banc
of America Securities
LLC
|
$24,500,000
|
X.X.
Xxxxxx Securities
Inc.
|
$15,500,000
|
Wedbush
Xxxxxx Securities
Inc.
|
$15,500,000
|
Credit
Suisse Securities (USA)
LLC
|
$10,500,000
|
Total
|
$350,000,000
|
27
SCHEDULE
1(j)
List of all subsidiaries of
the Company
1.
|
PNM
Receivables Corp.
|
2.
|
MCB
Financial Group, Inc.
|
3.
|
Xxxxxxx
Resources, Inc.
|
4.
|
Republic
Holding Company
|
5.
|
Republic
Savings Bank, F.S.B.
|
6.
|
Bellamah
Associates Ltd.
|
7.
|
Bellamah
Community Development
|
8.
|
Bellamah
Holding Company
|
9.
|
Bellamah
Holding Ltd.
|
10.
|
Bellamah
Investors Ltd.
|
28
SCHEDULE
2
·
|
Final
Term Sheet, dated May 8, 2008, relating to the Notes, as filed pursuant to
Rule 433 under the Securities Act and attached as Schedule 3
hereto.
|
29
SCHEDULE
3
FIXED RATE TERM
SHEET
PUBLIC
SERVICE COMPANY OF NEW MEXICO
7.95%
SENIOR UNSECURED NOTES DUE 2018
Issuer:
|
Public
Service Company of New Mexico
|
Ratings:
|
Baa3/BB+
(Xxxxx’x/S&P)
|
Principal
Amount:
|
$350,000,000
|
Security
Type:
|
Senior
Unsecured Notes
|
Legal
Format:
|
SEC
Registered
|
Trade
Date:
|
May
8, 2008
|
Settlement
Date:
|
May
13, 2008
|
Maturity
Date:
|
May
15, 2018
|
Issue
Price:
|
100.0%
of principal amount
|
Coupon:
|
7.95%
|
Benchmark
Treasury:
|
3.5%
due February 15, 2018
|
Benchmark
Treasury Yield:
|
3.765%
|
Spread
to Benchmark Treasury:
|
418.5
basis points (4.185%)
|
Interest
Payment Dates:
|
Semi-annually
on May 15 and November 15, commencing on November 15,
2008
|
Redemption
Provisions:
|
|
Make-whole
call:
|
At
a discount rate of Treasury Rate plus 60 basis pts.
|
Denominations:
|
$1,000
and integral multiples thereof
|
Joint
Bookrunners:
|
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
|
Joint
Bookrunners:
|
Citigroup
Global Markets Inc.
Deutsche
Bank Securities Inc.
Xxxxxx
Xxxxxxx & Co. Incorporated
RBC
Capital Markets Corporation
Wachovia
Capital Markets, LLC
|
Co-Managers:
|
Banc
of America Securities LLC
Credit
Suisse Securities (USA) LLC
X.X.
Xxxxxx Securities Inc.
Wedbush
Xxxxxx Securities Inc.
|
30
Recent
Developments:
|
On
May 8, 2008, PNM entered into a short-term letter of credit facility in an
aggregate principal amount of $100.0 million which expires on April
30, 2009. In the event of a downgrade of either of PNM's long-term
unsecured senior credit ratings below their current ratings by S&P or
Xxxxx’x, PNM will be required to take all actions to attempt to obtain all
necessary regulatory approvals and consents and use all commercially
reasonable efforts to procure from the lenders under PNM's revolving
credit facility and the revolving credit facility of its parent, PNM
Resources, Inc., all consents, in each case required to allow PNM to grant
security interests in its property for the benefit of the lenders under
PNM's delayed draw term facility entered into on May 5, 2008 and PNM's
short-term letter of credit facility entered into on May 8,
2008. After receipt of such approvals and consents, PNM must
promptly grant a first priority perfected security interest, subject to
the pari passu liens granted or to be granted to other lenders, in all of
its property (other than the assets being sold in the contemplated sale of
its gas utility, assets under its current mortgage and assets which would
customarily be excluded from a conventional utility mortgage, and any
other assets as to which the parties reasonably determine that the cost of
obtaining a security interest or perfection thereof are excessive in
relation to the benefit to the lenders under the PNM delayed draw term
facility and the PNM letter of credit
facility).
|
The
issuer has filed a registration statement (including a prospectus) with the U.S.
Securities and Exchange Commission (SEC) for this offering. Before
you invest, you should read the prospectus for this offering in that
registration statement, and other documents the issuer has filed with the SEC
for more complete information about the issuer and this offering. You
may get these documents for free by searching the SEC online database (XXXXX®)
at xxx.xxx.xxx. Alternatively,
you may obtain a copy of the prospectus from Xxxxxx Brothers Inc. by calling
0-000-000-0000 or from Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
toll free at 0-000-000-0000.
Note: a
securities rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time.
31
EXHIBIT
B-1
FORM OF OPINION OF XXXXXXX
X. XXXXX
May 13, 2008
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I have
acted as counsel for Public Service Company of New Mexico, a New Mexico
corporation (the “Company”), in connection with the issuance and sale by the
Company of $350.0 million aggregate principal amount of 7.95% Notes due 2018
(the “Notes”) pursuant to the Indenture dated as of August 1, 1998 between the
Company and The Bank of New York (as successor to JPMorgan Chase Bank, N.A.), as
Trustee (the “Trustee”) (the “Indenture”), as supplemented by the third
supplemental indenture to be dated as of May 13, 2008 between the Company and
the Trustee (the “Supplemental Indenture”) and in accordance with that certain
Underwriting Agreement dated as of May 8, 2008 between the Company and the
Underwriters named therein (the “Agreement”). Capitalized terms used
herein which are defined in the Agreement have the meanings set forth in the
Agreement, unless otherwise defined herein.
This
opinion letter is delivered to you at the request of the Company pursuant to
Section 7(d) of the Agreement.
In
rendering the opinions set forth below, I have reviewed and examined the
Agreement, the Indenture, the Supplemental indenture, the global Note, the
Registration Statement, the Preliminary Prospectus, the Prospectus and each
Issuer Free Writing Prospectus and such other documents as I have deemed
necessary to render such opinions. I have also examined originals or
copies, certified or otherwise identified to my satisfaction, of the articles of
incorporation and the bylaws or other organizational documents of the Company,
resolutions of the Board of Directors of the Company and of the pricing
committee of the Board of Directors of the Company’s parent company, PNM
Resources, Inc., and certificates of public officials concerning the legal
existence and/or good standing of the Company. In addition, I have
examined such other records, agreements, documents and other instruments, and
such certificates or comparable documents of public officials and of officers
and representatives of the Company, and have made such inquiries of such
officers and representatives, as I have deemed relevant and necessary as a basis
for the opinions hereinafter set forth.
B-1-1
As to
questions of fact material to such opinions, I have, when relevant facts were
not independently established, relied upon certificates of the Company and of
its officers, upon certificates and comparable documents of public officials,
and upon statements in the Registration Statement, the Preliminary Prospectus,
the Prospectus and each Issuer Free Writing Prospectus.
In making
the examinations of the Agreement and the other documents described above, I
have assumed the genuineness of all signatures (other than the signatures of the
Company), the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, the conformity to original documents of
all documents submitted to me as certified or photostatic copies (including
telecopies) and the authenticity of the originals of such documents and the
correctness of all statements of fact contained in all such original
documents. No opinion is expressed regarding compliance with
covenants in any agreement to which the Company or any of its subsidiaries is a
party incorporating calculations of a financial or accounting
nature. I have also assumed the validity and constitutionality of
each relevant statute, rule, regulation and agency covered by this opinion
letter.
Based
upon the foregoing and subject to and limited by the qualifications stated
herein, I am of the opinion that:
(i) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of New Mexico, with full corporate
power and authority to own its properties and conduct its business as described
in the most recent Preliminary Prospectus and the Prospectus and to enter into
and to perform its obligations under, or as contemplated by, the
Agreement. The Company is duly qualified to do business as a foreign
corporation in good standing under the laws of each jurisdiction which requires
such qualification where the failure to be so qualified would, individually, or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(ii)
The Company has an authorized capitalization as set forth in each of the most
recent Preliminary Prospectus and the Prospectus.
(iii) None
of the execution, delivery and performance of the Agreement by the Company, the
execution and delivery of the Supplemental Indenture and the Notes, the issue
and sale of the Notes, the compliance by the Company with the Agreement, the
Indenture, the Supplemental Indenture and the Notes, or the consummation of the
transactions therein contemplated and the application of the proceeds from the
sale of Notes as described under “Use of Proceeds” in each of the most recent
Preliminary Prospectus and Prospectus, will (i) conflict with, result in a
breach or violation of, or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to, any statute, law, rule,
regulation or, to my knowledge after reasonable inquiry, judgment, order or
decree applicable to the Company of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties or (ii) conflict with, result in a
breach or violation of, or imposition of any lien, charge or encumbrance upon
any property or assets of the Company and its subsidiaries, or constitute a
default under any indenture, mortgage, deed of trust, loan agreement, license or
other agreement or instrument known to me after reasonable inquiry to which the
Company is a party or by which the Company is subject.
B-1-2
(iv) To
my knowledge after reasonable inquiry, and except as described in each of the
most recent Preliminary Prospectus and the Prospectus, (A) no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or its property is pending or threatened
that (1) could reasonably be expected to have a material adverse effect on the
performance of the Agreement or the consummation of any of the transactions
contemplated thereby or (2) could reasonably be expected to have a Material
Adverse Effect; and (B) no labor disturbance by or dispute with the employees of
the Company exists or is threatened or is imminent that could reasonably be
expected to have a Material Adverse Effect.
(v) The
statements set forth in the most recent Preliminary Prospectus and the
Prospectus under the caption “Description of Notes” and “Description of Senior
Unsecured Notes” insofar as they purport to constitute a summary of the terms of
the securities, are accurate summaries in all material respects.
(vi) Each
of the Indenture and the Supplemental Indenture has been duly authorized,
executed and delivered by the Company.
(vii) The
Notes have been duly authorized and executed by the Company.
I am a
member of the Bar of the State of New Mexico, and, for purposes of this opinion,
do not hold myself out as an expert on the laws of any jurisdiction other than
the State of New Mexico and express no opinion as to any choice of law matters
nor as to, or the effect or applicability of, any laws other than the laws of
the State of New Mexico, except that I express no opinion as to the
applicability of, or compliance with, New Mexico “blue sky” or state securities
laws. The opinions herein are expressed as of the date hereof, and I
assume no obligation to revise, update or supplement such opinions to reflect
any change in any fact or circumstance that hereafter comes to my attention, or
any change in law that may hereafter occur, whether by legislative action,
judicial decision, or in any other manner. This opinion letter is
furnished only to you in connection with the contemplated transactions and is
solely for your benefit. This opinion letter may not be used, relied
upon, circulated, quoted or otherwise referred to for any purpose without my
prior written consent (including by any person who acquires Notes from the
Underwriters), except as may be required by applicable law or
regulation.
Very truly yours,
By
Xxxxxxx X. Xxxxx
Associate General Counsel
SEC Reporting and
Corporate
Transactions
PNM Resources, Inc.
X-0-0
XXXXXXX
X-0
FORM OF OPINION OF XXXXXXXX
XXXXXXX LLP
May 13,
2008
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
We have
acted as counsel for Public Service Company of New Mexico, a New Mexico
corporation (the “Company”), in connection with the issuance and sale by the
Company of $350.0 million aggregate principal amount of its 7.95% Notes due 2018
(the “Notes”) pursuant to the Indenture dated as of August 1, 1998 between the
Company and The Bank of New York (as successor to JPMorgan Chase Bank, N.A.), as
Trustee (the “Trustee”) (the “Indenture”), as supplemented by the third
supplemental indenture to be dated as of May 13, 2008 between the Company and
the Trustee (the “Supplemental Indenture”) and in accordance with that certain
Underwriting Agreement dated as of May 8, 2008 between the Company and the
Underwriters named therein (the “Agreement”). Capitalized terms used
herein which are defined in the Agreement have the meanings set forth in the
Agreement, unless otherwise defined herein.
This
opinion letter is delivered to you at the request of the Company pursuant to
Section 7(d) of the Agreement.
In
rendering the opinions set forth below, we have reviewed and examined the
Agreement, the Indenture, the Supplemental indenture, the global Note, the
Registration Statement, the Preliminary Prospectus, the Prospectus and each
Issuer Free Writing Prospectus and such other documents as we have deemed
necessary to render such opinions. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of the articles
of incorporation and the bylaws or other organizational documents of the Company
and resolutions of the Board of Directors of the Company and the pricing
committee of the Board of Directors of the Company’s parent company, PNM
Resources, Inc. In addition, we have examined such other records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
B-2-1
As to
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon certificates of the Company and of
its officers, upon certificates and comparable documents of public officials,
and upon statements in the Registration Statement, the Preliminary Prospectus,
the Prospectus and each Issuer Free Writing Prospectus. As to all
matters of New Mexico law, including the opinion set out in paragraph 2 below,
to the extent that it relates to New Mexico law, we are relying exclusively on
the opinion letter of Xxxxxxx X. Xxxxx, Associate General Counsel, SEC Reporting
and Corporate Transactions, of the Company, dated May 13, 2008. As
used herein, the phrase “to the best of our knowledge” means knowledge based
upon and limited to the representations and warranties of the Company contained
in the Agreement and in the documents delivered by the Company pursuant to the
Agreement, inquiries of an appropriate officer of the Company whom we have
determined is likely to have personal knowledge of the matters covered by the
opinion, and the current conscious awareness of facts of the attorneys currently
practicing law with our firm who had involvement in the transaction contemplated
by the Agreement.
In making
the examinations of the Agreement and the other documents described above, we
have assumed the genuineness of all signatures (other than the signatures of the
Company), the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies (including
telecopies) and the authenticity of the originals of such documents and the
correctness of all statements of fact contained in all such original
documents. No opinion is expressed regarding compliance with
covenants in any agreement to which the Company or any of its subsidiaries is a
party incorporating calculations of a financial or accounting
nature. We have also assumed the due authorization, execution and
delivery of such documents by parties other than the Company and the validity
and constitutionality of each relevant statute, rule, regulation and agency
covered by this opinion letter.
Based
upon the foregoing and subject to and limited by the qualifications stated
herein, we are of the opinion that:
(1) Each
of the Indenture and the Supplemental Indenture constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to or affecting creditors’
rights generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture has been duly qualified under the Trust Indenture Act.
(2) When
authenticated by the Trustee in accordance with the Indenture and delivered to
the Underwriters against payment therefor in accordance with the terms of the
Agreement, the Notes will have been validly issued and delivered and will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture and the Supplemental Indenture and enforceable against the
Company in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws relating
to or affecting the enforcement of creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
B-2-2
(3) The
Agreement has been duly and validly authorized, executed and delivered by the
Company.
(4) None
of the execution, delivery and performance of the Agreement by the Company, the
execution and delivery of the Supplemental Indenture and the Notes, the issue
and sale of the Notes, the compliance by the Company with the Agreement, the
Indenture, the Supplemental Indenture and the Notes, or the consummation of the
transactions therein contemplated and the application of the proceeds from the
sale of Notes as described under “Use of Proceeds” in each of the most recent
Preliminary Prospectus and Prospectus will conflict with,
result in a breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, (A) the charter, bylaws,
or other organizational documents of the Company or (B) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is subject and
which is filed as an exhibit to the Company’s most recent Annual Report on Form
10-K filed with the Commission.
(5) No
consent, approval, authorization, filing with or order of any court or
governmental agency or body is required to be obtained by the Company for the
solicitation of offers to purchase the Notes, the issue and sale of the Notes or
the consummation by the Company of the transactions contemplated by the
Agreement, except such as have been obtained under the Securities Act and such
as may be required under the blue sky laws of any jurisdiction (as to which we
do not express any opinion) in connection with the sale and distribution of the
Notes in the manner contemplated in the Agreement and in the
Prospectus.
(6) The
Registration Statement filed with the Commission on April 1, 2008 became
effective under the Securities Act as of 5:00 p.m. on April 29, 2008, and the
Prospectus was filed with the Commission pursuant to Rule 424(b) under the
Securities Act on May 9, 2008. To the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose is pending or threatened.
(7) (A)
The Registration Statement, on the latest Effective Date and on the Delivery
Date, and (B) the Prospectus, when filed with the Commission pursuant to Rule
424(b) and on the Delivery Date, (except in each case as to financial statements
and other financial or statistical data contained or incorporated by reference
therein, upon which such counsel need not pass), complied as to form in all
material respects with the requirements of the Securities Act and the respective
rules and regulations of the Commission thereunder; each document incorporated
therein by reference as originally filed pursuant to the Exchange Act (except as
to financial statements and other financial or statistical data contained or
incorporated by reference therein, upon which we do not express any opinion)
complied as to form when so filed in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder.
(8) The
statements made in each of the most recent Preliminary Prospectus and the
Prospectus under the caption “Certain United States Federal Income Tax
Consequences,” insofar as they purport to constitute summaries of matters of
United States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects.
B-2-3
(9) The
Company is not and after the application of the proceeds from the sale of the
Notes as described in the Prospectus, will not be, an “investment company,” or
an entity “controlled” by an investment company, as such terms are defined in
the Investment Company Act of 1940, as amended.
* * * *
We have
participated in conferences with officers and other representatives of the
Company at which the contents of the Registration Statement, the Prospectus, the
Preliminary Prospectus and related matters were discussed and we have consulted
with officers and other employees of the Company to inform them of the
disclosure requirements under the Securities Act. We have examined
various reports, records, contracts and other documents of the Company and
orders and instruments of public officials, which our investigation led us to
deem pertinent. In addition, we participated in one or more due
diligence conferences with representatives of the Company and attended the
closing at which the Company satisfied the conditions contained in Section 7 of
the Agreement. We have not, however, undertaken to make any
independent review of other records of the Company which our investigation did
not lead us to deem pertinent. As to the statistical statements in
the most recent Preliminary Prospectus, Prospectus and Registration Statement
(which includes the documents incorporated by reference therein), we have relied
solely on the officers of the Company. We accordingly assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the most recent Preliminary Prospectus, the Prospectus or the
Registration Statement, except as specifically stated in numbered opinion (7)
above, and we have not made any independent check or verification
thereof. But such conferences, consultation, examination and
attendance disclosed to us no information with respect to such other matters
that gives us reason to believe that and, on the basis of the foregoing, no
facts have come to our attention which have led us to believe that (i) the
Registration Statement, as of the Effective Date and as of May 13, 2008,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Prospectus, as of its date
and as of the date hereof, contained or contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (iii) the most recent Preliminary Prospectus, together with
the Issuer Free Writing Prospectuses in the Pricing Disclosure Package, as of
the Applicable Time, contained or contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; in each case, except with respect to the financial statements and
other financial or statistical data included in or incorporated by reference in
the Registration Statement, the Prospectus, the most recent Preliminary
Prospectus and the Issuer Free Writing Prospectus in the Disclosure Package, as
to which we express no opinion.
B-2-4
The
Agreement is governed by the laws of the State of New York. We
express no opinion as to, or the effect or applicability of, any laws other than
the laws of the State of New York, the federal laws of the United States of
America. We express no opinion as to the applicability of, or
compliance with, any state securities or blue sky laws.
The
opinions herein are expressed as of the date hereof, and we assume no obligation
to revise, update or supplement such opinions to reflect any change in any fact
or circumstance that hereafter comes to our attention, or any change in law that
may hereafter occur, whether by legislative action, judicial decision, or in any
other manner. This opinion letter is furnished only to you and the
underwriters in connection with the contemplated transactions and is solely for
your and the underwriters’ benefit. This opinion letter may not be
used, relied upon, circulated, quoted or otherwise referred to for any purpose
without our prior written consent (including by any person who acquires Notes
from the Underwriters), except as may be required by applicable law or
regulation.
Very
truly yours,
X-0-0
XXXXXXX
X-0
FORM OF OPINION OF XXXXX
& XXXXXX L.L.P.
May 13,
2008
Xxxxxx
Brothers Inc.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Our firm
has been retained as special Arizona counsel for Public Service Company of New
Mexico (the “Company”) in connection with (i) the issuance by the Company of
$350.0 million aggregate principal amount of its 7.95% Notes due 2018 (the
(“Notes”) pursuant to the Indenture dated as of August 1, 1998 between the
Company and The Bank of New York Trust Company, N.A. (as successor to JPMorgan
Chase Bank, N.A. (formerly JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank)), a national banking association, as Trustee (the “Trustee”), as
supplemented by the third supplemental indenture, dated as of May 13, 2008 (the
“Supplemental Indenture”), under which the Notes are issued, and (ii) the sale
of the Notes to you pursuant to the Underwriting Agreement, dated as of May 8,
2008, between the Company and the Underwriters named therein (the
“Agreement”). Capitalized terms used herein which are defined in the
Agreement have the meanings set forth in the Agreement, unless otherwise defined
herein.
This
opinion letter is being delivered to you at the request of the Company pursuant
to Section 7(d) of the Agreement.
In
connection with the opinions herein contained, we have examined, among other
things, the following:
(1) a
certificate, of recent date, of the Arizona Corporation Commission stating that
the Company is in good standing and authorized to transact business as a foreign
corporation in the State of Arizona (the “Good Standing
Certificate”);
(2)
a copy of the Supplemental Indenture;
(3) a
copy of the Agreement; and
(4) such
other documents, certificates, and records as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
B-3-1
As to
matters of fact material to the opinions hereinafter expressed, we have relied
solely on the certificate of the Company attached hereto as Exhibit A (the
“Company Certificate”), and no other investigation or inquiry with respect
thereto has been made.
We have
assumed, and have not verified (i) that each of the Notes, the Agreement, and
the Supplemental Indenture (the “Documents”) provided to us in unsigned form
will be duly executed and delivered in substantially the form provided to us;
(ii) the actual execution of the conformed copies of the Documents
provided to us, the authenticity of such Documents submitted as originals and
the conformity to originals of such Documents submitted as copies; (iii) the
legal capacity and due authority of each individual signing the Documents; and
(iv) that the Documents accurately describe and contain the mutual intent,
understanding and business purpose of the parties, and that there are no oral or
written statements or agreements, understandings or negotiations, nor any usage
of trade or course of prior dealing among the parties that directly or
indirectly modify, define, amend, supplement, or vary, or purport to modify,
define, amend, supplement, or vary, any of the terms of such documents or any of
the parties’ rights or obligations thereunder, by waiver or
otherwise.
Based on
the foregoing, it is our opinion that, insofar only as the laws of the State of
Arizona are concerned:
1. Based
solely on the Good Standing Certificate, the Company is duly qualified as a
foreign corporation and is in good standing under the laws of the State of
Arizona.
2. No
order, approval, authorization, or consent of any court or governmental agency
or body of the State of Arizona is legally required for the execution and
delivery by the Company of the Supplemental Indenture or the Agreement or for
the performance by the Company of its obligations thereunder, or the issuance by
the Company of the Notes as described in the Supplemental Indenture, except as
may be required under Arizona securities or blue sky laws, as to which we
express no opinion.
The
opinions herein are limited solely to the laws of the State of Arizona and we
express no opinion on the laws of any other jurisdiction.
The
opinions expressed herein are based upon the law in effect on the date hereof,
and we assume no obligation to revise or supplement this opinion should such law
be changed by legislative action, judicial decision, or in any other manner, or
otherwise to notify you of any changes in law or fact relevant to the opinions
expressed herein. Except as described in the next paragraph below,
this opinion letter is rendered solely for your benefit in connection with the
transactions described above, and this opinion letter is not to be used,
circulated, quoted, or otherwise referred to for any other purpose.
A copy of
this opinion is being delivered to the Trustee, Xxxxxxxx Xxxxxxx LLP and Xxxxxxx
X. Xxxxx, Esq., Associate General Counsel, SEC Reporting and Corporate
Transactions, of PNM Resources, Inc. and may be considered by each, for all
intents and purposes, to have the same force and effect as if it were directed
to them.
Very
truly yours,
B-3-2