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Exhibit 1.1
ORION POWER HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
May [_], 2001
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Orion Power Holdings, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 10,387,077 shares and, at the election of the Underwriters, up to 1,950,000
additional shares of common stock, $.01 par value ("Stock") of the Company and
the stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 2,612,923 shares of Stock, with each
Selling Stockholder selling the number of Shares indicated on Schedule II
hereto. The aggregate 13,000,000 of shares to be sold by the Company and the
Selling Stockholders is herein called the "Firm Shares" and the aggregate of
1,950,000 additional shares to be sold by the Company is herein called the
"Optional Shares". The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares".
It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement (the "Convertible Notes Underwriting
Agreement") providing for the sale by the Company of up to a total of
$230,000,000 in aggregate principal amount of Convertible Senior Notes (the
"Convertible Notes") including the overallotment option thereunder, through
arrangements with Xxxxxxx Xxxxx & Co. and certain underwriters. Anything herein
or therein to the contrary notwithstanding, the respective closings under this
Agreement and the Convertible Notes Underwriting Agreement are hereby expressly
made independent of one another. Two forms of prospectus are to be used in
connection with the offering and sale of
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shares of Stock and the Convertible Notes contemplated by the foregoing, one
relating to the Shares hereunder and the other relating to the Convertible
Notes.
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-60796) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; 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 of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
related to the Shares included in the Initial Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and including the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by virtue
of Rule 430A under the Act to be part of the Initial Registration
Statement at the time it was declared effective, each as amended at the
time such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; such form of final prospectus related to the
Shares, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to Items 7 and
11(m) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable
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effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to Items 7 and
11(m) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest unaudited financial statements included in
the Prospectus any material 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, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material change in the capital stock, stockholders' equity or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"), otherwise
than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries have good and marketable title
in fee simple to all material real property and good and marketable title
to all material personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries except as described in the
Prospectus;
(vi) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, and each subsidiary of the Company has been duly
incorporated, organized or formed and is validly existing as a
corporation, partnership or limited liability company, as the case may be,
in good standing under the laws of its jurisdiction of incorporation,
organization and formation;
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description
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of the Stock contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims,
except for the security interests granted pursuant to the Orion Power New
York, L.P. Credit Facility, the Orion Power MidWest, L.P. Credit Facility
and the Liberty Electric Power, LLC Credit Facility, as set forth in the
Prospectus and for such liens, encumbrances, equities or claims that would
not have a Material Adverse Effect;
(viii) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of
pre-emptive or similar rights and will conform to the description of the
Stock contained in the Prospectus;
(ix) The issue and sale of the Shares to be sold by the Company
hereunder and the compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated (i) will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
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) will not result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company and (iii) will not
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; except in
the cases of clauses (i) and (iii) as would not, singly or in the
aggregate, have a Material Adverse Effect; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
such court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except as such have been obtained, the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its Certificate of Incorporation or Certificate of Formation,
as applicable, or by-laws, partnership agreement or limited liability
company agreement, as applicable, or (ii) in default in the performance or
observance of any material obligation, agreement, 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 or
any of its properties may be bound, except in the case of clause (ii) as
would not, singularly or in the aggregate, have a Material Adverse Effect;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Underwriting,"
"Risk Factors- We are subject to stringent governmental regulation, which
may be burdensome or lead to significant costs or liabilities," "Risk
Factors- We have agreed to provide all of the energy required by
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Duquesne Light Company to satisfy its provider of last resort obligation,
which could result in significant losses to us," "Business" and "Certain
Relationships and Related Party Transactions" insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xii) Other than as set forth in the 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, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a Material Adverse Effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened by governmental authorities or
threatened by others against the Company or any of its subsidiaries;
(xiii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such term
is defined in the United States Investment Company Act of 1940, as amended
(the "Investment Company Act");
(xiv) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(xv) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xvi) The Company and its subsidiaries have complied in all material
respects with all laws, regulations and orders applicable to it or its
businesses the violation of which would have a Material Adverse Effect;
(xvii) The Company and its subsidiaries own, license or possess or
have the right to use or acquire the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, the "Intellectual Property") presently employed by them in
connection with, and material to, collectively or in the aggregate, the
operation of the businesses now operated by them taken as a whole, and
neither the Company nor any of its subsidiaries has received any written
notice of infringement of or conflict with asserted rights of others with
respect to the foregoing which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect;
(xviii) The Company and its subsidiaries possess all certificates,
authorizations, licenses or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
the lack of which would not result in a Material Adverse Effect and have
not received any written notice of proceedings relating to the revocation
or modification of any such certificate, authorization, license or permit
that, if determined adversely to the Company or any of its subsidiaries,
would individually
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or in the aggregate have a Material Adverse Effect other than as set forth
in the Prospectus;
(xix) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company is imminent
that is reasonably likely to have a Material Adverse Effect;
(xx) Other than as set forth in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"). To the knowledge of the Company,
neither the Company nor any of its subsidiaries owns or operates any real
property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect other than as set forth in the Prospectus;
(xxi) All tax returns required to be filed by the Company and its
subsidiaries in all jurisdictions have been timely and duly filed or
legally extended, other than those filings being contested in good faith
and those where the failure to file would not have a Material Adverse
Effect. There are no tax returns of the Company or any of its subsidiaries
that are currently being audited by state, local, or federal taxing
authorities or agencies (and with respect to which the Company or any of
its subsidiaries has received written notice), where the findings of such
audit, if adversely determined, would result in a Material Adverse Effect.
All taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest and other than those that are not
material or that would not result in a Material Adverse Effect other than
as set forth in the Prospectus;
(xxii) The Company and its subsidiaries maintain insurance covering
their respective properties, operations, personnel and businesses which
insures against such losses and risks as are adequate in accordance with
its reasonable business judgment to protect the Company, its subsidiaries
and their respective businesses. Neither the Company nor any of its
subsidiaries has received notice from any insurer or agent of such insurer
that substantial capital improvements or other material expenditures will
have to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force at the Time of Delivery;
(xxiii) The Company has no reason to believe that the sources from
which the statistical data included in the "Business" section of the
Prospectus are based on or derived from are not reliable and accurate;
(xxiv) Neither the Company nor any of its subsidiaries is (i) subject
to regulation as a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" of a subsidiary or holding company or a
"public utility company" under Section 2(a) of the
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Public Utility Holding Company Act of 1935, (ii) subject to regulation
under the Federal Power Act, as amended, other than due to its
subsidiaries' status as power marketers and owners of certain electric
transmission facilities subject to the Federal Power Act, and its
subsidiaries have all exemptions and waivers from regulation as typically
granted by FERC to power marketers or entities with market based authority
affiliated with utilities, or (iii) subject to any state law or regulation
with respect to the rates or financial or organizational regulation of
electric utilities, other than due to its subsidiaries' status as
"electric corporations" under New York law subject to lightened
regulation, except as otherwise disclosed in the Prospectus;
(xxv) Each of the power generation projects in which the Company or
its subsidiaries has an interest, which is subject to the requirements
under the Public Utility Regulatory Policies Act of 1978, as amended, and
the regulations of FERC promulgated thereunder, as amended from time to
time, necessary to be a "qualifying cogeneration facility" and/or a
"qualifying small power production facility" meets such requirements or
will meet such requirement;
(xxvi) Each of the power generation projects in which the Company or
its subsidiaries has an interest, which is subject to the requirements
under the Federal Power Act discussed in Paragraph (xiv) above, meets the
requirements for, and has obtained from FERC, Exempt Wholesale Generator
Status, under Section 32 of the Public Utility Holding Company Act of
1935, as amended, and FERC's regulations; and
(xxvii) The Stock is of a class of equity securities in which there
is a "bona fide independent market" within the meaning of Section b(3) of
National Association of Securities Dealers ("NASD") Rule 2720 and
particularly, is of a class of equity securities which has been listed on
and is in compliance with the requirement for continued listing on a
national securities exchange for at least 90 calendar days immediately
preceding the filing of the registration statement on Form S-1 under the
Securities Act.
(b) Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power of Attorney and the Custody Agreement hereinafter referred
to, and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder
has full right, power and authority to enter into this Agreement, the
Power of Attorney and the Custody Agreement and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the property
or assets of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or
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By-laws of such Selling Stockholder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to the Time
of Delivery (as defined in Section 4 hereof) such Selling Stockholder will
have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances, equities
or claims; and, upon delivery of such Shares and payment therefor pursuant
hereto and thereto, good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the several
Underwriters, as the case may be;
(iv) To the extent that any Selling Stockholder is not selling all
its securities of the Company, such Selling Stockholder has executed and
delivered a letter restricting such Selling Stockholder's ability to
transfer its remaining securities of the Company after the date of the
Prospectus, in the form of Annex VII hereto;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary Prospectus
and the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished to you
(the "Custody Agreement"), duly executed and delivered by such Selling
Stockholder to Orion Power Holdings, Inc., as custodian (the "Custodian"),
and such Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine
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the purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the delivery of
the Shares to be sold by such Selling Stockholder hereunder and otherwise
to act on behalf of such Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership
or corporation, by the dissolution of such partnership or corporation, or
by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of
the Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as
if such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Stockholders,
at a purchase price per share of $[_____], the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm Shares to be sold by the Company and each of the
Selling Stockholders as set forth opposite their respective names in Schedule II
hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters from
the Company and all of the Selling Stockholders hereunder; provided, however,
that all of the Firm Shares to be sold by Tokyo Electric Power Company
International B.V. ("Tepco") hereunder shall be sold to [Xxxxxxx, Xxxxx & Co.]
only and no other Underwriter shall purchase any Firm Shares from Tepco, and
provided, further, that the Underwriters other than [Xxxxxxx, Sachs & Co.] shall
purchase from the other Selling Stockholders a number of Firm Shares greater
than the number they would otherwise be entitled to purchase from the other
Selling Stockholders pursuant to the terms of this paragraph, in an amount which
will give each Underwriter the total number of Firm Shares it would have
otherwise purchased using the formula included herein and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have
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been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,950,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering sales of
shares in excess of the number of Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight
hours' prior notice to the Company and the Selling Stockholders shall be
delivered by or on behalf of the Company and the Selling Stockholders to
Xxxxxxx, Sachs & Co., through the facilities of The Depository Trust
Company ("DTC"), for the account of such Underwriter, against payment by
or on behalf of such Underwriter of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by the
Company and each of the Selling Stockholders to Xxxxxxx, Xxxxx & Co. at
least forty-eight hours in advance. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery
and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York
City time, on _______ [__], 2001 or on such other time and date as
Xxxxxxx, Sachs & Co. and the Company may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York City time, on the date
specified by Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx,
Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxxxx, Xxxxx & Co. and the
Company may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(m) hereof, will be delivered at the
offices of Xxxxxx & Xxxxxxx, 885 Third
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Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (the "Closing Location"), and the Shares
will be delivered at the Designated Office, all at each Time of Delivery.
A meeting will be held at the Closing Location at 2:00 p.m., New York City
time, on the New York Business Day next preceding each Time of Delivery,
at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof;
to advise you 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 any Preliminary Prospectus or prospectus, of the suspension of
the qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing of
the Registration Statement or 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 any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you 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 Shares; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Shares 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
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necessary during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection
with sales of any of the Shares at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than
(i) pursuant to this agreement, (ii) pursuant to the Convertible Notes
Underwriting Agreement, (iii) pursuant to employee stock option plans
existing on, or upon the conversion, exercise or exchange of convertible,
exercisable or exchangeable securities outstanding as of, the date of this
Agreement or (iv) Stock, warrants to purchase Stock, or securities
convertible or exchangeable into Stock issued in connection with
acquisitions and joint ventures that are used or useful for the Company's
business, provided that the recipients agree to similar restrictions for
the period beginning the date hereof and continuing to and including the
date 90 days after the date of this Prospectus), without your prior
written consent;
(f) To furnish to its stockholders or file with the Commission by
XXXXX as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year, to
make available to its stockholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the
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Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the Shares to be issued and sold by the Company on the New York Stock
Exchange (the "Exchange");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act; and
(k) 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 Act.
6. The Company and each of the Selling Stockholders covenant and agree
with the several Underwriters that (a) the Company will pay or cause to be paid
the following: (i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys;
(iv) all fees and expenses in connection with listing the Shares on the New York
Stock Exchange; and (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; and (b) the Company will pay or cause to be
paid: (i) the cost of preparing stock certificates; (ii) the cost and charges of
any transfer agent or registrar; and (iii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make. The fees and
disbursements of counsel for the Underwriters referred to in clauses (iii) and
(v) of this section will be, in the aggregate, $7,500. Each Selling Stockholder
will pay its own out-of-pocket costs and expenses to the extent such costs are
not paid by the Company as required by the immediately preceding sentence, in
connection with the transactions contemplated by this Agreement, including all
taxes incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder.
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7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Underwriters, shall have
furnished to you such written opinion in the form attached as Annex I
hereto, dated such Time of Delivery, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters;
(b) Stroock & Stroock & Xxxxx LLP, counsel for the Company, shall
have furnished to you their written opinion in the form attached as Annex
II hereto, dated the Time of Delivery;
(c) Xxxxxxxx & Xxxxx, counsel for the Company, shall have furnished
to you their written opinion in the form attached as Annex III hereto,
dated the Time of Delivery;
(d) Xxxxxx Xxxx & Priest LLP, counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in
form of Annex IV hereto;
(e) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel, dated the First Time of Delivery, in form of
Annex V hereto;
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, Xxxxxx Xxxxxxxx LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect previously agreed and
attached hereto as Annex VI;
(g) (i) Neither the Company nor any of its subsidiaries, on a
consolidated basis, shall have sustained since the respective dates as of
which information is given in the Registration Statement and the
Prospectus any material 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, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock,
stockholders' equity or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, 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 Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
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(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
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;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iv) in the judgment
of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(j) The Shares to be sold by the Company and the Selling Stockholders
at such Time of Delivery shall have been duly listed, subject (in the case
of the Shares to be issued and sold by the Company) to notice of issuance,
on the New York Stock Exchange;
(k) The Company has obtained and delivered to the Underwriters
executed copies of a lock-up agreement attached hereto as Annex VII from
each of the stockholders of the Company listed on Schedule III hereto;
(l) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(m) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholders, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively,
herein at and as of such Time of Delivery, as to the performance by the
Company and the Selling Stockholders of all of their respective
obligations hereunder to be performed at or prior to such Time of
Delivery.
8. (a) The Company will indemnify and hold harmless each Underwriter and
each Selling Stockholder, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such Selling Stockholder, as the
case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Selling
Stockholder, as the case may be, for any reasonable legal or other expenses
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reasonably incurred by such Underwriter or such Selling Stockholder, as the case
may be, in connection with investigating or defending any such action or claim
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 or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with either (1) written information furnished
to the Company by any Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein, or (2) written information furnished to the Company by any Selling
Stockholder expressly for use therein.
(b) Each Selling Stockholder, severally but not jointly, will indemnify
and hold harmless each Underwriter and the Company against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or the
Company, as the case may be, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter and
the Company, as the case may be, for any reasonable legal or other expenses
reasonably incurred by such Underwriter or the Company, as the case may be, in
connection with investigating or defending any such action or claim as such
expenses are incurred, in each case to the extent, but only to the extent, that
such untrue statement or allegedly untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein; provided, however, that the liability of
each Selling Stockholder pursuant to this subsection 8(b) shall not exceed the
product of the number of Shares sold by such Selling Stockholder and the initial
public offering price of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder, as the case may be, against any losses, claims, damages or
liabilities to which the Company or such Selling Stockholder, as the case may
be, may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx
& Co. expressly for use therein; and will reimburse the Company and each Selling
Stockholder, as the case may be, for any reasonable legal or other expenses
reasonably incurred by the Company and each Selling Stockholder, as the case may
be, in connection with investigating or defending any such action or claim as
such expenses are incurred.
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(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by such indemnifying party(s) on the one hand and the indemnified
party(s) on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of such indemnified party on the one hand and such indemnified party on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by each of the Company, each Selling Stockholder and each Underwriter shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to the Shares purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, a Selling
Stockholder or an Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Each of the Company, each Selling Stockholder and each Underwriter
agrees that it would not be just and
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equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any reasonable 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 subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and each Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and such
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of, and to each person, if any, who controls the Company or
any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then the Company and the Selling Stockholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of
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Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., Xxx Xxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile (212)
902-3000, Attention: Registration Department; if to any Selling
19
20
Stockholder shall be delivered or sent by mail, telex or facsimile transmission
to counsel for such Selling Stockholder at its address set forth in Schedule II
hereto; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary, with a copy to Xxxxxx X. Xxxxxxx,
Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, XX 00000, facsimile
(000) 000-0000; provided, however, that any notice to an Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Stockholders by you upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us eight counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he or she has been duly
appointed as Attorney-in-Fact by such Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-Fact to
take such action.
[Signature Pages Follow]
20
21
Very truly yours,
Orion Power Holdings, Inc.
By:
-----------------------------------------
Name: W. Xxxxxxxx Xxxxxx
Title: Executive Vice President
Underwriting Agreement Signature Page
22
Very truly yours,
Constellation Enterprises, Inc.
By:
-----------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of each
of the Selling Stockholders named in
Schedule II to this Agreement
Underwriting Agreement Signature Page
23
Very truly yours,
DGC Nevada Development, Inc.
By:
-----------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of each
of the Selling Stockholders named in
Schedule II to this Agreement
Underwriting Agreement Signature Page
24
Very truly yours,
Mitsubishi International Corporation
By:
-----------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of each
of the Selling Stockholders named in
Schedule II to this Agreement
Underwriting Agreement Signature Page
25
Very truly yours,
Tokyo Electric Power Company
International B.V.
By:
-----------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of each
of the Selling Stockholders named in
Schedule II to this Agreement
Underwriting Agreement Signature Page
26
Very truly yours,
Xxxxxxxx X. Xxxxxxx
By:
-----------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of each
of the Selling Stockholders named in
Schedule II to this Agreement
Underwriting Agreement Signature Page
27
Accepted as of the date hereof at New York, New York:
Xxxxxxx, Xxxxx & Co.
By:
-----------------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
Underwriting Agreement Signature Page
28
SCHEDULE I
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES TO MAXIMUM OPTION
UNDERWRITER BE PURCHASED EXERCISED
--------------- --------------
Xxxxxxx, Xxxxx & Co. [ ] [ ]
Credit Suisse First Boston Corporation [ ] [ ]
Banc of America Securities LLC [ ] [ ]
CIBC World Markets Corp. [ ] [ ]
Deutsche Banc Alex. Xxxxx Inc. [ ] [ ]
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated [ ] [ ]
[ ] [ ]
---------- ---------
Total ................................. 13,000,000 1,950,000
========== =========
Schedule I
29
SCHEDULE II
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER SOLD IF
OF FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
-------------- --------------
The Company.................................. 10,387,077 1,950,000
The Selling Stockholders (a):
Constellation Enterprises, Inc. (b).... 1,000,000 0
DGC Nevada Development, Inc. (c)....... 735,484 0
Mitsubishi International Corporation (c) 38,710 0
Tokyo Electric Power Company
International B.V. (c).............. 516,129 0
Xxxxxxxx X. Xxxxxxx (d)................ 322,600 0
---------- ---------
Total ....................................... 13,000,000 1,950,000
========== =========
(a) The Selling Stockholders have appointed Xxxx X. Xxxxx, Xxxxx X.
Xxxx, W. Xxxxxxxx Xxxxxx and Xxxxx Xxxxxx as Attorneys-in-Fact.
(b) This Selling Stockholder is represented by Xxxxx X. Xxxx, 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000.
(c) This Selling Stockholder is represented by Xxxxxx, Xxxxx & Bockius
LLP, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000.
(d) This Selling Stockholder is represented by Stroock & Stroock &
Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
Schedule II
30
SCHEDULE III
STOCKHOLDERS SUBJECT TO SECTION 7(k) RESTRICTIONS
GS Capital Partners II, L.P.
GS Capital Partners II Offshore, L.P.
GS Capital Partners II Germany, C.L.P.
Stone Street Fund 0000, X.X.
Xxxxxx Xxxxxx Fund 1998, L.P.
GS Capital Partners III, L.P.
GS Capital Partners III Offshore, L.P.
GS Capital Partners III Germany, C.L.P.
Stone Street Fund 2000, L.P.
Bridge Special Opportunities Fund 2000, L.P.
Constellation Enterprises, Inc.
DGC Nevada Development, Inc.
Diamond Cayman, Inc.
Mitsubishi International Corporation
Tokyo Electric Power Company International B.V.
Xxxx X. Xxxxx
Xxxxx X. Xxxx
W. Xxxxxxxx Xxxxxx
E. Xxxxxx Xxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Schedule III
31
ANNEX I
FORM OF XXXXXX & XXXXXXX OPINION
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representatives of the
Several Underwriters
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Orion Power Holdings, Inc.
Ladies and Gentlemen:
We have acted as your special counsel in connection with the sale to you
and the other Underwriters on the date hereof by Orion Power Holdings, Inc., a
Delaware corporation (the "Company"), and the Selling Stockholders (as defined
below) of 14,950,000 shares (the "Shares") of common stock of the Company, par
value $0.01 per share (the "Common Stock"), pursuant to a registration statement
on Form S-1 under the Securities Act of 1933, as amended (the "Act"), filed with
the Securities and Exchange Commission (the "Commission") on May 11, 2001 (File
No. 333-60796), covering 14,950,000 shares of Common Stock, as amended on May
18, 2001 (collectively, the "Registration Statement"), a Prospectus dated May
[__], 2001 filed with the Commission pursuant to Rule 424(b) under the Act (the
"Prospectus"), an underwriting agreement dated May [__], 2001 among you as
Representatives of the several Underwriters named in Schedule I to the
underwriting agreement, the selling stockholders named in Schedule II to the
underwriting agreement (the "Selling Stockholders") and the Company (the
"Underwriting Agreement"). This opinion is being rendered to you pursuant to
Section 7(a) of the Underwriting Agreement.
As such counsel, we have made such legal and factual examinations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies. As to facts material to the opinions, statements and assumptions
expressed herein, we have, with your consent, relied upon oral or written
statements and representations of officers and other representatives of the
Company and others. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction only of
the federal laws of the United States, the internal laws of the State of New
York and the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the
I-1
32
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws, or as to any matters
of municipal law or the laws of any local agencies within any state.
Whenever a statement herein is qualified by "to the best of our knowledge"
or a similar phrase, it is intended to indicate that those attorneys in this
firm who have rendered legal services in connection with the above transaction
do not have current actual knowledge of the inaccuracy of such statement.
However, except as otherwise expressly indicated, we have not undertaken any
independent investigation to determine the accuracy of any such statement, and
no inference that we have any knowledge of any matters pertaining to such
statement should be drawn from our representation of you.
Capitalized terms used herein without definition have the meanings
assigned to them in the Underwriting Agreement.
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of Delaware.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The Shares to be issued and sold by the Company pursuant to the
Underwriting Agreement have been duly authorized and, when issued to and paid
for by you and the other Underwriters in accordance with the terms of the
Underwriting Agreement will be validly issued, fully paid and non-assessable
and, to the best of our knowledge, free of preemptive rights; the Shares to be
sold by the Selling Stockholders pursuant to the Underwriting Agreement have
been duly authorized and validly issued and are fully paid and non-assessable.
4. The statements set forth in the Prospectus under the heading
"Underwriting", insofar as such statements constitute a summary of legal
matters, are accurate in all material respects.
5. The Registration Statement has become effective under the Act and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no proceedings therefor
have been initiated by the Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) under the Act has been made in accordance with Rules
424(b) and 430A under the Act.
6. The Registration Statement and the Prospectus comply as to form in all
material respects with the requirements for registration statements on Form S-1
under the Act and the rules and regulations of the Commission thereunder; it
being understood, however, that we express no opinion with respect to the
financial statements, schedules or other financial data included in, or omitted
from, the Registration Statement or the Prospectus. In passing upon the
compliance as to form of the Registration Statement and the Prospectus, we have
assumed that the statements made therein are correct and complete.
I-2
33
In addition, we have participated in conferences with officers and other
representatives of the Company, counsel to the Company, representatives of the
independent public accountants for the Company and your representatives, at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although we are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus and have not made any
independent check or verification thereof, during the course of such
participation, no facts came to our attention that caused us to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, schedules or
other financial data included in, or omitted from, the Registration Statement or
the Prospectus.
This opinion is rendered only to you as Representatives of the several
Underwriters under the Underwriting Agreement and is solely for the benefit of
the Underwriters in connection with the transactions covered hereby. This
opinion may not be relied upon by you for any other purpose, or furnished to,
quoted to, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
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34
ANNEX II
FORM OF STROOCK & STROOCK & XXXXX LLP OPINION
June [__], 2001
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several Underwriters
named in Schedule I to the Underwriting Agreement
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel to Orion Power Holdings, Inc., a Delaware
corporation (the "Company"), in connection with (i) the Company's Registration
Statement on Form S-1 (Registration No. 333-60796), as amended by Amendments No.
1, 2, __ and __ (the "Registration Statement"), filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), and (ii) the sale by the Company and certain
selling stockholders of up to an aggregate of 14,950,000 shares of common stock,
par value $.01 per share (the "Stock"), pursuant to the Underwriting Agreement,
dated as of May [__], 2001 (the "Underwriting Agreement"), by and among the
Company, the selling stockholders named in Schedule II thereto (the "Selling
Stockholders") and you, as representatives of the several Underwriters named in
Schedule I thereto (the "Underwriters").
We are rendering this opinion to you pursuant to Section 7(b) of the
Underwriting Agreement. Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Underwriting Agreement.
We have examined copies of each of (i) the Underwriting Agreement, (ii)
the Registration Statement and the exhibits thereto, (iii) the Company's
Prospectus relating to the Stock being offered dated May [__], 2001 (the
"Prospectus") and (iv) the Certificate of Incorporation (the "Certificate of
Incorporation") and Bylaws (the "Bylaws") of the Company, as in effect on the
date hereof. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records of the Company, and
such documents, records,
II-1
35
agreements, instruments and certificates of officers and representatives of the
Company and others, and have made such examinations of law, as we have deemed
necessary to form the basis of the opinions hereinafter expressed. In such
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity to
originals of all documents submitted to us as copies thereof. As to various
questions of fact material to the opinions expressed below, we have relied upon
(i) the representations and warranties of the Company contained in the
Underwriting Agreement or made pursuant thereto or in connection with the
closing thereunder and (ii) statements by and certificates of officers and
representatives of the Company and others.
Attorneys involved in the preparation of this opinion are admitted to
practice law in the State of New York and we do not purport to express any
opinion herein concerning any law other than the laws of the State of New York,
the federal laws of the United States of America (except for FERC and FPA
matters as to which we do not express any opinions), the General Corporation Law
of the State of Delaware and the Delaware Revised Uniform Limited Partnership
Act.
For purposes of this letter, we have assumed that the Underwriting
Agreement is a valid and binding obligation of each of you and the other
Underwriters and is enforceable against each of you and the other Underwriters
in accordance with its terms.
When reference is made in this opinion to "our knowledge" or to what is
"known to us," it means, unless otherwise indicated, the actual knowledge
attributable to our representation of the Company of only those partners and
associates who have given substantive attention to the Underwriting Agreement,
the Registration Statement, the Prospectus and the sale of the Shares.
With respect to our opinion expressed in paragraphs 1, 3 and 4 below
relating to the good standing and valid existence of each of the Company and its
subsidiaries, we have relied, with your permission, solely upon good standing
certificates of public officials or upon confirmation via facsimile of good
standing as an existing corporation or partnership from such public officials,
copies of which are being delivered concurrently herewith.
With reference to our opinion in paragraphs 7 and 8 below, our opinion is
limited to (i) review of only those laws and regulation that, in our experience,
are normally applicable to transactions of the type contemplated by the
Underwriting Agreement, and (ii) does not include, and we express no opinion as
to the application of, any federal (including the FERC and FPA) or state laws or
regulations regarding the generation, transmission, marketing or sale of
electricity or the ownership or operation of power plants. In addition, we
express no opinion as to the statutes and ordinances, administrative decisions
and rules and regulations of counties, towns, municipalities and special
political subdivisions, or judicial decisions to the extent they deal therewith.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business
as described in the Prospectus.
2. The Company has an authorized capitalization as set forth in the Prospectus,
and all of the issued shares of capital stock of the Company (including the
Shares being delivered on the date hereof) have been duly and validly
authorized and issued and are fully paid and non-
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36
assessable; and the Shares conform to the description of the Stock contained
in the Prospectus.
3. The Company and its subsidiaries listed on Schedule (3) have been duly
qualified as a foreign corporation or limited partnership, as the case may
be, for the transaction of business and are in good standing under the laws
of the jurisdictions set forth on Schedule (3).
4. Each subsidiary of the Company listed on Schedule (3) is validly existing as
a corporation, limited liability company or limited partnership, as the case
may be, in good standing under the laws of its jurisdiction of incorporation
or organization with corporate or partnership power and authority to own its
properties and conduct its business as described in the Prospectus.
5. To our knowledge and other than as set forth in the 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, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to our knowledge, no such proceedings are
threatened by governmental authorities or threatened by others against the
Company or any of its subsidiaries.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
7. The issue and sale of the Stock and the compliance by the Company with all of
the provisions of the Underwriting Agreement and the consummation of the
transactions therein contemplated will not conflict with or result in a
material breach or violation of any of the terms or provisions of, or
constitute a default under the agreements listed on Exhibit 4.1 through
Exhibit 4.5 or Exhibit 10.1 through Exhibit 10.33 to the Registration
Statement, which have been identified to us in an officer's certificate as
being all of the agreements that are material to the Company and its
subsidiaries taken as a whole, nor will such actions result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company, or the Delaware General Corporation Law or any federal or New York
statute, 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. We express no opinion with respect to any such conflict,
breach, violation or default not readily ascertainable from the face of any
such agreement, or arising under or based upon any cross-default provisions
insofar as it relates to a default under an agreement not identified to us,
or arising under or based upon any covenant of a financial or numerical
nature or requiring computation.
8. No consent, approval, authorization, order, registration, filing or
qualification of or with any such court or governmental agency or body is
required under federal or New York law or the Delaware General Corporation
Law for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by the Underwriting Agreement, except as
such have been obtained, the registration under the Act of the Stock, and
such consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Stock by the Underwriters.
9. The statements set forth in the Prospectus under the caption "Description of
Capital Stock" insofar as they purport to constitute a summary of certain of
the terms of the Stock, and under the captions "Risk Factors-We have agreed
to provide all of the energy required by
II-3
37
Duquesne Light Company to satisfy its provider of last resort obligation,
which could result in significant losses to us," "Business" (other than the
subheading "Regulation") "Certain Relationships and Related Party
Transactions," "Description of Indebtedness," "Certain Relationships and
Related Party Transactions," and "Underwriting" insofar as they purport to
describe the provisions of the laws and documents referred to therein
accurately and fairly summarize such terms and such provisions,
respectively, in all material respects.
10. The Company is not subject to registration as an "investment company,"
as such term is defined in the Investment Company Act.
11. The Registration Statement has become effective under the Act and the
Prospectus was filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Act and, to our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued or
proceeding for that purpose has been instituted or threatened by the
Commission.
12. To our knowledge, there are no contracts or documents of a character
required by the Act or the rules and regulations thereunder to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement which are not described or filed as required
by the Act or the rules and regulations thereunder.
The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the date hereof (other than
the financial statements and related schedules therein, as to which we express
no opinion) comply as to form in all material respects with the requirements of
the Act and the rules and regulations thereunder; and although we do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in paragraph 9 above, we have no reason to believe that, as of its
effective date, the Registration Statement or any further amendment thereto made
by the Company prior to the date hereof (other than the financial statements and
related schedules therein, as to which we express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, not misleading
or that, as of its date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to the date hereof (other than the financial
statements and related schedules therein, as to which we express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of the date hereof,
either the Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the date hereof (other than the
financial statements and related schedules therein, as to which we express no
opinion) contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
This opinion is furnished solely for your benefit and may not be used or
relied upon by any other person without our express written consent.
Very truly yours,
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38
SCHEDULE (3)
NAME OF ENTITY: JURISDICTIONS IN WHICH QUALIFIED AND
IN GOOD STANDING:
1. Orion Power Holdings, Inc. Maryland
2. Orion Power New York, L.P. New York
3. Orion Power Midwest, L.P. Pennsylvania
4. Liberty Electronic Power, LLC
Schedule (I)(ii)
39
ANNEX III
XXXXXXXX & XXXXX OPINION
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We are issuing this opinion letter as special energy regulatory counsel to
Orion Power Holdings, Inc., a Delaware corporation (the "Company"), in
connection with the issuance and sale by the Company of an aggregate of
14,950,000 shares of Common Stock, par value $.01 per share (the "Stock"),
pursuant to the Underwriting Agreement, dated as of May [__], 2001 (the
"Underwriting Agreement"), between the Company and the Underwriters named in
Schedule I thereto (the "Underwriters"). This opinion is being delivered to you
pursuant to Section 7(c) of the Underwriting Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Underwriting Agreement, provided that
references to any document means documents in the form executed and delivered as
of the date hereof.
The following is based exclusively on specific federal, New York,
Pennsylvania and Ohio energy regulatory statutes and orders, rules or
regulations regarding (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants. Subject to the
assumptions, qualifications, exclusions and other limitations which are
identified in this letter, we advise you that:
(a) The statements in the Prospectus under the captions "Risk
Factors - The rules and regulations in the various regional market
structures in which we compete are subject to change, which may impact our
ability to compete and our profitability," "Risk Factors - We are subject
to stringent governmental regulation, which may be burdensome or lead to
significant costs or liabilities," "Risk Factors -- The substantial
ownership interest in us by certain of our stockholders could hinder our
ability to obtain governmental approval for future acquisitions or enter
additional markets," "Business - Regulation- Federal Energy Regulation,"
and "Business-Regulation -- State Energy Regulation," insofar as such
statements purport to describe the laws or proceedings referred to
therein, are fair and accurate summaries of such laws and regulations and
such proceedings in all material respects. This opinion is based
exclusively on specific
XXX-0
00
xxxxxxx, Xxx Xxxx, Xxxxxxxxxxxx and Ohio energy regulatory statutes and
orders, rules or regulations regarding (a) the generation, transmission,
marketing or sale of electricity or (b) the ownership or operation of
power plants.
(b) To our knowledge, except as set forth in the Prospectus, neither
the Company nor any of its subsidiaries is (i) subject to regulation as a
"holding company" or a "subsidiary company" of a holding company or an
"affiliate" of a subsidiary or holding company or a "public utility
company" under Section 2(a) of the Public Utility Holding Company Act of
1935, (ii) subject to regulation under the Federal Power Act of 1920, as
amended, other than as contemplated by 18 C.F.R. Section 292.601(c) and
other than due to its subsidiaries' status as power marketers and owners
of certain electric transmission facilities subject to the Federal Power
Act, and its subsidiaries have all exemptions and waivers from regulation
as typically granted by FERC to power marketers or entities with market
based authority affiliated with utilities, or (iii) subject to any state
law or regulation with respect to the rates or financial or organizational
regulation of electric utilities, other than due to its subsidiaries'
status as "electric corporations" under New York law subject to lightened
regulation. This opinion is based exclusively on specific federal, New
York, Pennsylvania and Ohio energy regulatory statutes and orders, rules
or regulations regarding (a) the generation, transmission, marketing or
sale of electricity or (b) the ownership or operation of power plants.
(c) The issue and sale of the Stock and the compliance by the
Company with all of the provisions of the Underwriting Agreement and the
consummation of the transactions contemplated therein will not 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. This opinion is based
exclusively on specific federal, New York, Pennsylvania and Ohio energy
regulatory statutes and orders, rules or regulations regarding (a) the
generation, transmission, marketing or sale of electricity or (b) the
ownership or operation of power plants.
(e) No consent, approval, authorization, order, or registration of
or with any court or governmental agency or body is required for the issue
and sale of the Stock or the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, except for
consents, approvals, authorizations, orders, or regulations associated
with the issue and sale of the Stock, which have been obtained. This
opinion is based exclusively on specific federal, New York, Pennsylvania
and Ohio energy regulatory statutes and orders, rules or regulations
regarding (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants.
For purposes of this opinion letter, we have relied, without
investigation, upon each of the following assumptions: (i) Each document
submitted to us for review is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; (ii)
there are no agreements or understandings among the parties, written or oral,
and there is no usage of trade or course of prior dealing among the parties that
would, in either case, define, supplement or qualify the terms of the
Underwriting Agreement; (iii) the constitutionality or validity of a relevant
statute, rule, regulation or agency action is not in issue; (iv) all parties to
the Underwriting Agreement will act in accordance with, and will refrain from
taking any action that
III-2
41
is forbidden by, the terms and conditions of the Underwriting Agreement; (v) all
agreements other than the Underwriting Agreement (if any) with respect to which
we have provided advice in our letter or reviewed in connection with our letter
would be enforced as written; (vi) the Company and its subsidiaries will not in
the future take any discretionary action (including a decision not to act)
permitted under the Underwriting Agreement that would result in a violation of
law or constitute a breach or default under any other agreements or court orders
to which the Company or its subsidiaries may be subject; (vii) except for those
governmental and regulatory approvals that we have specifically opined upon
herein, the Company and its subsidiaries have obtained (and will in the future
obtain) all permits and governmental approvals required, and have taken (and
will in the future take) all actions required, relevant to the consummation of
the transactions or performance of the Underwriting Agreement; and (viii) each
person who has taken any action relevant to any of our opinions in the capacity
of director or officer was duly elected to that director or officer position and
held that position when such action was taken. In addition, we have relied
without any independent verification upon: (i) information contained in
certificates and approvals obtained from governmental authorities; (ii) factual
information contained in applications to governmental authorities, the
Underwriting Agreement; and (iii) factual information we have obtained from such
other sources as we have deemed reasonable. We have assumed without
investigation that there has been no relevant change or development between the
dates as of which the information cited in the preceding sentence was given and
the date of this letter and that the information upon which we have relied is
accurate and does not omit disclosures necessary to prevent such information
from being misleading. For purposes of each opinion, we have relied upon
decisions issued by governmental authorities in each relevant jurisdiction, and
such opinion is not intended to provide any conclusion or assurance beyond that
conveyed by that decision.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based or to obtain information about which
this letter advises you, we confirm that we do not have any actual knowledge
which has caused us to conclude that our reliance and assumptions cited in the
preceding paragraph are unwarranted or that any information supplied in this
letter is wrong. The term "knowledge" whenever it is used in this letter with
respect to our firm means conscious awareness at the time this letter is
delivered on the date it bears by the following Xxxxxxxx & Xxxxx lawyers who
have reviewed the Underwriting Agreement (herein called "our Designated
Transaction Lawyer"): Xxxxxxxx X. Xxxxx.
Our advice on every legal issue addressed in this letter is based
exclusively on the specific federal or New York, Pennsylvania and Ohio energy
regulatory statutes and orders, rules or regulations regarding (a) the
generation, transmission, marketing or sale of electricity or (b) the ownership
or operation of power plants. We advise you that issues addressed by this letter
may be governed in whole or in part by other laws, but we express no opinion as
to whether any relevant difference exists between the laws upon which our
opinions are based and any other laws which may actually govern. We also advice
you that we are members of the bars of the District of Columbia and New York
State and are not members of the bars of Pennsylvania or Ohio. We are not
providing this opinion letter except in our capacity as special energy
regulatory legal counsel to the Company on issues relating to the Federal Energy
Regulatory Commission ("FERC"), the New York Public Service Commission
("NYPSC"), the Pennsylvania Public Utilities Commission ("PPUC") and the Public
Utilities Commission of Ohio ("PUCO") and offer no opinions on environmental or
other matters relating to (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants, whether or not
addressed in the Prospectus or the Underwriting Agreement.
III-3
42
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
You may rely upon this letter only for the purpose served by the
provisions in the Underwriting Agreement cited in the initial paragraph of this
letter in response to which it has been delivered. Without our written consent:
(i) no person other than you may rely on this letter for any purpose; (ii) this
letter may not be cited or quoted in any financial statement, prospectus,
private placement memorandum or other similar document; (iii) this letter may
not be cited or quoted in any other document or communication which might
encourage reliance upon this letter by any person or for any purpose excluded by
the restrictions in this paragraph; and (iv) except as required by law, copies
of this letter may not be furnished to anyone (except to the Underwriters) for
purposes of encouraging such reliance; provided that any Person who becomes an
Underwriter on or after the date hereof may rely on this opinion as if it were
addressed to such Person on and as of the Time of Delivery, subject to the
limitations contained in this paragraph.
Sincerely,
-------------------------------
III-4
43
ANNEX IV
FORM OF XXXXXX XXXX & PRIEST LLP OPINION
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This firm has acted as special environmental counsel to Orion Power
Holdings, Inc., a Delaware corporation (the "Company") on certain limited
matters with regard to the issuance and sale by the Company of Common Stock, par
value $.01 per share (the "Stock") pursuant to the Underwriting Agreement, dated
as of May [__], 2001 (the "Underwriting Agreement") between the Company and the
Underwriters named in Schedule I thereto (the "Underwriters"). This opinion is
being delivered to you pursuant to Section 7(d) of the Underwriting Agreement.
In our review, we have assumed the accuracy and completeness of all statements
of fact relating to the Company and its operations and products and have made no
independent investigation for purposes of rendering this opinion. This opinion
relates solely to matters of environmental law.
We are licensed and authorized to practice law under the laws of the
United States and the states of New York and California. This opinion relates
solely to environmental laws and legal documents or proceedings promulgated
under the laws of the United States and the state of New York and we do not
offer any opinions regarding laws or legal proceedings outside those
jurisdictions.
We express no opinion regarding the requirements, status or need for FERC
certification or compliance with FERC's guidelines, rules or regulations.
Based on and subject to the foregoing, we are of the opinion that the
statements in the Prospectus under the captions "Risk Factors - The costs of
compliance with existing and future environmental regulations could adversely
affect our cash flow and profitability" and "Risk Factors - We are subject to
stringent governmental regulation, which may be burdensome or lead to
significant costs or liabilities" and [under the caption]
"Business-Regulation-Environmental Regulation," solely insofar as such
statements purport to describe the laws or legal documents or legal proceedings
referred to therein, are fair and accurate summaries of such laws and
regulations and such legal documents and proceedings in all material respects.
This opinion speaks only as of the date hereof and not to any prior or
subsequent date, and we assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion. This opinion has been
prepared solely for your use in connection with the offering of the securities
and may not be used, quoted or otherwise referred to or relied upon by any
person or entity without the prior written consent of this firm.
IV-1
44
Very truly yours,
XXXXXX XXXX & PRIEST LLP
-------------------------------
45
ANNEX V
________________, 2001
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several Underwriters named in
Schedule I to the Underwriting Agreement
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
I am General Counsel of [__________], a [__________] corporation
("[_____]"). I and lawyers assisting me have acted as counsel to [_____], in
connection with the sale by [_____] of an aggregate of [__________] shares of
common stock, par value $.01 per share of Orion Power Holdings, Inc. (the
"Stock"), pursuant to the Underwriting Agreement, dated as of May [__], 2001
(the "Underwriting Agreement"), by and among Orion Power Holdings, Inc., the
selling stockholders named in Schedule II thereto including [_____] (the
"Selling Stockholders") and you, as representatives of the several Underwriters
named in Schedule I thereto (the "Underwriters).
We are rendering this opinion to you pursuant to Section 7(e) of the
Underwriting Agreement. Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Underwriting Agreement.
We have examined copies of each of (i) the Underwriting Agreement, (ii)
the Registration Statement and exhibits thereto, (iii) Orion Power Holding,
Inc.'s Prospectus, [and (vi) the Articles of Incorporation (the "Articles of
Incorporation") and Bylaws (the "Bylaws") of [_____], as in effect on the date
hereof]. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records of [_____], and such
documents, records, agreements, instruments and certificates of officers and
representatives of [_____] and others, and have made such examinations of law,
as we have deemed necessary to form the basis of the opinion hereinafter
expressed. In such examinations, we have assumed the genuineness of all
signatures of parties other than [_____], the authenticity of all documents
submitted to us as originals and the conformity to originals of all documents
submitted to us as copies thereof, in each case as submitted by any person other
than [_____]. As to various questions of fact material to the opinions expressed
below, we have relied upon (i) the representations and warranties of [_____]
contained in the Underwriting Agreement or made pursuant thereto or in
connection with the closing thereunder and (ii) statements by and certificates
of officers and representatives of [_____] and others. In particular, in
rendering
V-1
46
subparagraph (v) we have relied upon a certificate of [_____] in respect of
matters of fact as to ownership of, and liens, encumbrances, equities or claims
on the Shares sold by [_____] which we believe that we are justified in relying
upon.
For purposes of this letter, we have assumed that the Underwriting
Agreement is a valid and binding obligation of each of you, the other
Underwriters and Orion Power Holdings, Inc. and is enforceable against each of
you, Orion Power Holdings, Inc. and the other Underwriters in accordance with
its terms.
When reference is made in this opinion to "our knowledge" or to what is
"known to us," it means, unless otherwise indicated, the actual knowledge
attributable to my representation of [_____] and that of in-house attorneys who
have given substantive attention to the Underwriting Agreement and the sale of
the Shares in coordination with me.
Based on the foregoing, we are of the opinion that:
(i) [[_____] has been duly incorporated and is validly existing and in
good standing under the laws of the State of [__________].]
(ii) A Power of Attorney and a Custody Agreement have been duly executed
and delivered by [____________] and constitute valid and binding
agreements of [___________] in accordance with their terms;
(iii) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of [_____] and the sale of the Shares to
be sold by [_____] thereunder and the compliance by [_____] with all
of the provisions of the Underwriting Agreement, the Power of
Attorney and the Custody Agreement and the consummation of the
transactions therein contemplated will not conflict with or result
in any breach or violation of any terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to
us to which [_____] is a party or by which [_____] is bound, or to
which any of the property or assets of [_____] is subject, nor will
such action result in any violation of the provisions of the
Articles of Incorporation or By-laws of [_____], or any order, rule
or regulation known to us of any court or governmental agency or
body having jurisdiction over [_____] or the property of [_____];
(iv) No consent, approval, authorization or order of any court or
governmental agency or body is required under federal or Maryland
law for the sale of [_____]'s Shares contemplated by the
Underwriting Agreement. We express no opinion regarding any approval
(a) of the FERC under the Federal Power Act with respect to the
transactions contemplated by the Underwriting Agreement or (b)
required under the Act, state securities laws or Blue Sky Laws;
(v) Immediately prior to the First Time of Delivery [_____] had good and
valid title to the Shares to be sold at the First Time of Delivery
by [_____] under the Underwriting Agreement, free and clear of all
liens, encumbrances, equities or claims, and full right power and
authority to sell, assign, transfer and deliver the Shares to be
sold by [_____] under the Underwriting Agreement; and
V-2
47
(vi) Good and valid title to [_____]'s Shares, free and clear of all
liens, encumbrances, equities or claims, has been transferred to
each of the several Underwriters, as the case may be, who have
purchased such Shares in good faith and without notice of any such
lien, encumbrance, equity or claim or any other adverse claim within
the meaning of the Uniform Commercial Code.
This opinion is limited to the law of the State of [__________] (without
regard to the application of any principles of conflict of laws) and the Federal
law of the United States, all as in effect as of the date hereof.
The opinions in this letter are being furnished to you for your benefit
and may not be relied upon by any other Person.
Very truly yours,
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48
ANNEX V
(for DGC Nevada Development and Tepco)
________________, 2001
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several underwriters
named in Schedule I to the Underwriting Agreement
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel to DGC Nevada Development, Inc., a Nevada
corporation ("DGC") and Tokyo Electric Power Company International B.V., a
Netherlands corporation ("Tepco") (DGC and Tepco referred to herein as the
"Selling Stockholders") in connection with the transactions contemplated by the
Underwriting Agreement dated May __, 2001 (the "Agreement") between you, Orion
Power Holdings, Inc., a Delaware corporation (the "Issuer"), the Selling
Stockholders and the other stockholders of the Issuer named in Schedule II to
the Agreement (the "Other Stockholders"), in connection with the issuance and
sale to you by the Issuer of 10,387,077 shares of the Issuer's Common Stock, par
value $.01 per share (the "Common Stock"), the sale to you by the Selling
Stockholders of an aggregate of 1,251,613 shares of Common Stock (these
1,251,613 shares, the "Shares") and the sale to you by certain of the Other
Stockholders of an aggregate of 1,361,310 shares (the "Other Stockholder
Shares"). This opinion is being delivered to you pursuant to Section 7(e) of the
Agreement. All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Agreement.
In rendering the opinions expressed below, we have examined copies of the
following documents:
(i) the Agreement;
(ii) the Articles of Incorporation and Bylaws of DGC;
(iii) Certificate of Good Standing of DGC; and
(iv) resolutions of the Board of Directors of DGC.
V-1
49
We have also examined the registration statement of the Issuer on Form S-1
(Registration No. 333-60796) which was filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act") on May 11, 2001, for the purpose of registering the offering of the
Shares, the Issuer Shares and the Other Stockholder Shares, Amendment No. 1
thereto filed with the Commission on May 18, 2001, and the final prospectus
relating to the Shares in the form filed with the Commission on June __, 2001
pursuant to Rule 424(b) of the General Rules and Regulations under the Act.
In such examinations, we have assumed the genuineness of all signatures, the
authenticity of documents submitted to us as originals, the conformity with the
original documents of all documents submitted to us as copies and the
authenticity of the originals of such latter documents. We have relied upon the
representations and warranties as to factual matters made in or pursuant to the
Agreement, upon certificates of government officials and upon certificates of
the respective Selling Stockholders and their officers.
In rendering the opinions in subparagraphs (a), (c) and (d) hereof with respect
to Tepco, we have expressly relied upon the legal opinion, dated the date
hereof, rendered by Xxxxx & XxXxxxxx, Dutch counsel to Tepco and delivered in
connection with this transaction, a copy of which is attached hereto as Schedule
A, to the effect that (A) Tepco is duly incorporated and validly existing as a
corporation in good standing under the laws of the Netherlands; (B) the
Agreement has been duly authorized, executed and delivered by Tepco and the sale
of the Shares by Tepco, the compliance by Tepco with the provisions of the
Agreement and the consummation of the transactions contemplated therein will not
conflict with or result in a breach or violation of any terms or provisions of,
or constitute a default under, (i) any agreement or instrument by which Tepco is
bound, (ii) the [Articles of Incorporation or Bylaws] of Tepco, or (iii) any
order, rule or regulation of any court or governmental entity having
jurisdiction over Tepco or its property; and (C) no consent, approval,
authorization or order of any court or governmental agency is required under
Dutch law for the sale of the Tepco's Shares.
Based upon and subject to the foregoing and subject also to the comments and
qualifications set forth below, and having considered such questions of law as
we deemed necessary as a basis for the opinions expressed below, we are of the
opinion that:
(a) each of DGC and Tepco has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation;
(b) a Power of Attorney and a Custody Agreement have been duly executed
and delivered by each of DGC and Tepco and constitute valid and binding
agreements of each of DGC and Tepco in accordance with their terms;
(c) the Agreement has been duly authorized, executed and delivered by or
on behalf of each of DGC and Tepco, and the sale of the Shares thereunder by
each of DGC and Tepco and the compliance by each of DGC and Tepco with all of
the provisions of the Agreement, the Power of Attorney and the Custody Agreement
and the consummation of the transactions therein contemplated will not, to our
knowledge, conflict with or result in any breach or violation of any terms or
provisions of, or constitute a default under, any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument by which DGC or
Tepco is bound, or to which any of the property or assets of DGC or Tepco is
subject, nor will such action result in any violation of the provisions of the
Articles of Incorporation or Bylaws of DGC or
V-2
50
Tepco, or, to our knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over DGC or Tepco or the
property of DGC or Tepco;
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required under (i) federal or Nevada law for the
sale of DGC's Shares or (ii) under federal or Dutch law for the sale of Tepco's
Shares, as contemplated in the Agreement. We express no opinion regarding any
approval (i) of the FERC under the Federal Power Act with respect to the
transactions contemplated by the Agreement or (ii) required under the Act, state
securities laws or Blue Sky Laws; and
(e) Upon payment pursuant to the Agreement for the Shares to be sold by
the Selling Stockholders pursuant thereto, delivery of such Shares, as directed
by the Underwriters, to Cede & Co. ("Cede") or such other nominee as may be
designated by Depository Trust Company ("DTC"), registration of such Shares in
the name of Cede or such other nominee as may be designated by DTC on the
Issuer's share registry in accordance with the Issuer's certificate of
incorporation, bylaws and applicable law and as required by Section 8-401 of the
Uniform Commercial Code as in effect in the State of New York ("UCC") and an
indication from DTC by book entry that in the case of each Underwriter the
Shares being purchased by or on behalf of such Underwriter have been credited to
"securities accounts" (as defined in Section 8-501 of the UCC) of such
Underwriter with DTC assuming that neither DTC nor any such Underwriter has
notice of any adverse claim (as such phrase is defined in Section 8-105 of the
UCC) to such shares): (A) DTC shall be a "protected purchaser" of such Shares
within the meaning of Section 8-303 of the UCC, and (B) under Section 8-501 of
the UCC, each Underwriter will acquire a valid "security entitlement" (as
defined in Section 8-102 of the UCC) to the Shares being so purchased by or on
behalf of such Underwriter, and, to the extent governed by the UCC, no action
based on any "adverse claim" (as defined in Section 8-102 of the UCC) to such
Shares (or security entitlement with respect thereto) may properly be asserted
against such Underwriter with respect to such security entitlement; it being
understood that for the purpose of this opinion, we have assumed without
independent verification, that the UCC is the law applicable to the sale of the
Shares and that when such payment, delivery, registration and crediting occur,
(x) Cede or such other nominee is not a "security intermediary" (as defined in
Section 8-102 of the UCC), (y) registration of such Shares in the name of Cede
or another nominee designated by DTC is effective to register such Shares in the
name of DTC for purposes of Section 8-106 (b) (2) of the UCC and (z) DTC is a
"clearing corporation" (as defined in Section 8-102 of the UCC).
We express no opinion as to matters of law other than the law of the State of
New York, Title 7 of the Nevada Revised Statutes, and the federal law of the
United States.
This opinion is furnished by us to you at the request of the Selling
Stockholders, is solely for your benefit and may not be relied upon by any other
person or for any purpose other than in connection with the transaction
contemplated by the Agreement without our prior written consent in each
instance. We disclaim any obligation to update this opinion letter for events
occurring after the date of this opinion.
Very truly yours,
V-3
51
ANNEX VI
FORM OF XXXXXX XXXXXXXX LLP COMFORT LETTER
[IN FORM AND SUBSTANCE PREVIOUSLY AGREED TO BY THE UNDERWRITERS' COUNSEL]
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52
ANNEX VII
FORM OF STOCKHOLDERS' LOCK-UP AGREEMENT
Orion Power Holdings, Inc.
Lock-up Agreement
May __, 2001
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
CIBC World Markets Corp.
Deutsche Banc Alex. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representatives of the several Underwriters
named in Schedule I to the Common Stock
Underwriting Agreement
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Orion Power Holdings, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Xxxxxxx, Xxxxx & Co., Credit Suisse First
Boston Corporation, Banc of America Securities LLC, CIBC World Markets Corp.,
Deutsche Banc Alex. Xxxxx Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as representatives (the "Representatives"), propose to enter into
an underwriting agreement (the "Underwriting Agreement") on behalf of the
several Underwriters named in Schedule I to such agreement (collectively, the
"Underwriters") with Orion Power Holdings, Inc., a Delaware corporation (the
"Company"), providing for a public offering of up to 14,950,000 shares (the
"Shares") of common stock, $.01 par value (the "Common Stock"), of the Company
pursuant to a Registration Statement on Form S-1 filed with the Securities and
Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that during
the period beginning from the date of the final Prospectus covering the public
offering of the Shares and continuing to and including the date 90 days after
the date of such final Prospectus, the undersigned will not offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any shares of Common Stock of the Company, or any options
or warrants to purchase any shares of Common Stock of the Company, or any
securities convertible into, exchangeable for or that represent the right to
receive shares of Common Stock of the Company, whether now owned or hereinafter
acquired, owned directly by the undersigned (including holding as a custodian)
or with respect to
VII-1
53
which the undersigned has beneficial ownership within the rules and regulations
of the SEC (collectively the "Undersigned's Shares").
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Undersigned's Shares even if such Shares would be disposed of by someone
other than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to any
of the Undersigned's Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from such Shares.
Notwithstanding the foregoing, the undersigned may (a) enter into a
"written plan for trading securities" within the meaning of Rule 10b5-1(c) under
the Securities Exchange Act of 1934 providing for the undersigned's sale of his,
her or its shares of Common Stock of the Company, provided, however, that no
sale or disposition of the undersigned's shares pursuant to such "written plan
for trading securities" may occur during the aforementioned 90-day period, (b)
exercise stock options and warrants and acquire shares with respect thereto,
provided that such shares are subject to the provisions of this Lock-Up
Agreement, and (c) transfer the Undersigned's Shares (i) as a bona fide gift or
gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, or (iii) with the prior written consent of Xxxxxxx,
Xxxxx & Co. on behalf of the Underwriters. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, (i) if the undersigned is a corporation, the corporation may transfer
the capital stock of the Company to any wholly-owned subsidiary of such
corporation or (ii) if the undersigned is a wholly-owned subsidiary corporation
of another corporation ("Parent"), the capital stock of the Company may be
transferred to any other corporation which is a wholly-owned subsidiary of
Parent; provided, however, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value. The undersigned now has, and, except
as contemplated by clause (b) or (c) above, for the duration of this Lock-Up
Agreement will have, good and marketable title to the Undersigned's Shares, free
and clear of all liens, encumbrances, and claims whatsoever other than as
described in the Prospectus (as defined in the Underwriting Agreement). The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
Undersigned's Shares except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offerings. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
[signature page attached]
VII-2
54
Very truly yours,
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[Exact Name of Shareholder]
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Authorized Signature
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Title
VII-3
