Contract
EXHIBIT
1.1
5,000,000
PNM
Resources, Inc.
Common
Stock
December
6, 2006
Xxxxxx
Brothers Inc.
As
Representative of the several
Underwriters
named in Schedule 1 attached hereto,
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
PNM
Resources, Inc., a New Mexico corporation (the “Company”),
proposes to sell 5,000,000 shares (the “Firm
Stock”)
of the
Company’s common stock, no par value per share (the “Common
Stock”).
In
addition, the Company proposes to grant to the underwriters (the “Underwriters”)
named
in Schedule
1
attached
to this agreement (this “Agreement”)
an
option to purchase up to 750,000 additional shares of the Common Stock on
the
terms set forth in Section 2 (the “Option
Stock”).
The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the “Stock.”
This
is to confirm the agreement concerning the purchase of the Stock from the
Company by the Underwriters.
1. Representations,
Warranties and Agreements of the Company.
The
Company represents, warrants and agrees that:
(a) Filing
of Registration Statement and Preliminary Prospectus; No Stop
Order:
A
registration statement on Form S-3 (No. 333-136713) relating to the Stock
(i) has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the “Securities
Act”),
and
the rules and regulations (the “Rules
and Regulations”)
of the
Securities and Exchange Commission (the “Commission”)
thereunder; (ii) has been filed with the Commission under the Securities
Act; and (iii) is effective under the Securities Act. Copies of such
registration statement and any amendment thereto have been delivered by the
Company to you as the representative (the “Representative”)
of the
Underwriters. As used in this Agreement:
(i) “Applicable
Time”
means
5
p.m. (New York City time) on December 6;
(ii) “Delivery
Date”
shall
have the meaning set forth in Section 4.
(iii) “Effective
Date”
means
any date as of which any part of such registration statement relating to
the
Stock became, or is deemed to have become, effective under the Securities
Act in
accordance with the Rules and Regulations;
(iv) “Issuer
Free Writing Prospectus”
means
each “free writing prospectus” (as defined in Rule 405 of the Rules and
Regulations) prepared by or on behalf of the Company or used or referred
to by
the Company in connection with the offering of the Stock;
(v) “Preliminary
Prospectus”
means
any preliminary prospectus relating to the Stock included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of the Rules
and
Regulations, including any preliminary prospectus supplement thereto relating
to
the Stock;
(vi) “Pricing
Disclosure Package”
means,
as of the Applicable Time, the most recent Preliminary Prospectus, together
with
the information included on Schedule 3 and each Issuer Free Writing Prospectus
filed or used by the Company on or before the Applicable Time, other than
a road
show that is an Issuer Free Writing Prospectus under Rule 433 of the Rules
and
Regulations;
(vii) “Prospectus”
means
the final prospectus relating to the Stock, including any prospectus supplement
thereto relating to the Stock, as filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations; and
(viii) “Registration
Statement”
means,
collectively, the various parts of such registration statement, each as amended
as of the Effective Date for such part, including any Preliminary Prospectus
or
the Prospectus and all exhibits to such registration statement.
Any
reference to any Preliminary Prospectus or the Prospectus shall be deemed
to
refer to and include any documents incorporated by reference therein pursuant
to
Form S-3 under the Securities Act as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be. Any reference to the “most
recent Preliminary Prospectus”
shall
be deemed to refer to the latest Preliminary Prospectus included in the
Registration Statement or filed pursuant to Rule 424(b) prior to or on the
date
hereof (including, for purposes hereof, any documents incorporated by reference
therein prior to or on the date hereof). Any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to
refer to and include any document filed under the Securities Exchange Act
of
1934, as amended (the “Exchange
Act”),
after
the date of such Preliminary Prospectus or the Prospectus, as the case may
be,
and incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any annual report of the Company on
Form
10-K filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Date that is incorporated by reference in
the
Registration Statement.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the effectiveness
of the
Registration Statement, and no proceeding or examination for such purpose
has
been instituted or, to the knowledge of the Company, threatened by the
Commission. The Commission has not notified the Company of any objection
to the
use of the form of the Registration Statement.
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(b) Well-Known
Seasoned Issuer; Automatic Shelf Registration Statement:
The
Company has been since the time of initial filing of the Registration Statement
and continues to be a “well-known seasoned issuer” (as defined in Rule 405)
eligible to use Form S-3 for the offering of the Stock, including
not having been an “ineligible issuer” (as defined in Rule 405) at any such time
or date. The Registration Statement is an “automatic shelf registration
statement” (as defined in Rule 405) and
was
filed not earlier than the date that is three years prior to the applicable
Delivery Date (as defined in Section 4).
(c) Conformity
to Description of Registration Statement, Preliminary Prospectus,
Prospectus:
The
Registration Statement conformed and will conform in all material respects
on
the Effective Date and on the applicable Delivery Date, and any amendment
to the
Registration Statement filed after the date hereof will conform in all material
respects, when filed, to the requirements of the Securities Act and the Rules
and Regulations. The Preliminary Prospectus conformed, and the Prospectus
will
conform, in all material respects when filed with the Commission pursuant
to
Rule 424(b) and on the applicable Delivery Date to the requirements of the
Securities Act and the Rules and Regulations. The documents incorporated
by
reference in any Preliminary Prospectus or the Prospectus conformed, and
any
further documents so incorporated will conform, when filed with the Commission,
in all material respects to the requirements of the Exchange Act or the
Securities Act, as applicable, and the rules and regulations of the Commission
thereunder.
(d) Registration
Statement:
The
Registration Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading;
provided
that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on
behalf
of any Underwriter specifically for inclusion therein, which information
is
specified in Section 8(e) or in a separate letter addressing such
information.
(e) Prospectus:
The
Prospectus will not, as of its date and on the applicable Delivery Date,
contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light
of the circumstances under which they were made, not misleading; provided
that no
representation or warranty is made as to information contained in or omitted
from the Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified
in Section 8(e) or in a separate letter addressing such
information.
(f) Incorporated
Documents:
The
documents incorporated by reference in the Registration Statement, any
Preliminary Prospectus or the Prospectus did not, and any further documents
filed and incorporated by reference therein will not, when filed with the
Commission, contain an untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
therein, in the light
3
of
the
circumstances under which they were made, not misleading; provided
that the
foregoing representation and warranty is given on the basis that any statement
contained in a document incorporated by reference therein shall be deemed
not to
be contained therein if the statement has been modified or superseded by
any
statement in a subsequently filed document incorporated by reference therein
or
in any amendment or supplement thereto.
(g) Pricing
Disclosure Package:
The
Pricing Disclosure Package did not, as of the Applicable Time, contain an
untrue
statement of a material fact or omit to state a material fact required to
be
stated therein or necessary to make the statements therein, in the light
of the
circumstances under which they were made, not misleading; provided
that no
representation or warranty is made as to information contained in or omitted
from the Pricing Disclosure Package in reliance upon and in conformity with
written information furnished to the Company through the Representative by
or on
behalf of any Underwriter specifically for inclusion therein, which information
is specified in Section 8(e) or in a separate letter addressing such
information.
(h) Issuer
Free Writing Prospectus:
Each
Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433) when considered together
with
the Pricing Disclosure Package as of the Applicable Time, did not contain
an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading.
(i) Conformity
to Description, Use, and Retaining of Issuer Free Writing
Prospectuses:
Each
Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations
on the date of first use, and the Company has complied with any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to
the
Rules and Regulations. The Company has not made any offer relating to the
Stock
that would constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representative. The Company will, pursuant to reasonable
procedures developed in good faith, retain in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses that were not required to
be
filed pursuant to the Rules and Regulations.
(j) Due
Incorporation and Qualification:
Each of
the Company and each of Altura Power LP and Altura Energy LLC and the Company’s
significant subsidiaries (within the meaning of Rule 1-02(w) of Regulation
S-X
under the Securities Act, and collectively with Altura Power L.P. and Altura
Energy LLC only for purposes of this Agreement, the “Significant
Subsidiaries”)
has
been duly incorporated or organized, is validly existing as a corporation
or
other business entity in good standing under the laws of the jurisdiction
in
which it is chartered or organized with full corporate power and authority
to
own its properties and conduct its business as described in any Preliminary
Prospectus and the Prospectus. Each of the Company and each Significant
Subsidiary is duly qualified to do business as a foreign corporation or other
business entity and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to be so qualified
or in good standing could not, in the aggregate, reasonably be expected to
have
a material adverse effect on the condition (financial or
4
otherwise),
results of operations, stockholders’ equity, properties or business of the
Company and its subsidiaries taken as a whole (a “Material
Adverse Effect”).
The
Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Schedule
1(j)
attached hereto. None of the subsidiaries of the Company is a “significant
subsidiary” (within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Act), other than Public Service Company of New Mexico, Texas-New
Mexico Power Company, First Choice Power Special Purpose, L.P., First Choice
Power, L.P., FCP Enterprises, Inc. and TNP Enterprises, Inc.
(k) Capitalization:
The
Company has an authorized capitalization as set forth in each of the most
recent
Preliminary Prospectus and the Prospectus. 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 thereof contained
in the
most recent Preliminary Prospectus. All of the issued and outstanding shares
of
capital stock or equivalent equity rights of each Significant Subsidiary
have
been duly authorized and validly issued, are fully paid and non-assessable
and,
with the exception of the outstanding preferred stock of Public Service Company
of New Mexico, which is owned by third parties, are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, and defects of
title.
(l) Authorization
of Stock.
The
shares of Stock have been duly authorized by the Company and, when issued
and
delivered in accordance with the provisions of this Agreement, will be validly
issued, fully paid and non-assessable, will conform in all material respects
to
the description thereof contained in the most recent Preliminary Prospectus,
and
will not be subject to preemptive or similar rights.
(m) Underwriting
Agreement:
The
Company has all the requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement. This Agreement has been
duly
authorized, executed and delivered by the Company.
(n) No
Conflicts:
The
execution, delivery and performance of this Agreement by the Company, the
issue
and sale of the Stock, the consummation of the transactions contemplated
hereby
and the application of the proceeds from the sale of the Stock as described
under “Use of Proceeds” in the most recent Preliminary Prospectus will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, impose any lien, charge or encumbrance upon any property or
assets of the Company and its subsidiaries, or constitute a default under,
any
indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by
which the Company or any of its subsidiaries is bound or to which any of
the
property or assets of the Company or any of its subsidiaries is subject;
(ii) result in any violation of the provisions of the charter, by-laws or
other organizational documents of the Company or any of its subsidiaries;
or
(iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over
the Company or any of its subsidiaries or any of their properties.
5
(o) No
Consents Required:
No
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Company
or
any of its subsidiaries or any of their properties is required to be obtained
by
the Company for the execution, delivery and performance of this Agreement
by the
Company, the consummation of the transactions contemplated hereby, the
application of the proceeds from the sale of the Stock as described under
“Use
of Proceeds” in the most recent Preliminary Prospectus, except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the
Exchange Act and applicable state securities or blue sky laws in connection
with
the purchase and sale of the Stock by the Underwriters.
(p) No
Material Adverse Changes:
Except
as described in the most recent Preliminary Prospectus, neither the Company
nor
any of its subsidiaries has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the most recent
Preliminary Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from
any labor dispute or court or governmental action, order or decree, and since
such date, there has not been any change in the capital stock, long-term
debt,
consolidated net current assets or stockholders’ equity of the Company and/or
any of its subsidiaries or any adverse change, or any development involving
a
prospective adverse change, in or affecting the condition (financial or
otherwise), results of operations, stockholders’ equity, properties, management,
business or prospects of the Company and its subsidiaries taken as a whole,
in
each case except as could not, in the aggregate, reasonably be expected to
have
a Material Adverse Effect.
(q) Historical
Financial Statements:
The
consolidated historical financial statements and schedules of the Company
and
its consolidated subsidiaries included or incorporated by reference in the
most
recent Preliminary Prospectus comply as to form in all material respects
with
the requirements of Regulation S-X under the Securities Act and present fairly
in all material respects the consolidated financial condition of the Company
and
its consolidated subsidiaries as of the dates indicated therein and the
consolidated results of their operations and cash flows for the periods
specified therein. Except as stated therein, such financial statements have
been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods
involved.
(r) Pro
Forma Financial Statements: The
pro
forma financial statements included or incorporated by reference in the most
recent Preliminary Prospectus include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included or incorporated
by reference in the most recent Preliminary Prospectus. The pro forma financial
statements included or incorporated by reference in the most recent Preliminary
Prospectus comply as to form in all material respects with the applicable
requirements of Regulation S-X under the Securities Act.
6
(s) Independent
Public Accountants:
Deloitte & Touche LLP, who have audited certain financial statements of the
Company and its consolidated subsidiaries, whose report appears in the most
recent Preliminary Prospectus or is incorporated by reference therein, are
independent public accountants with respect to the Company within the meaning
of
the Securities Act and the Rules and Regulations.
(t) Compliance:
The
Company owns or leases all such properties as are necessary to the conduct
of
its operations as presently conducted. The Company is not in non-compliance
with
any term or condition of, nor has failed to obtain and maintain in effect,
any
license, certificate, permit or other governmental authorization required
for
the ownership or lease of its property or the conduct of its business, which
violation, non-compliance or failure, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, except as set forth
the most recent Preliminary Prospectus. The Company has not received notice
of
any proceedings relating to the revocation or material modification of any
such
license, certificate, permit or other authorization.
(u) Investment
Company Act:
The
Company is not, and as of the applicable Delivery Date and, after giving
effect
to the offer and sale of the Stock and the application of the proceeds therefrom
as described under “Use of Proceeds” in the most recent Preliminary Prospectus
and the Prospectus, will not be, an “investment company” within the meaning of
such term under the Investment Company Act of 1940, as amended (the
“Investment
Company Act”).
(v) Litigation:
Other
than as set forth in the most recent Preliminary Prospectus, there are no
legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its
subsidiaries is the subject which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect or could, in the
aggregate, reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of the transactions
contemplated hereby. To the Company’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(w) No
Labor Disturbance:
No
labor
disturbance by or dispute with the employees of the Company exists or is,
to the
best knowledge of the Company, threatened or is imminent that could reasonably
be expected to have a Material Adverse Effect, except as set forth in the
most
recent Preliminary Prospectus.
(x) No
Defaults:
Neither
the Company nor any of its Significant Subsidiaries is in violation of its
charter, bylaws or other organizational documents, or, except as would not
reasonably be likely to have a Material Adverse Effect, (i) is in default
in the
performance or observance of any term, material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which
it is
bound or to which any of its properties is subject, (ii) is in violation
of any
statute or any order, rule or regulation of any court or governmental agency
or
body having jurisdiction over it or its property or (iii) has failed to obtain
any license, permit, certificate, franchise or other governmental authorization
or permit necessary to the ownership of its property or to the conduct of
its
business.
7
(y) Xxxxxxxx-Xxxxx:
To the
best of its knowledge, the Company is in compliance in all material respects
with the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”) that are effective and the rules and regulations of the
SEC that have been adopted and are effective thereunder.
(z) Environmental
Matters:
Except
as described in the most recent Preliminary Prospectus, each of the Company
and
each of its subsidiaries (i) is in compliance with any and all applicable
federal, state and local laws and regulations relating to the protection
of
human health and safety, the environment or hazardous or toxic substances
or
wastes, pollutants or contaminants (“Environmental
Laws”),
(ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where such non-compliance with Environmental Laws or failure to receive,
or
comply with the terms and conditions of required permits, licenses or approvals,
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect.
(aa) Accounting
Controls and Disclosure Controls:
The
Company and its subsidiaries maintain (x) systems of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are
executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences and (y) disclosure controls and procedures (as defined in Rule
13a-15(e) under the Exchange Act).
(bb) Distribution
and of Offering Materials:
The
Company has not distributed and, prior to the later to occur of any Delivery
Date and completion of the distribution of the Stock, will not distribute
any
offering material in connection with the offering and sale of the Stock other
than any Preliminary Prospectus, the Prospectus, and any Issuer Free Writing
Prospectus to which the Representative has consented in accordance with Section
1(i) or 5(a)(vii).
(cc) Anti-Manipulation:
The
Company has not taken, directly or indirectly, any action intended or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company in a manner which
would
violate the Securities Act or the Exchange Act.
Any
certificate signed by any officer of the Company and delivered to the
Representative or counsel for the Underwriters in connection with the offering
of the Stock shall be deemed a representation and warranty by the Company,
as to
matters covered thereby but only as of the date thereof, to each
Underwriter.
8
2. Purchase
of the Stock by the Underwriters.
On the
basis of the representations and warranties contained in, and subject to
the
terms and conditions of, this Agreement, the Company agrees to sell
5,000,000 shares of the Firm Stock to the several Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase the number
of
shares of the Firm Stock set forth opposite that Underwriter’s name in
Schedule
1
hereto.
The respective purchase obligations of the Underwriters with respect to the
Firm
Stock shall be rounded among the Underwriters to avoid fractional shares,
as the
Representative may determine.
In
addition, the Company grants to the Underwriters an option to purchase up
to
750,000 additional shares of Option Stock. Such option is exercisable in
the event that the Underwriters sell more shares of Common Stock than the
number
of Firm Stock in the offering and as set forth in Section 4 hereof. Each
Underwriter agrees, severally and not jointly, to purchase the number of
shares
of Option Stock (subject to such adjustments to eliminate fractional shares
as
the Representative may determine) that bears the same proportion to the total
number of shares of Option Stock to be sold on such Delivery Date as the
number
of shares of Firm Stock set forth in Schedule
1
hereto
opposite the name of such Underwriter bears to the total number of shares
of
Firm Stock.
The
price
of both the Firm Stock and any Option Stock purchased by the Underwriters
shall
be $29.712 per share.
The
Company shall not be obligated to deliver any of the Firm Stock or Option
Stock
to be delivered on the applicable Delivery Date, except upon payment for
all
such Stock to be purchased on such Delivery Date as provided
herein.
3. Offering
of Stock by the Underwriters.
Upon
authorization by the Representative of the release of the Firm Stock, the
several Underwriters propose to offer the Firm Stock for sale upon the terms
and
conditions to be set forth in the Prospectus.
4. Delivery
of and Payment for the Stock.
Delivery
of and payment for the Firm Stock shall be made at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between
the
Representative and the Company. This date and time are sometimes referred
to as
the “Initial
Delivery Date.”
Delivery of the Firm Stock shall be made to the Representative for the account
of each Underwriter against payment by the several Underwriters through the
Representative and of the respective aggregate purchase prices of the Firm
Stock
being sold by the Company to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds to the accounts specified
by the Company. Time shall be of the essence, and delivery at the time and
place
specified pursuant to this Agreement is a further condition of the obligation
of
each Underwriter hereunder. The Company shall deliver the Firm Stock through
the
facilities of DTC unless the Representative shall otherwise instruct. Upon
delivery, the Firm Stock shall be registered in the name of Cede & Co., as
nominee for DTC.
The
option granted in Section 2 will expire 30 days after the date of this Agreement
and may be exercised in whole or from time to time in part by written notice
being given to the Company by the Representative; provided
that if
such date falls on a day that is not a business day, the option granted in
Section 2 will expire on the next succeeding business day. Such notice shall
set
forth the aggregate number of shares of Option Stock as to which the option
is
being exercised, the names in which the shares of Option Stock are to be
registered, the
9
denominations
in which the shares of Option Stock are to be issued and the date and time,
as
determined by the Representative, when the shares of Option Stock are to
be
delivered; provided,
however,
that
this date and time shall not be earlier than the Initial Delivery Date nor
earlier than the second business day after the date on which the option shall
have been exercised nor later than the fifth business day after the date
on
which the option shall have been exercised. Each date and time the shares
of
Option Stock are delivered is sometimes referred to as an “Option
Stock Delivery Date,”
and
the Initial Delivery Date and any Option Stock Delivery Date are sometimes
each
referred to as a “Delivery
Date.”
Delivery
of the Option Stock by the Company and payment for the Option Stock by the
several Underwriters through the Representative shall be made at
10:00 A.M., New York City time, on the date specified in the corresponding
notice described in the preceding paragraph or at such other date or place
as
shall be determined by agreement between the Representative and the Company.
On
the Option Stock Delivery Date, the Company shall deliver or cause to be
delivered the Option Stock to the Representative for the account of each
Underwriter against payment by the several Underwriters through the
Representative and of the respective aggregate purchase prices of the Option
Stock being sold by the Company to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds to the accounts
specified by the Company. Time shall be of the essence, and delivery at the
time
and place specified pursuant to this Agreement is a further condition of
the
obligation of each Underwriter hereunder. The Company shall deliver the Option
Stock through the facilities of DTC unless the Representative shall otherwise
instruct. Upon delivery, the Firm Stock shall be registered in the name of
Cede
& Co., as nominee for DTC.
5. Further
Agreements of the Company and the Underwriters.
(a) The
Company agrees:
(i) Filing
of Prospectus; Amendments and Supplements; Filing of Exchange Act Reports;
Notice of Stop Orders:
To
prepare the Prospectus in a form approved by the Representative and to file
such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than
the
Commission’s close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment or
any
supplement to the Registration Statement or the Prospectus prior to the last
Delivery Date except as provided herein; to advise the Representative, promptly
after it receives notice thereof, of the time when any amendment or supplement
to the Registration Statement or the Prospectus has been filed and to furnish
the Representative with copies thereof and for so long as the delivery of
a
prospectus is required in connection with the offering or sale of the Stock;
to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Stock; to advise the Representative,
promptly after it receives notice thereof, of the issuance by the Commission
of
any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening by the Commission of any proceeding or examination
for
any such purpose, of any notice from the Commission objecting to the use
of the
form of the Registration Statement or any post-effective
10
amendment
thereto or of any request by the Commission for the amending or supplementing
of
the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus
or for additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of the Prospectus
or any
Issuer Free Writing Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(ii) Payment
of Commission Fees:
To pay
the applicable Commission filing fees relating to the Stock within the time
required by Rule 456(b)(1) without regard to the proviso
therein;
(iii) Copies
of Preliminary Prospectus, Prospectus, Issuer Free Writing Prospectus and
Incorporated Documents; Certain Events and Amendments or
Supplements:
To
deliver promptly to the Representative on or prior to the applicable Delivery
Date such number of the following documents as the Representative shall
reasonably request: (A) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in each
case
excluding exhibits other than this Agreement and the computation of per share
earnings), (B) each Preliminary Prospectus, the Prospectus and any amended
or
supplemented Prospectus, (C) each Issuer Free Writing Prospectus and (D)
any
document incorporated by reference in any Preliminary Prospectus or the
Prospectus; and, if the delivery of a prospectus is required at any time
after
the date hereof in connection with the offering or sale of the Stock and
if at
such time any events shall have occurred as a result of which the Prospectus
as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus or to file under
the
Exchange Act any document incorporated by reference in the Prospectus in
order
to comply with the Securities Act or the Exchange Act, to notify the
Representative and, upon its request, to file such document and to prepare
and
furnish without charge to each Underwriter and to any dealer in securities
as
many copies as the Representative may from time to time reasonably request
of an
amended or supplemented Prospectus that will correct such statement or omission
or effect such compliance;
(iv) Filing
of Amendments or Supplements:
To file
promptly with the Commission any amendment or supplement to the Registration
Statement or the Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission;
(v) Furnishing
of Amendments or Supplements:
Prior
to filing with the Commission any amendment or supplement to the Registration
Statement or the Prospectus, any document incorporated by reference in the
Prospectus or any amendment to any document incorporated by reference in
the
Prospectus, to furnish a copy thereof to the Representative and counsel for
the
Underwriters and not file any of the same with the Commission to which the
Representative shall reasonably object, for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Stock;
11
(vi) Offers
by Issuer Free Writing Prospectuses:
Not to
make any offer relating to the Stock that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the
Representative;
(vii) Rule
433; Certain Events and Amendments or Supplements to Issuer Free Writing
Prospectus:
To
comply with all applicable requirements of Rule 433 with respect to any Issuer
Free Writing Prospectus; and if at any time after the date hereof any events
shall have occurred as a result of which any Issuer Free Writing Prospectus,
as
then amended or supplemented, would conflict with the information in the
Registration Statement, the most recent Preliminary Prospectus or the Prospectus
or would include an untrue statement of a material fact or omit to state
any
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading, or, if for
any
other reason it shall be necessary to amend or supplement any Issuer Free
Writing Prospectus, to notify the Representative and, upon its request, to
file
such document and to prepare and furnish without charge to each Underwriter
as
many copies as the Representative may from time to time reasonably request
of an
amended or supplemented Issuer Free Writing Prospectus that will correct
such
conflict, statement or omission or effect such compliance;
(viii) Earning
Statement:
As soon
as practicable after the Effective Date and in any event not later than 16
months after the date hereof, to make generally available to the Company’s
security holders and to deliver to the Representative an earnings statement
of
the Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations (including
in
accordance with Rule 158 under the Securities Act);
(ix) Blue
Sky Qualifications:
Promptly
from time to time to take such action as the Representative may reasonably
request to qualify the Stock for offering and sale under the securities laws
of
Canada and such other jurisdictions as the Representative 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 Stock; provided
that in
connection therewith the Company shall not be required to (i) qualify as
a
foreign corporation in any jurisdiction in which it would not otherwise be
required to so qualify, (ii) file a general consent to service of process
in any
such jurisdiction or (iii) subject itself to taxation in any jurisdiction
in
which it would not otherwise be subject;
(x) Lock-Up
on Sale of Stock:
For a
period commencing on the date hereof and ending on the 90th day after the
date
of the Prospectus or, in the case of any shares of Common Stock issued pursuant
to the equity distribution agreement with Xxxxxx X. Xxxxx & Co.
Incorporated, RBC Capital Markets Corporation and Xxxxx Fargo Securities,
LLC
relating to 8,000,000 shares of Common Stock to be issued from time to time,
the
60th
day
after the date of the Prospectus (such 60- or 90-day period, as applicable,
the
“Lock-Up
Period”),
not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device that is designed to,
or
could be expected to, result in the disposition by any person at any time
in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than (A) the Stock, (B) any shares of
Common Stock issued by the Company
12
upon
the
exercise of an option or warrant or the conversion or exchange of a security
outstanding on the date hereof, (C) any shares of Common Stock issued or
options
to purchase Common Stock granted pursuant to existing employee benefit plans
of
the Company, (D) any shares of Common Stock issued pursuant to any nonemployee
director stock plan, the PNM Resources, Inc. Direct Plan (a stock purchase
and
dividend reinvestment plan) or any other dividend reinvestment and stock
repurchase plan in effect on the date hereof, (E) any shares of Common Stock
issued by the Company to fund the PNM Resources, Inc. Executive Savings Plan
and
any shares of Common Stock issued to a trust formed by the Company or any
of its
subsidiaries in connection with any deferred compensation arrangements in
existence as of the date hereof, (F) any shares of Common Stock offered or
sold
by the Company in connection with its resale Registration Statement No.
333-128607, and (G) any
shares of Common Stock issued in connection with the settlement of the 6.75%
Equity Units issued on March 30, 2005 or the 6.625% Hybrid Income Term Security
Units issued on October 7, 2005), or sell or grant options, rights or warrants
with respect to any shares of Common Stock or securities convertible into
or
exchangeable for Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
(3) file or cause to be filed a registration statement, including any
amendments, with respect to the registration of any shares of Common Stock
or
securities convertible, exercisable or exchangeable into Common Stock or
any
other securities of the Company (other than any registration statement on
Form
S-8) or (4) publicly disclose the intention to do any of the foregoing, in
each
case without the prior written consent of Xxxxxx Brothers Inc. on behalf
of the
Underwriters, and to cause each officer and director of the Company set forth
on
Schedule
2
hereto
to furnish to the Representative, on or prior to the Initial Delivery Date,
a
letter or letters, substantially in the form of Exhibit
A
hereto
(the “Lock-Up
Agreements”);
notwithstanding the foregoing, if (1) during the last 17 days of any Lock-Up
Period, the Company issues an earnings release or material news or a material
event relating to the Company occurs or (2) prior to the expiration of any
Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of such Lock-Up Period,
then
the restrictions imposed in the preceding paragraph shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the announcement of the material news or the occurrence
of
the material event, unless Xxxxxx Brothers Inc., on behalf of the Underwriters,
waive such extension in writing;
(xi) Application
of Net Proceeds:
To
apply the net proceeds from the sale of the Stock being sold by the Company
as
set forth in the Prospectus;
(x) Anti-manipulation:
Not to
at any time, directly or indirectly, take any action intended, or which might
reasonably be expected, to cause or result in the stabilization or manipulation
of the price of any security of the Company in a manner that would violate
the
Securities Act or the Exchange Act;
13
(b) Each
Underwriter severally agrees that such Underwriter shall not include any
“issuer
information” (as defined in Rule 433) in any “free writing prospectus” (as
defined in Rule 405) used or referred to by such Underwriter without the
prior
consent of the Company (any such issuer information with respect to whose
use
the Company has given its consent, “Permitted
Issuer Information”);
provided
that (i)
no such consent shall be required with respect to any such issuer information
contained in any document filed by the Company with the Commission prior
to the
use of such free writing prospectus and (ii) “issuer information,” as used in
this Section 5(b), shall not be deemed to include information prepared by
or on
behalf of such Underwriter on the basis of or derived from issuer
information.
6. Expenses.
The
Company agrees, whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, to pay all costs, expenses,
fees and taxes incident to and in connection with (a) the authorization,
issuance, sale and delivery of the Stock and any stamp duties or other taxes
payable in that connection; (b) the preparation, printing and filing under
the
Securities Act of the Registration Statement (including any exhibits thereto),
any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
and any amendment or supplement thereto; (c) the distribution of the
Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment
or supplement thereto, or any document incorporated by reference therein,
all as
provided in this Agreement; (d) the production and distribution of this
Agreement, and any other related documents in connection with the offering,
purchase, sale and delivery of the Stock; (e) the listing of the Stock on
the
New York Stock Exchange and/or any other exchange; (f) the qualification
of the
Stock under the securities laws of the several jurisdictions as provided
in
Section 5(a)(x) and the preparation, printing and distribution of a Blue
Sky
Memorandum (including related fees and expenses of counsel to the Underwriters
in an amount that is not greater than $5,000); (g) the preparation, printing
and
distribution of one or more versions of the Preliminary Prospectus and the
Prospectus for distribution in Canada (often in the form of a Canadian “wrapper”
(including related fees and expenses of Canadian counsel to the Underwriters);
(h) the investor presentations on any “road show” undertaken in connection with
the marketing of the Stock, including, without limitation, expenses associated
with any electronic roadshow, travel and lodging expenses of the representatives
and officers of the Company and the cost of any aircraft chartered in connection
with the road show; and (i) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that,
(a) the Underwriters agree to pay a portion of the foregoing expenses in
an
amount of $115,463, and an additional $17,319 if the option provided in Section
2 is exercised by the Underwriters in full (such final amount to be ratably
reduced based on the percentage of the option which is not exercised), and
(b)
except as provided in this Section 6 and in Section 11, the Underwriters
shall
pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Stock which they may sell and the expenses
of
advertising any offering of the Stock made by the Underwriters.
7. Conditions
of Underwriters’ Obligations.
The
respective obligations of the Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company
of
its obligations hereunder, and to each of the following additional terms
and
conditions:
14
(a) Filing
of Prospectus and Free Writing Prospectus; No Stop Order:
The
Prospectus shall have been timely filed with the Commission in accordance
with
Section 5(a)(i); the Company shall have complied with all filing requirements
applicable to any Issuer Free Writing Prospectus used or referred to after
the
date hereof; no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus shall have been issued and no proceeding or examination
for such purpose shall have been initiated or, to the knowledge of the Company,
threatened by the Commission; any request of the Commission for inclusion
of
additional information in the Registration Statement or the Prospectus shall
have been complied with; and the Commission shall not have notified the Company
of any objection to the use of the form of the Registration
Statement.
(b) No
Discovery of Untrue Statements or Omissions:
No
Underwriter shall have discovered and disclosed to the Company on or prior
to
such Delivery Date that the Registration Statement, the Prospectus or the
Pricing Disclosure Package, or any amendment or supplement thereto, contains
an
untrue statement of a fact which, in the opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, is material or omits to state
a fact
which, in the opinion of such counsel, is material and is required to be
stated
therein or is necessary to make the statements therein not misleading.
(c) Other
Documents and Certificates:
All
corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Stock, the Registration Statement,
the
Prospectus and any Issuer Free Writing Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) Opinions
of Company Counsel:
Xxxxxxx
X. Xxxxx, Associate General Counsel of the Company, SEC Reporting and Corporate
Transactions, shall have furnished to the Representative his written opinion,
as
counsel to the Company, addressed to the Underwriters and dated such Delivery
Date, substantially in the form attached hereto as Exhibit
B-1.
Xxxxxxxx Xxxxxxx LLP shall have furnished to the Representative its written
opinion, as counsel to the Company, addressed to the Underwriters and dated
such
Delivery Date, substantially in the form attached hereto as Exhibit
B-2.
(e) Opinions
of Underwriters’ Counsel:
The
Representative shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and the Pricing Disclosure Package and other related
matters as the Representative may reasonably require, and the Company shall
have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
15
(f) Letters
of Accountants:
At the
time of execution of this Agreement, the Representative shall have received
from
Deloitte & Touche LLP a letter, in form and substance satisfactory to the
Representative, addressed to the Underwriters and dated the date hereof (i)
confirming that they are independent public accountants within the meaning
of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, and (ii) stating, as of the date hereof (or, with
respect
to matters involving changes or developments since the respective dates as
of
which specified financial information is given in the most recent Preliminary
Prospectus, as of a date not more than three days prior to the date hereof),
the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings.
(g) With
respect to the letter of Deloitte & Touche LLP referred to in the preceding
paragraph and delivered to the Representative concurrently with the execution
of
this Agreement (the “initial
letter”),
the
Company shall have furnished to the Representative a letter (the “bring-down
letter”)
of
such accountants, addressed to the Underwriters and dated such Delivery Date
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of
Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is
given
in the Prospectus, as of a date not more than three days prior to the date
of
the bring-down letter), the conclusions and findings of such firm with respect
to the financial information and other matters covered by the initial letter
and
(iii) confirming in all material respects the conclusions and findings set
forth in the initial letter.
(h) Officers’
Certificates:
The
Company shall have furnished to the Representative a certificate, dated such
Delivery Date, of its Chief Executive Officer and President or any Senior
Vice
President, and its Chief Financial Officer or Vice President, Treasury and
Taxation, stating that:
(i) The
representations, warranties and agreements of the Company in Section 1
are true and correct on and as of such Delivery Date, and the Company has
complied with all its agreements contained herein and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior
to
such Delivery Date;
(ii) No
stop
order suspending the effectiveness of the Registration Statement has been
issued; no proceedings or examination for that purpose have been instituted
or,
to the knowledge of such officers, threatened; and the Commission has not
notified the Company of any objection to the use of the form of the Registration
Statement or any post-effective amendment thereto; and
(iii)
They
have
carefully examined the Registration Statement, the Prospectus and the Pricing
Disclosure Package, and, in their opinion, (A) (1) the Registration Statement,
as of the Effective Date, (2) the Prospectus, as of its date and on the
applicable Delivery Date, or (3) the Pricing Disclosure Package, as of the
Applicable Time, did not and do not contain any untrue statement of a material
fact and did not and do not omit to state a material fact required to be
stated
therein or necessary to make the statements therein (except in the case of
16
the
Registration Statement, in the light of the circumstances under which they
were
made) not misleading and (B) since the Effective Date, no event has occurred
that should have been set forth in a supplement or amendment to the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus that has
not
been so set forth;
(i) No
Material Changes:
Except
as described in the most recent Preliminary Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained, since the date of the latest
audited financial statements included or incorporated by reference in the
most
recent Preliminary Prospectus, any loss or interference with its business
from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree
or
(ii) since the date of the most recent Preliminary Prospectus, there shall
not
have been any change in the capital stock, long-term debt, consolidated net
current assets or stockholders’ equity of the Company and/or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management or business of the Company and its
subsidiaries taken as a whole, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representative, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(j) No
Downgrading:
Subsequent to the execution and delivery of this Agreement (i) no downgrading
shall have occurred in the rating accorded the Company’s debt securities or
preferred stock by any “nationally recognized statistical rating organization”
(as that term is defined by the Commission for purposes of Rule 436(g)(2)
of the
Rules and Regulations), and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company’s debt securities or preferred
stock.
(k) Nonoccurrence
of Certain Events:
Subsequent to the execution and delivery of this Agreement there shall not
have
occurred any of the following: (i) trading in securities generally on the
New
York Stock Exchange or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in
the
over-the-counter market, shall have been suspended or materially limited
or the
settlement of such trading generally shall have been materially disrupted
or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall
have
been declared by federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions
on
the financial markets in the United States shall be such), as to make it,
in the
judgment of the Representative, impracticable or inadvisable to proceed with
the
public offering or delivery of the Stock being delivered on such Delivery
Date
on the terms and in the manner contemplated in the Prospectus.
17
(l) Approval
of Listing:
The New
York Stock Exchange shall have approved the Stock for listing, subject only
to
official notice of issuance.
(m) Lock-Up
Agreements:
The
Lock-Up Agreements between the Representative and the parties named on
Schedule
2,
delivered to the Representative on or before the date of this Agreement,
shall
be in full force and effect on such Delivery Date.
All
opinions, letters, evidence and certificates mentioned above or elsewhere
in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance as provided in exhibits to this
Agreement, and if not so provided, then in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. Indemnification
and Contribution.
(a) The
Company shall indemnify and hold harmless each Underwriter, its directors,
officers and employees and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act, from and against
any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability
or
action relating to purchases and sales of Stock), to which that Underwriter,
director, officer, employee or controlling person may become subject, under
the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any Preliminary Prospectus,
the Registration Statement, the Prospectus or in any amendment or supplement
thereto, (B) any Issuer Free Writing Prospectus or in any amendment or
supplement thereto, (C) any Permitted Issuer Information used or referred
to in
any “free writing prospectus” (as defined in Rule 405) used or referred to by
any Underwriter or (D) any “road show” (as defined in Rule 433) not constituting
an Issuer Free Writing Prospectus (a “Non-Prospectus
Road Show”),
(ii)
the omission or alleged omission to state in any Preliminary Prospectus,
the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
or in
any amendment or supplement thereto or in any Permitted Issuer Information,
any
Non Prospectus Road Show, any material fact required to be stated therein
or
necessary to make the statements therein not misleading or (iii) any act
or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided
that the
Company shall not be liable under this clause (iii) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that
such
loss, claim, damage, liability or action resulted directly from any such
acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such director, officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred
by that
Underwriter, director, officer, employee or controlling person in connection
with
18
investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however,
that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon,
any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the Prospectus,
any Issuer Free Writing Prospectus or in any such amendment or supplement
thereto or in any Permitted Issuer Information, any Non Prospectus Road Show
in
reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representative by or on
behalf
of any Underwriter specifically for inclusion therein, which information
consists solely of the information specified in Section 8(e) or in a separate
letter addressing such information. The foregoing indemnity agreement is
in
addition to any liability which the Company may otherwise have to any
Underwriter or to any director, officer, employee or controlling person of
that
Underwriter.
(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless
the
Company, its directors, officers and employees, and each person, if any,
who
controls the Company within the meaning of Section 15 of the Securities Act,
from and against any loss, claim, damage or liability, joint or several,
or any
action in respect thereof, to which the Company or any such director, officer,
employee or controlling person may become subject, under the Securities Act
or
otherwise, insofar as such loss, claim, damage, liability or action arises
out
of, or is based upon, (i) any untrue statement or alleged untrue statement
of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show, or (ii)
the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
or in
any amendment or supplement thereto or in any Non-Prospectus Road Show, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representative by or on
behalf
of that Underwriter specifically for inclusion therein, which information
is
limited to the information set forth in Section 8(e) or in a separate letter
addressing such information. The foregoing indemnity agreement is in addition
to
any liability that any Underwriter may otherwise have to the Company or any
such
director, officer, employee or controlling person.
(c) Promptly
after receipt by an indemnified party under this Section 8 of notice of any
claim or the commencement of any action, the indemnified party shall, if
a claim
in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim or the
commencement of that action; provided,
however,
that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it
has
been materially prejudiced by such failure and, provided,
further,
that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under
this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party
19
thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory
to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided,
however,
that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and those other indemnified parties and their
respective directors, officers, employees and controlling persons who may
be
subject to liability arising out of any claim in respect of which indemnity
may
be sought under this Section 8 if (i) the indemnified party and the indemnifying
party shall have so mutually agreed; (ii) the indemnifying party has failed
within a reasonable time to retain counsel reasonably satisfactory to the
indemnified party; (iii) the indemnified party and its respective directors,
officers, employees and controlling persons shall have reasonably concluded
that
there may be legal defenses available to them that are different from or
in
addition to those available to the indemnifying party; or (iv) the named
parties
in any such proceeding (including any impleaded parties) include both the
indemnified parties or their respective directors, officers, employees or
controlling persons, on the one hand, and the indemnifying party, on the
other
hand, and represen-tation of both sets of parties by the same counsel would
be
inappropriate due to actual or potential differing interests between them,
and
in any such event the fees and expenses of such separate counsel shall be
paid
by the indemnifying party. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not
be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include
any
findings of fact or admissions of fault or culpability as to the indemnified
party, or (ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably withheld), but
if
settled with the consent of the indemnifying party or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees
to
indemnify and hold harmless any indemnified party from and against any loss
or
liability by reason of such settlement or judgment.
(d) If
the
indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the
amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion
as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other, from the offering of
the
Stock or (ii) if the allocation provided by clause (i) above is not permitted
by
applicable law, in such proportion as is appropriate to reflect not only
the
relative benefits referred
20
to
in
clause (i) above but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
that resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriters,
on the
other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased
under this Agreement (before deducting expenses) received by the Company,
as set
forth in the table on the cover page of the Prospectus, on the one hand,
and the
total underwriting discounts and commissions received by the Underwriters
with
respect to the shares of the Stock purchased under this Agreement, as set
forth
in the table on the cover page of the Prospectus, on the other hand. The
relative fault shall be determined by reference to whether the untrue or
alleged
untrue statement of a material fact or omission or alleged omission to state
a
material fact relates to information supplied by the Company on the one hand
or
the Underwriters on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not
be just and equitable if contributions pursuant to this Section 8(d) were
to be
determined by pro rata allocation (even if the Underwriters were treated
as one
entity for such purpose) or by any other method of allocation that does not
take
into account the equitable considerations referred to herein. The amount
paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section
8(d)
shall be deemed to include, for purposes of this Section 8(d), any legal
or
other expenses reasonably incurred by such indemnified party in connection
with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the net proceeds from the sale
of
the Stock underwritten by it exceeds the amount of any damages that such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not
guilty of such fraudulent misrepresentation. The Underwriters’ obligations to
contribute as provided in this Section 8(d) are several in proportion to
their
respective underwriting obligations and not joint.
(e) The
Underwriters severally confirm and the Company acknowledges and agrees that
the
statements regarding delivery of shares by the Underwriters set forth on
the
cover page of, and the concession and reallowance figures and the paragraph
relating to stabilization by the Underwriters appearing under the
caption “Underwriting” in, the
most
recent Preliminary Prospectus and the Prospectus are correct and constitute
information concerning such Underwriters furnished in writing to the Company
by
or on behalf of the Underwriters specifically for inclusion in any Preliminary
Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or in any Non-Prospectus
Road Show.
21
9. Defaulting
Underwriters.
If, on
any Delivery Date, any Underwriter defaults in the performance of its
obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock that the defaulting Underwriter
agreed
but failed to purchase on such Delivery Date in the respective proportions
which
the number of shares of the Firm Stock set forth opposite the name of each
remaining non-defaulting Underwriter in Schedule
1
hereto
bears to the total number of shares of the Firm Stock set forth opposite
the
names of all the remaining non-defaulting Underwriters in Schedule
1
hereto;
provided,
however,
that
the remaining non-defaulting Underwriters shall not be obligated to purchase
any
of the Stock on such Delivery Date if the total number of shares of the Stock
that the defaulting Underwriter or Underwriters agreed but failed to purchase
on
such date exceeds 9.09% of the total number of shares of the Stock to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of shares
of the
Stock that it agreed to purchase on such Delivery Date pursuant to the terms
of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representative
who
so agree, shall have the right, but shall not be obligated, to purchase,
in such
proportion as may be agreed upon among them, all the Stock to be purchased
on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representative do not elect to purchase the shares that
the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to any Option Stock Delivery
Date, the obligation of the Underwriters to purchase, and of the Company
to
sell, the Option Stock) shall terminate without liability on the part of
any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections
6
and 11. As used in this Agreement, the term “Underwriter” includes, for all
purposes of this Agreement unless the context requires otherwise, any party
not
listed in Schedule
1
hereto
that, pursuant to this Section 9, purchases Stock that a defaulting Underwriter
agreed but failed to purchase.
Nothing
contained herein shall relieve a defaulting Underwriter of any liability
it may
have to the Company for damages caused by its default. If other Underwriters
are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representative or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that
in
the opinion of counsel for the Company or counsel for the Underwriters may
be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
10. Termination.
The
obligations of the Underwriters hereunder may be terminated by the
Representative by notice given to and received by the Company prior to delivery
of and payment for the Firm Stock if, prior to that time, any of the events
described in Sections 7(i), 7(j) and 7(k) shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted
under
this Agreement.
11. Reimbursement
of Underwriters’ Expenses.
If the
Company shall fail to tender the Stock for delivery to the Underwriters for
any
reason or (b) the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement, the Company will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with
this
Agreement and the proposed purchase of the Stock, and upon demand the Company
shall pay the full amount thereof to the Representative. If this Agreement
is
terminated pursuant to Section 9 by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
22
12. Research
Analyst Independence. The
Company acknowledges that the Underwriters’ research analysts and research
departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies,
and that such Underwriters’ research analysts may hold views and make statements
or investment recommendations and/or publish research reports with respect
to
the Company and/or the offering that differ from the views of their respective
investment banking divisions. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any conflict of interest that may arise
from
the fact that the views expressed by their independent research analysts
and
research departments may be different from or inconsistent with the views
or
advice communicated to the Company by such Underwriters’ investment banking
divisions. The Company acknowledges that each of the Underwriters is a full
service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account
of
its customers and hold long or short positions in debt or equity securities
of
the companies that may be the subject of the transactions contemplated by
this
Agreement.
13. No
Fiduciary Duty.
The
Company acknowledges and agrees that in connection with this offering, sale
of
the Stock or any other services the Underwriters may be deemed to be providing
hereunder, notwithstanding any preexisting relationship,
advisory or otherwise,
between
the parties or any oral representations or assurances previously or subsequently
made by the Underwriters:
(i) no
fiduciary or agency relationship between the Company and any other person,
on
the one hand, and the Underwriters, on the other, exists;
(ii) the
Underwriters are not acting as advisors, expert or otherwise,
to the
Company, including, without limitation, with respect to the determination
of the
public offering price of the Stock,
and such relationship between the Company, on the one hand, and the
Underwriters, on the other, is entirely and solely commercial,
based
on arms-length negotiations; (iii)
any
duties and obligations that the Underwriters may have to the Company shall
be
limited to those duties and obligations specifically stated herein;
and
(iv) the
Underwriters and their respective affiliates may have interests that differ
from
those of the Company.
The
Company hereby waives any claims that the Company may have against the
Underwriters with respect to any breach of fiduciary duty in connection with
this offering.
14. Notices,
Etc.
All
statements, requests, notices and agreements hereunder shall be in writing,
and:
(a) if
to the
Underwriters, shall be delivered or sent by mail or facsimile transmission
to
Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Registration (Fax: 000-000-0000), with a copy, in the case of any
notice pursuant to Section 8(c), to the Director of Litigation, Office of
the
General Counsel, Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Fax: 000-000-0000);
and
(b) if
to the
Company, shall be delivered or sent by mail or facsimile transmission to
the
address of the Company set forth in the Registration Statement, Attention:
General Counsel (Fax: 000-000-0000).
23
Any
such
statements, requests, notices or agreements shall take effect at the time
of
receipt thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters
by
Xxxxxx Brothers Inc.
15. Persons
Entitled to Benefit of Agreement.
This
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Company and their respective successors. This Agreement and the terms
and
provisions hereof are for the sole benefit of only those persons, except
that
(A) the representations, warranties, indemnities and agreements of the Company
and the Underwriters contained in this Agreement shall also be deemed to
be for
the benefit of the directors, officers and employees of the Underwriters
or the
Company and each person or persons, if any, who control any Underwriter or
the
Company within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration Statement and
any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed
to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. Survival.
The
respective indemnities, representations, warranties and agreements of the
Company and the Underwriters contained in this Agreement or made by or on
behalf
of them, respectively, pursuant to this Agreement, shall survive the delivery
of
and payment for the Stock and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
17. Definition
of the Terms “Business Day” and “Subsidiary”.
For
purposes of this Agreement, (a) “business
day”
means
each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on
which
banking institutions in New York are generally authorized or obligated by
law or
executive order to close and (b) “subsidiary”
has
the
meaning set forth in Rule 405.
18. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York.
19. Counterparts.
This
Agreement may be executed in one or more counterparts and, if executed in
more
than one counterpart, the executed counterparts shall each be deemed to be
an
original but all such counterparts shall together constitute one and the
same
instrument.
20. Headings.
The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
24
If
the
foregoing correctly sets forth the agreement between the Company and the
Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very
truly yours,
| PNM RESOURCES, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxx | |
|
Name: Xxxxxxx X. Xxxxxx |
||
|
Title
Senior Vice President and
Chief Financial Officer
|
||
25
Accepted:
Xxxxxx
Brothers Inc.
For
itself and as Representative
of
the
several Underwriters named
in
Schedule 1 hereto
By:
/s/ Xxxx Xxxxxxxx
Authorized
Representative
Name:
Xxxx Xxxxxxxx
Title: Vice
President
26
SCHEDULE
1
|
Underwriters
|
Number
of Shares of Firm Stock
|
|
Xxxxxx
Brothers Inc.
|
1,650,000
|
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
|
875,000
|
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
875,000
|
|
Banc
of America Securities LLC
|
550,000
|
|
Citigroup
Global Markets Inc.
|
550,000
|
|
X.X.
Xxxxxx Securities Inc.
|
125,000
|
|
Xxxxxx
X. Xxxxx & Co. Incorporated
|
125,000
|
|
RBC
Capital Markets Corporation
|
125,000
|
|
Wachovia
Capital Markets, LLC
|
125,000
|
|
Total
|
5,000,000
|
27
SCHEDULE
1(j)
List
of all subsidiaries of the Company
|
1. Altura
Energy LLC
|
21. Bellamah
Investors Ltd.
|
|
2. Altura
Power GP, LLC
|
22. EIP
Refunding Corporation
|
|
3. Altura
Power L.P.
|
23. Facility
Works, Inc.
|
|
4. Avistar,
Inc.
|
24. Gas
Company of New Mexico
|
|
5. FCP
Enterprises, Inc.
|
25. MCB
Financial Group, Inc.
|
|
6. First
Choice Power GP, LLC
|
26.
Xxxxxxx
Resources, Inc.
|
|
7. First
Choice Power Retail LP
|
27. PNM
Electric & Gas Services, Inc.
|
|
8. First
Choice Power Special Purpose, L.P.
|
28. PNMR
Development and Management Corporation
|
|
9. First
Choice Power, L.P.
|
29. Republic
Holding Company
|
|
10. First
Choice Special Purpose GP, LLC
|
30. Republic
Savings Bank, F.S.B.
|
|
11. Xxxx
Power Company, LLC
|
31. Sunbelt
Mining Company, Inc.
|
|
12. PNM
Receivables Corp.
|
32. Sunterra
Gas Gathering Company
|
|
13. PNMR
Services Company
|
33. Sunterra
Gas Processing Company
|
|
14. Public
Service Company of New Mexico
|
34. Texas
Generating Company II, LLC
|
|
15. Texas-New
Mexico Power Company
|
35. Texas
Generating Company, L.P.
|
|
16. TNP
Enterprises, Inc.
|
36. TNP
Operating Company
|
|
17. Bellamah
Associates Ltd.
|
37. TNP
Technologies L.L.C.
|
|
18. Bellamah
Community Development
|
38. TNPE
- Magnus L.L.C.
|
|
19. Bellamah
Holding Company
|
39.
XXXXX.xxx
|
|
20. Bellamah
Holding Ltd.
|
28
SCHEDULE
2
PERSONS
DELIVERING LOCK-UP AGREEMENTS
Directors
X.X.
Xxxxxxxxx
X.X.
Xxxxxx
X.X.
Xxxx
X.X.
XxXxxxx
M.T.
Xxxxxxx
X.X.
Price
X.X.
Xxxxx
X.X.
Xxxxxx
X.X.
Xxxxxxx
Executive
Officers
X.X.
Xxxxxx (he will provide one letter as an officer and director)
C.N.
Xxxxxx
X.X.
Xxxx
P.T.
Xxxxx
X.X.
Real
X.X.
Xxxxx
X.X.
Xxxxx
X.X.
Xxxxxxx
29
SCHEDULE
3
INFORMATION
INCLUDED IN PRICING DISCLOSURE PACKAGE
| · |
$30.79
per share
|
| · |
5,000,000
shares of Firm Stock
|
| · |
750,000
shares of Option Stock
|
30
LOCK-UP
LETTER AGREEMENT
Xxxxxx
Brothers Inc.
As
Representative of the several
Underwriters
named in the below-referenced Underwriting Agreement
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
The
undersigned understands that you and certain other firms (the “Underwriters”)
propose to enter into an Underwriting Agreement (the “Underwriting
Agreement”)
providing for the purchase by the Underwriters of shares (the “Stock”)
of
Common Stock, no par value per share (the “Common
Stock”),
of
PNM Resources, Inc., a New Mexico corporation (the “Company”),
and
that the Underwriters propose to reoffer the Stock to the public (the
“Offering”).
In
consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of
(or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of)
any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission
and
shares of Common Stock that may be issued upon exercise of any options or
warrants) or securities convertible into or exercisable or exchangeable for
Common Stock (other than the Stock), (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of
the economic benefits or risks of ownership of shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled
by
delivery of Common Stock or other securities, in cash or otherwise, (3)
make
any demand for or exercise any right or cause to be filed a registration
statement, including any amendments thereto, with respect to the registration
of
any shares of Common Stock or securities convertible into or exercisable
or
exchangeable for Common Stock or any other securities of the Company or (4)
publicly disclose the intention to do any of the foregoing, for a period
commencing on the date hereof and ending on the 90th day after the date of
the
Prospectus relating to the Offering (such 90-day period, the “Lock-Up
Period”).
Notwithstanding
the foregoing, if (1) during the last 17 days of the Lock-Up Period, the
Company
issues an earnings release or material news or a material event relating
to the
Company occurs or (2) prior to the expiration of the Lock-Up Period, the
Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, then the restrictions imposed
by this Lock-Up Letter Agreement shall continue to apply until the expiration
of
the 18-day period beginning on the issuance of the earnings release or the
announcement of the material news or the occurrence of the material
31
event,
unless Xxxxxx Brothers Inc. waives such extension in writing. The undersigned
hereby further agrees that, prior to engaging in any transaction or taking
any
other action that is subject to the terms of this Lock-Up Letter Agreement
during the period from the date of this Lock-Up Letter Agreement to and
including the 34th
day
following the expiration of the Lock-Up Period, it will give notice thereof
to
the Company and will not consummate such transaction or take any such action
unless it has received written confirmation from the Company that the Lock-Up
Period (as such may have been extended pursuant to this paragraph) has
expired.
In
furtherance of the foregoing, the Company and its transfer agent are hereby
authorized to decline to make any transfer of securities if such transfer
would
constitute a violation or breach of this Lock-Up Letter Agreement.
It
is
understood that, if the Company notifies the Underwriters that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior
to
payment for and delivery of the Stock, the undersigned will be released from
its
obligations under this Lock-Up Letter Agreement.
The
undersigned understands that the Company and the Underwriters will
proceed
with the Offering in reliance on this Lock-Up Letter Agreement.
Whether
or not the Offering actually occurs depends on a number of factors, including
market conditions. Any Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation between the Company
and
the Underwriters.
[Signature
page follows]
32
The
undersigned hereby represents and warrants that the undersigned has full
power
and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary
in
connection with the enforcement hereof. Any obligations of the undersigned
shall
be binding upon the heirs, personal representatives, successors and assigns
of
the undersigned.
Very
truly yours,
| |
|
|
| By: | /s/ | |
|
Name: |
||
| Title : | ||
Dated:
December 6, 2006
33
EXHIBIT
B-1
FORM
OF OPINION OF XXXXXXX X. XXXXX
December
[12], 2006
Xxxxxx
Brothers Inc.
As
Representative of the Several Underwriters
named
in
Schedule 1 to the Underwriting Agreement
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I
have
acted as counsel for PNM Resources, Inc., a New Mexico corporation (the
“Company”), in connection with the issuance and sale by the Company of 5,000,000
shares of the common stock of the Company, no par value per share (the “Stock”)
pursuant to that certain Underwriting Agreement dated as of December 6, 2006
between the Company and the Underwriters named therein (the “Agreement”).
Capitalized terms used herein which are defined in the Agreement have the
meanings set forth in the Agreement, unless otherwise defined
herein.
This
opinion letter is delivered to you at the request of the Company pursuant
to
Section 7(d) of the Agreement.
In
rendering the opinions set forth below, I have reviewed and examined the
Agreement, the Registration Statement, the Preliminary Prospectus, the
Prospectus and each Issuer Free Writing Prospectus and such other documents
as I
have deemed necessary to render such opinions. I have also examined originals
or
copies, certified or otherwise identified to my satisfaction, of the articles
of
incorporation and the bylaws or other organizational documents of the Company
and each Significant Subsidiary, resolutions of the Board of Directors of
the
Company and of the pricing committee thereof, and certificates of public
officials concerning the legal existence and/or good standing of the Company
and
its Significant Subsidiaries. In addition, I have examined such other records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company
and its Significant Subsidiaries, and have made such inquiries of such officers
and representatives, as I have deemed relevant and necessary as a basis for
the
opinions hereinafter set forth.
As
to
questions of fact material to such opinions, I have, when relevant facts
were
not independently established, relied upon certificates of the Company and
of
its officers, upon certificates and comparable documents of public officials,
and upon statements in the Registration Statement, the Preliminary Prospectus,
the Prospectus and each Issuer Free Writing Prospectus.
B-1-1
In
making
the examinations of the Agreement and the other documents described above,
I
have assumed the genuineness of all signatures (other than the signatures
of the
Company), the legal capacity of all natural persons, the authenticity of
all
documents submitted to me as originals, the conformity to original documents
of
all documents submitted to me as certified or photostatic copies (including
telecopies) and the authenticity of the originals of such documents and the
correctness of all statements of fact contained in all such original documents.
No opinion is expressed regarding compliance with covenants in any agreement
to
which the Company or any of its subsidiaries is a party incorporating
calculations of a financial or accounting nature. I have also assumed the
validity and constitutionality of each relevant statute, rule, regulation
and
agency covered by this opinion letter.
Based
upon the foregoing and subject to and limited by the qualifications stated
herein, I am of the opinion that:
(i) The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of New Mexico, with full corporate
power and authority to own its properties and conduct its business as described
in the most recent Preliminary Prospectus and the Prospectus and to enter
into
and to perform its obligations under, or as contemplated by, the Agreement.
The
Company is duly qualified to do business as a foreign corporation in good
standing under the laws of each jurisdiction which requires such qualification
where the failure to be so qualified would, individually, or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ii) Each
of
Public Service Company of New Mexico, a New Mexico corporation, Texas-New
Mexico
Power Company, a Texas corporation, TNP Enterprises, Inc., a Texas corporation,
First Choice Power, L.P., a Texas limited partnership, First Choice Power
Special Purpose, L.P., a Texas limited partnership and Altura Power L.P.,
a
Texas limited partnership has been duly incorporated or organized with full
power and authority to own its properties and conduct its business as described
in the Prospectus. Each Significant Subsidiary is validly existing as a
corporation or other business entity in good standing under the laws of the
jurisdiction in which it is chartered or organized. Each Significant Subsidiary
is duly qualified to do business as a foreign corporation or other business
entity and is in good standing under the laws of each jurisdiction which
requires such qualification, where the failure to be so qualified would,
individually, or in the aggregate, reasonably be expected to have a Material
Adverse Effect. In giving the opinions in the second sentence of this paragraph
(ii), I have relied solely on the certificates of recent dates issued by
the
jurisdiction of incorporation or organization of each respective Significant
Subsidiary as to the continued existence and good standing of each Significant
Subsidiary in its jurisdiction of incorporation or organization listed in
Exhibit A hereto and no other investigation or inquiry with respect thereto
has
been made. In giving the opinion in the third sentence of this paragraph
(ii) as
to the due qualification and good standing of each Significant Subsidiary
as a
foreign entity, I have relied solely on the certificates of good standing
issued
by the jurisdiction where each Significant Subsidiary is qualified to do
business as a foreign entity listed in Exhibit A hereto and no other
investigation or inquiry with respect thereto has been made.
(iii)
The
Company has an authorized capitalization as set forth in each of the most
recent
Preliminary Prospectus and the Prospectus.
B-1-2
(iv) All
of
the issued and outstanding shares of capital stock or equivalent equity rights
of each Significant Subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable, and (except for outstanding
preferred stock of Public Service Company of New Mexico, which is owned by
third
parties) are owned directly or indirectly by the Company, and are, to my
knowledge after reasonable inquiry, free from liens, encumbrances and defects
of
title.
(v) Neither
the execution delivery and performance of the Agreement by the Company, the
issue and sale of the Stock, the compliance by the Company with the Agreement,
nor the consummation of the transactions therein contemplated and the
application of the proceeds from the sale of Stock as described under “Use of
Proceeds” in each of the most recent Preliminary Prospectus and Prospectus, will
(i) conflict with, result in a breach or violation of, or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of
its Significant Subsidiaries pursuant to, any statute, law, rule, regulation
or,
to my knowledge after reasonable inquiry, judgment, order or decree applicable
to the Company or any of its Significant Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its Significant Subsidiaries
or
any of its or their properties or (ii) conflict with, result in a breach
or
violation of, or imposition of any lien, charge or encumbrance upon any property
or assets of the Company and its subsidiaries, or constitute a default under
any
indenture, mortgage, deed of trust, loan agreement, license or other agreement
or instrument known to me after reasonable inquiry to which the Company or
any
of its Significant Subsidiaries is a party or by which the Company or any
of its
Significant Subsidiaries is subject.
(vi) To
my
knowledge after reasonable inquiry, and except as described in each of the
most
recent Preliminary Prospectus and the Prospectus, (A) no action, suit or
proceeding by or before any court or governmental agency, authority or body
or
any arbitrator involving the Company or any of its Significant Subsidiaries
or
its or their property is pending or threatened that (1) could reasonably
be
expected to have a material adverse effect on the performance of the Agreement
or the consummation of any of the transactions contemplated thereby or (2)
could
reasonably be expected to have a Material Adverse Effect; and (B) no labor
disturbance by or dispute with the employees of the Company exists or is
threatened or is imminent that could reasonably be expected to have a Material
Adverse Effect.
(vii) The
statements set forth in the most recent Preliminary Prospectus and the
Prospectus under the caption “Description of Capital Stock,” insofar as they
purport to constitute a summary of the terms of the securities, are accurate
summaries in all material respects.
I
am a
member of the Bar of the State of New Mexico, and, except as to the opinion
provided in paragraph (ii) above as to the due incorporation or organization
of
each Significant Subsidiary incorporated or organized in the State of Texas,
as
to which I am relying on [name], [title] of [the Company] who is an expert
on
the laws of the State of Texas, for purposes of this opinion, do not hold
myself
out as an expert on the laws of any jurisdiction other than the State of
New
Mexico and express no opinion as to any choice of law matters nor as to,
or the
effect or applicability of, any laws other than the laws of the State of
New
Mexico, except that I express no opinion as to the applicability of, or
compliance with, New Mexico “blue sky” or state securities laws. The opinions
herein are expressed as of the date hereof, and I assume no
obligation
B-1-3
to
revise, update or supplement such opinions to reflect any change in any fact
or
circumstance that hereafter comes to my attention, or any change in law that
may
hereafter occur, whether by legislative action, judicial decision, or in
any
other manner. This opinion letter is furnished only to you in connection
with
the contemplated transactions and is solely for your benefit. This opinion
letter may not be used, relied upon, circulated, quoted or otherwise referred
to
for any purpose without my prior written consent (including by any person
who
acquires the Stock from the Underwriters), except as may be required by
applicable law or regulation.
Very
truly yours,
By
Xxxxxxx
X. Xxxxx
Associate
General Counsel
PNM
Resources, Inc.
X-0-0
XXXXXXX
X-0
FORM
OF OPINION OF XXXXXXXX XXXXXXX LLP
December
[12], 2006
Xxxxxx
Brothers Inc.
As
Representative of the Several Underwriters
named
in
Schedule 1 to the Underwriting Agreement
c/x
Xxxxxx Brothers Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
We
have
acted as counsel for PNM Resources, Inc., a New Mexico corporation (the
“Company”), in connection with the issuance and sale by the Company of 5,000,000
shares of the common stock of the Company, no par value per share (the “Stock”)
pursuant to that certain Underwriting Agreement dated as of December 6, 2006
between the Company and the Underwriters named therein (the “Agreement”).
Capitalized terms used herein which are defined in the Agreement have the
meanings set forth in the Agreement, unless otherwise defined
herein.
This
opinion letter is delivered to you at the request of the Company pursuant
to
Section 7(d) of the Agreement.
In
rendering the opinions set forth below, we have reviewed and examined the
Agreement, the Registration Statement, the Preliminary Prospectus, the
Prospectus and each Issuer Free Writing Prospectus and such other documents
as
we have deemed necessary to render such opinions. We have also examined
originals or copies, certified or otherwise identified to our satisfaction,
of
the articles of incorporation and the bylaws or other organizational documents
of the Company, FCP Enterprises, Inc., a Delaware corporation (“FCPE”), Altura
Energy, LLC, a Delaware limited liability company (“AE”) and resolutions of the
Board of Directors of the Company and the pricing committee thereof. In
addition, we have examined such other records, agreements, documents and
other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth.
As
to
questions of fact material to such opinions, we have, when relevant facts
were
not independently established, relied upon certificates of the Company and
of
its officers, upon certificates and comparable documents of public officials,
and upon statements in the Registration Statement, the Preliminary Prospectus,
the Prospectus and each Issuer Free Writing
B-2-1
Prospectus.
As
to all
matters of New Mexico law, including the opinion set out in paragraph 2 below,
to the extent that it relates to New Mexico law, we are relying exclusively
on
the opinion letter of Xxxxxxx X. Xxxxx, Associate General Counsel, SEC Reporting
and Corporate Transactions, of the Company, dated December [12],
2006.
As used
herein, the phrase “to the best of our knowledge” means knowledge based upon and
limited to the representations and warranties of the Company contained in
the
Agreement and in the documents delivered by the Company pursuant to the
Agreement, inquiries of an appropriate officer of the Company whom we have
determined is likely to have personal knowledge of the matters covered by
the
opinion, and the current conscious awareness of facts of the attorneys currently
practicing law with our firm who had involvement in the transaction contemplated
by the Agreement.
In
making
the examinations of the Agreement and the other documents described above,
we
have assumed the genuineness of all signatures (other than the signatures
of the
Company), the legal capacity of all natural persons, the authenticity of
all
documents submitted to us as originals, the conformity to original documents
of
all documents submitted to us as certified or photostatic copies (including
telecopies) and the authenticity of the originals of such documents and the
correctness of all statements of fact contained in all such original documents.
No opinion is expressed regarding compliance with covenants in any agreement
to
which the Company or any of its subsidiaries is a party incorporating
calculations of a financial or accounting nature. We have also assumed the
due
authorization, execution and delivery of such documents by parties other
than
the Company and the validity and constitutionality of each relevant statute,
rule, regulation and agency covered by this opinion letter.
Based
upon the foregoing and subject to and limited by the qualifications stated
herein, we are of the opinion that:
(1) Each
of
FCPE and AE have been duly incorporated or organized with full power and
authority to own its properties and conduct its business as described in
the
Prospectus.
(2)
The
shares of Stock have been duly authorized for issuance and sale pursuant
to the
Agreement and when issued and delivered by the Company pursuant to this
Agreement will be validly issued, fully paid and non-assessable and will
not be
subject to any preemptive or other similar rights.
(3) The
Agreement has been duly and validly authorized, executed and delivered by
the
Company.
(4) None
of
the execution, delivery and performance of the Agreement by the Company,
the
issue and sale of the Stock and the consummation of the transactions
contemplated by the Agreement and the application of the proceeds from the
sale
of the Stock as described under “Use of Proceeds” in each of the most recent
Preliminary Prospectus and the Prospectus will
conflict with, result in a breach or violation or imposition of any lien,
charge
or encumbrance upon any property or assets of the Company or any of its
Significant Subsidiaries pursuant to, (A) the charter, bylaws, or other
organizational documents of the Company or any of its Significant Subsidiaries
or (B) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its Significant
Subsidiaries is a party or bound or to which its or their property is subject
and which is filed as an exhibit to the Company’s most recent Annual Report on
Form 10-K filed with the Commission.
B-2-2
(5) No
consent, approval, authorization, filing with or order of any court or
governmental agency or body is required to be obtained by the Company for
the
solicitation of offers to purchase the Stock, the issue and sale of the Stock
or
the consummation by the Company of the transactions contemplated by this
Agreement, except such as have been obtained under the Securities Act and
such
as may be required under the blue sky laws of any jurisdiction (as to which
we
do not express any opinion) in connection with the sale and distribution
of the
Stock in the manner contemplated in the Agreement and in the
Prospectus.
(6) The
Registration Statement became effective under the Securities Act as of the
date
it was filed with the Commission, and the Prospectus was filed with the
Commission pursuant to Rule 424(b) under the Securities Act on December [7],
2006. To the best of our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that
purpose
is pending or threatened.
(7) (A)
The
Registration Statement, on the latest Effective Date and on the applicable
Delivery Date, and (B) the Prospectus, when filed with the Commission pursuant
to Rule 424(b) and on the applicable Delivery Date, (except in each case
as to
financial statements and other financial or statistical data contained or
incorporated by reference therein, upon which such counsel need not pass),
complied as to form in all material respects with the requirements of the
Securities Act and the respective rules and regulations of the Commission
thereunder; each document incorporated therein by reference as originally
filed
pursuant to the Exchange Act (except as to financial statements and other
financial or statistical data contained or incorporated by reference therein,
upon which we do not express any opinion) complied as to form when so filed
in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(8) The
statements made in each of the most recent Preliminary Prospectus and the
Prospectus under the caption “Certain United States Federal Income Tax
Consequences,” insofar as they purport to constitute summaries of matters of
United States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in
all
material respects.
(9) The
Company is not and after the application of the proceeds from the sale of
the
Stock as described in the Prospectus, will not be, an “investment company,” or
an entity “controlled” by an investment company, as such terms are defined in
the Investment Company Act of 1940, as amended.
B-2-3
* * * *
We
have
participated in conferences with officers and other representatives of
the
Company at which the contents of the Registration Statement, the Prospectus,
the
Preliminary Prospectus and related matters were discussed and we have consulted
with officers and other employees of the Company to inform them of the
disclosure requirements under the Securities Act. We have
examined various reports, records, contracts and other documents of the
Company
and orders and instruments of public officials, which our investigation
led us
to deem pertinent. In addition, we participated in one or more due diligence
conferences with representatives of the Company and attended the closing
at
which the Company satisfied the conditions contained in Section 7 of the
Agreement. We have not, however, undertaken to make any independent review
of
other records of the Company which our investigation did not lead us to
deem
pertinent. As to the statistical statements in the most recent Preliminary
Prospectus, Prospectus and Registration Statement (which includes the documents
incorporated by reference therein), we have relied solely on the officers
of the
Company. We accordingly assume no responsibility for the accuracy, completeness
or fairness of the statements contained in the most recent Preliminary
Prospectus, the Prospectus or the Registration Statement, except as specifically
stated in numbered opinion (7) above, and we have not made any independent
check
or verification thereof. But such conferences, consultation, examination
and
attendance disclosed to us no information with respect to such other matters
that gives us reason to believe that and, on the basis of the foregoing,
no
facts have come to our attention which have led us to believe that (i)
the
Registration Statement, as of the Effective Date and as of December 6,
2006,
contained or contains any untrue statement of a material fact or omitted
or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein not misleading, (ii) the Prospectus, as of
its date
and as of the date hereof, contained or contains any untrue statement of
a
material fact or omits to state a material fact necessary in order to make
the
statements therein, in light of the circumstances under which they were
made,
not misleading, or (iii) the most recent Preliminary Prospectus, together
with
the Issuer Free Writing Prospectuses in the Disclosure Package, as of the
Applicable Time, contained or contains any untrue statement of a material
fact
or omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; in each case, except with respect to the financial statements,
any
pro forma financial information and schedules and other financial or statistical
data included in or incorporated by reference in the Registration Statement,
the
Prospectus, the most recent Preliminary Prospectus and the Issuer Free
Writing
Prospectus in the Disclosure Package, as to which we express no
opinion.
The
Agreement is governed by the laws of the State of New York. We express no
opinion as to, or the effect or applicability of, any laws other than the
laws
of the State of New York, the federal laws of the United States of America
and,
in the case of the opinion in paragraph (1) above relating to FCPE and AE,
the
general corporate laws of the State of Delaware. We express no opinion as
to the
applicability of, or compliance with, any state securities or blue sky
laws.
The
opinions herein are expressed as of the date hereof, and we assume no obligation
to revise, update or supplement such opinions to reflect any change in any
fact
or circumstance that hereafter comes to our attention, or any change in law
that
may hereafter occur, whether by legislative action, judicial decision, or
in any
other manner. This opinion letter is furnished only to you and the underwriters
in connection with the contemplated transactions and is solely for your and
the
underwriters’ benefit. This opinion letter may not be used, relied upon,
circulated, quoted or otherwise referred to for any purpose without our prior
written consent (including by any person who acquires the Stock from the
Underwriters), except as may be required by applicable law or
regulation.
Very
truly yours,
B-2-4
