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EXHIBIT 10.5
$310,600,000
CEDAR BRAKES I, L.L.C.
8.50% SENIOR SECURED BONDS DUE FEBRUARY 15, 2014
PURCHASE AGREEMENT
September 20, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Cedar Brakes I, L.L.C., a Delaware limited liability
company (the "COMPANY"), proposes, subject to the terms and conditions stated
herein, to issue and sell to Credit Suisse First Boston Corporation, as initial
purchaser (the "PURCHASER"), U.S.$310,600,000 principal amount of its 8.50%
Senior Secured Bonds due February 15, 2014 (the "SECURITIES") to be issued under
an indenture, dated as of September 26, 2000 (the "INDENTURE"), between the
Company and Bankers Trust Company, as Trustee. The United States Securities Act
of 1933 is herein referred to as the "SECURITIES ACT."
The Company hereby agrees with the Purchaser as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchaser that:
(a) A preliminary offering circular dated September 7, 2000
(as it may be amended or supplemented, the "PRELIMINARY OFFERING
CIRCULAR") and an offering circular dated September 21, 2000 (as it may
be amended or supplemented, the "OFFERING CIRCULAR" and, together with
the Preliminary Offering Circular, the "OFFERING DOCUMENT") relating to
the Securities have been prepared by the Company. On the date of this
Agreement, the Offering
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Document does not include any 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. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon
written information furnished to the Company by the Purchaser
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b) hereof.
(b) The Company has been duly formed and is an existing limited
liability company in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering
Document; and the Company is duly qualified to do business as a foreign
company in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except when the failure to so qualify would not
have a material adverse effect on the Company.
(c) The Indenture has been duly authorized by the Company; the
Securities have been duly authorized; and when the Securities are
delivered and paid for pursuant to this Agreement on the Closing Date
(as defined below), the Indenture will have been duly executed and
delivered by the Company, such Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Offering Document in all material respects and
the Indenture and such Securities will constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(d) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement or the
Registration Rights Agreement dated the date hereof, between the
Company and the Purchaser (the "REGISTRATION RIGHTS AGREEMENT"), except
for (i) the filing with the Commission of the Exchange Offer
Registration Statement or the Shelf Registration Statement (each as
defined in the Registration Rights Agreement), (ii) the order of the
Commission declaring such registration statement effective, (iii)
approval by the New Jersey Bureau of Public Utilities of the Amended
and Restated Power Purchase Agreement, and (iv) the approval by the
Federal Energy Regulatory Commission pursuant to Section 205 of the
Federal Power Act of 1920, as amended (the "FPA") for
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the rates to be charged by the Company under the Amended and Restated
Power Purchase Agreement.
(e) The execution, delivery and performance of the Indenture,
this Agreement and the Registration Rights Agreement, and the issuance
and sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or any
of its properties, or any agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of their
properties of the Company is subject, or the certificate of formation
or limited liability company agreement of the Company, and the Company
has full power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement.
(f) This Agreement and the Registration Rights Agreement have been
duly authorized, executed and delivered by the Company.
(g) Except as disclosed in the Offering Document, the Company has
good and marketable title to all assets owned by it, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by it.
(h) The Company possesses adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary
to conduct the business now operated by it and has not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to
the Company, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business,
properties or results of operations of the Company ("MATERIAL ADVERSE
EFFECT").
(i) Except as disclosed in the Offering Document, the Company is not
in violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS"), does not own or operate any real
property contaminated with any substance that is subject to any
environmental laws, is not liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any
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environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a Material Adverse Effect;
and the Company is not aware of any pending investigation which might
lead to such a claim.
(j) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company
or any of its properties that, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse Effect,
or would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture, this Agreement or the
Registration Rights Agreement, or which are otherwise material in the
context of the sale of the Securities; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge,
contemplated.
(k) The financial statements included in the Offering Document
present fairly the financial position of the Company as of the date
shown and, except as otherwise disclosed in the Offering Document, such
financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied
on a consistent basis.
(l) Except as disclosed in the Offering Document, since the date of
the latest audited financial statements included in the Offering
Document there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company, and, except as disclosed in or contemplated
by the Offering Document, there has been no dividend or distribution of
any kind declared, paid or made by of the Company on any class of its
capital stock.
(m) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT"); and the
Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in
the Offering Document, will not be an "investment company" as defined
in the Investment Company Act.
(n) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Securities are listed on
any national securities exchange registered under Section 6 of the
United States
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Securities Exchange Act of 1934 ("EXCHANGE ACT") or quoted in a U.S.
automated inter-dealer quotation system.
(o) Assuming the accuracy of the representations of the Purchaser
herein, the offer and sale of the Securities in the manner contemplated
by this Agreement will be exempt from the registration requirements of
the Securities Act by reason of Section 4(2) thereof, Rule 144A
thereunder and Regulation S thereunder; and it is not necessary to
qualify an indenture in respect of the Securities under the United
States Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT").
(p) Neither the Company nor any of its affiliates, nor any person
acting on its or their behalf (i) has, within the six-month period
prior to the date hereof, offered or sold in the United States or to
any U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Securities or any security of the same class or
series as the Securities or (ii) has offered or will offer or sell the
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S ("REGULATION S") under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(c) of Regulation S. The Company and its affiliates
and any person acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S. The
Company has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Securities except
for this Agreement.
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Company all of the
Securities, at a purchase price of 99.125% of the principal amount thereof plus
accrued interest from September 26, 2000 to the Closing Date (as hereinafter
defined).
The Company will deliver against payment of the purchase price the
Securities to be offered and sold by the Purchaser in reliance on Regulation S
(the "REGULATION S SECURITIES") in the form of one or more permanent global
Securities in registered form without interest coupons (the "REGULATION S GLOBAL
SECURITIES") which will be deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") for the respective accounts of the DTC
participants for Xxxxxx Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System
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("EUROCLEAR"), and Clearstream Bankings, societe anonyme ("CLEARSTREAM
LUXEMBOURG") and registered in the name of Cede & Co., as nominee for DTC. The
Company will deliver against payment of the purchase price the Securities to be
purchased by the Purchaser hereunder and to be offered and sold by the Purchaser
in reliance on Rule 144A under the Securities Act (the "144A SECURITIES") in the
form of one permanent global security in definitive form without interest
coupons (the "RESTRICTED GLOBAL SECURITIES") deposited with the Trustee as
custodian for DTC and registered in the name of Cede & Co., as nominee for DTC.
The Regulation S Global Securities and the Restricted Global Securities shall be
assigned separate CUSIP numbers. The Restricted Global Securities shall include
the legend regarding restrictions on transfer set forth under "Transfer
Restrictions" in the Offering Document. Until the termination of the restricted
period (as defined in Regulation S) with respect to the offering of the
Securities, interests in the Regulation S Global Securities may only be held by
the DTC participants for Euroclear and Clearstream Luxembourg. Interests in any
permanent global Securities will be held only in book-entry form through
Euroclear, Clearstream Luxembourg or DTC, as the case may be, except in the
limited circumstances described in the Offering Document.
Payment for the Regulation S Securities and the 144A Securities shall
be made by the Purchaser in Federal (same day) funds by wire transfer to an
account of the Company at a bank designated by the Issuer acceptable to the
Purchaser at the office of Xxxxxxxxxx & Xxxxx LLP at 10:00 A.M., (New York
time), on September 26, 2000 or at such other time not later than ten (10) full
business days thereafter as the Purchaser and the Company determine, such time
being herein referred to as the "CLOSING DATE", against delivery to the Trustee
as custodian for DTC of (i) the Regulation S Global Securities representing all
of the Regulation S Securities for the respective accounts of the DTC
participants for Euroclear and Clearstream, Luxembourg and (ii) the Restricted
Global Securities representing all of the 144A Securities. The Regulation S
Global Securities and the Restricted Global Securities will be made available
for checking at the above office of Xxxxxxxxxx & Xxxxx LLP at least 24 hours
prior to the Closing Date.
Notwithstanding the foregoing, any Securities sold to Institutional
Accredited Investors (as hereinafter defined) pursuant to Section 4(c) shall be
issued in definitive, fully registered form and shall bear the legend relating
thereto set forth under "Transfer Restrictions" in the Offering Document, but
shall be paid for in the same manner as any Securities to be purchased by the
Purchaser hereunder and to be offered and sold by it in reliance on Rule 144A
under the Securities Act.
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4. Representations by Purchaser; Resale by Purchaser.
(a) The Purchaser represents and warrants to the Company that it is
an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) The Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S or pursuant to an
exemption from the registration requirements of the Securities Act. The
Purchaser represents and agrees that it has offered and sold the
Securities, and will offer and sell the Securities (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 or Rule 144A under the Securities Act ("RULE
144A"). Accordingly, neither the Purchaser nor its affiliates, nor any
persons acting on its or their behalf, have engaged or will engage in
any directed selling efforts with respect to the Securities, and the
Purchaser, its affiliates and all persons acting on its or their behalf
have complied and will comply with the offering restrictions
requirement of Regulation S and Rule 144A. The Purchaser agrees that,
at or prior to confirmation of sale of the Securities, other than a
sale pursuant to Rule 144A, the Purchaser will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases the Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "SECURITIES ACT") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the date of the commencement of the offering and
the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meanings given to them by
Regulation S."
Terms used in this subsection (b) which are defined in Regulation S
have the meanings given to them therein.
(c) The Purchaser may offer and sell the Securities in definitive,
fully registered form to a limited number of institutions, each of
which is reasonably believed by the Purchaser to be an "accredited
investor" within the meaning of Rule 501(a)(1),(2), or (3) under the
Securities Act or an entity in
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which all of the equity owners are accredited investors within the
meaning of Rule 501(a)(1),(2), or (3) under the Securities Act (each,
an "INSTITUTIONAL ACCREDITED INVESTOR"); provided that each such
Institutional Accredited Investor executes and delivers to the
Purchaser and the Company, prior to the consummation of any sale of
Securities to such Institutional Accredited Investor, a purchaser's
letter in substantially the form attached hereto as Annex A (a
"PURCHASER'S LETTER").
(d) The Purchaser agrees that it and each of its affiliates has not
entered and will not enter into any contractual arrangement with
respect to the distribution of the Securities except with the prior
written consent of the Company.
(e) The Purchaser agrees that it and each of its affiliates have not
and will not offer or sell the Securities in the United States by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act, including, but not
limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising. The Purchaser agrees, with respect to resales made
in reliance on Rule 144A of any of the Securities, to deliver either
with the confirmation of such resale or otherwise prior to settlement
of such resale a notice to the effect that the resale of such
Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(f) The Purchaser represents and agrees that (i) it has not offered
or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has complied and
will comply with all applicable provisions of the Financial Services
Xxx 0000 with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with the
issue of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Xxx 0000 (Investment
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Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
Purchaser that:
(a) The Company will advise the Purchaser promptly of any proposal
to amend or supplement the Offering Document and will not effect such
amendment or supplementation without the Purchaser's consent, which
consent will not be unreasonably withheld or delayed. If, at any time
prior to the completion of the resale of the Securities by the
Purchaser, any event occurs as a result of which the Offering Document
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, not misleading, the Company promptly will notify
the Purchaser of such event and promptly will prepare, as reasonably
necessary, at its own expense, an amendment or supplement which will
correct such statement or omission. Neither the Purchaser's consent to,
nor its delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 6.
(b) The Company will furnish to the Purchaser copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as the Purchaser requests, and the Company will
furnish to the Purchaser on the date hereof two copies of the Offering
Document signed by a duly authorized officer of the Company, one of
which will include the independent accountants' reports therein
manually signed by such independent accountants. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the
Company will promptly furnish or cause to be furnished to the Purchaser
and, upon request of holders and prospective purchasers of the
Securities, to such holders and purchasers, copies of the information
required to be delivered to holders and prospective purchasers of the
Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Securities. The
Company will pay the expenses of printing and distributing to the
Purchaser, such holders and prospective purchasers all such documents.
(c) The Company will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment
under the
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applicable laws of such jurisdictions in the United States and Canada
as the Purchaser reasonably designates and the Company agrees to and
will continue such qualifications in effect so long as required for the
resale of the Securities by the Purchaser, provided that the Company
will not be required to qualify as a foreign corporation or dealer in
Securities or to file a general consent to service of process in any
such jurisdiction or subject itself to taxation in any jurisdiction in
which it is not otherwise so subject.
(d) During the period of two years hereafter, the Company will
furnish to the Purchaser, as soon as available after the end of each
fiscal year, a copy of its annual report to equity-holders for such
year; and during the period of two years hereafter, the Company will
furnish to the Purchaser (i) as soon as available, a copy of each
description of reports, notices or communications sent to
securityholders, and (ii) from time to time, such other information
concerning the Company as the Purchaser may reasonably request.
(e) During the period of two years after the Closing Date or until
the Securities are registered under the Securities Act, the Company
will, upon request, furnish to the Purchaser and any holder of
Securities a copy of the restrictions on transfer applicable to the
Securities.
(f) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144 under the Securities Act) to, resell any of the Securities
that have been reacquired by any of them.
(g) During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act.
(h) The Company will pay all expenses incidental to the performance
of its obligations under this Agreement, the Indenture and the
Registration Rights Agreement, including (i) the fees and expenses of
the Trustee and its counsel; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Securities and, as applicable, the Exchange Securities (as defined in
the Registration Rights Agreement), the preparation and printing of
this Agreement, the Registration Rights Agreement, the Securities, the
Indenture, the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale
and delivery of the Securities and as applicable, the Exchange
Securities; (iii) the cost of listing the Securities and any expenses
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incidental thereto; (iv) the cost of any advertising approved by the
Company in connection with the issue of the Securities; (v) any
reasonable expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Securities or the
Exchange Securities for sale under the laws of such jurisdictions in
the United States and Canada, as the Purchaser designates and the
printing of memoranda relating thereto; (vi) any fees charged by
investment rating agencies for the rating of the Securities or the
Exchange Securities; and (vii) reasonable expenses incurred in
distributing preliminary offering circulars and the Offering Document
(including any amendments and supplements thereto) to the Purchaser.
The Company will also pay or reimburse the Purchaser (to the extent
incurred by them) for all travel expenses of the Purchaser and the
Company's officers and employees and any other expenses of the
Purchaser and the Company in connection with attending or hosting
meetings with prospective purchasers of the Securities from the
Purchaser.
(i) In connection with the offering, until the Purchaser shall have
notified the Company of the completion of the resale of the Securities,
neither the Company nor any of its affiliates has or will, either alone
or with one or more other persons, bid for or purchase for any account
in which it or any of its affiliates has a beneficial interest in any
Securities or attempt to induce any person to purchase any Securities;
and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or
of raising the price of, the Securities.
(j) For a period of 180 days after the date of the initial offering
of the Securities by the Purchaser, the Company will not, without the
prior written consent of the Purchaser, offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any United
States dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date of
issue (other than the Securities). The Company will not at any time
offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act or the safe harbor of
Regulation S thereunder to cease to be applicable to the offer and sale
of the Securities.
6. Conditions of the Obligation of the Purchaser. The obligation of the
Purchaser to purchase and pay for the Securities will be subject to the accuracy
of the representations and warranties made by the Company herein, to the
accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the
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performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Purchaser shall have received a letter, dated the date of
this Agreement, of PricewaterhouseCoopers LLP in form and substance
satisfactory to the Purchaser concerning the financial information with
respect to the Company set forth in the Offering Document.
(b) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) a change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as would, in the judgment of the Purchaser, be
likely to prejudice materially the success of the proposed issue, sale
or distribution of the Securities, whether in the primary market or in
respect of dealings in the secondary market, or (ii) (A) any change, or
any development or event involving a prospective change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries, taken as an enterprise,
which, in the judgment of the Purchaser, is material and adverse and
makes it impractical or inadvisable to proceed with the offering or the
sale of and payment for the Securities; (B) any downgrading in the
rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating of
any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (C) any material suspension or
material limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (D) any banking
moratorium declared by U.S. Federal or New York authorities; or (E) any
outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of the Purchaser, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the offering or sale of and payment for
the Securities.
(c) The Purchaser shall have received opinions, dated the Closing
Date, from each of Xxxxxxxxxx & Xxxxx LLP, counsel for the Company, and
in-house counsel for the Company, with customary and appropriate
qualifications and exceptions, which taken together provide that:
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(i) The Company has been duly formed and is an
existing limited liability company in good standing under the
laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign company
in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification;
(ii) The Indenture has been duly authorized by the
Company; the Securities have been duly authorized; and when
the Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the
Indenture will have been duly executed and delivered by the
Company, such Securities will have been duly executed,
authenticated, issued and delivered and will conform to the
description thereof contained in the Offering Document in all
material respects and the Indenture and such Securities will
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(iii) The Company is not or, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Offering Document,
will not be an "investment company" as defined in the
Investment Company Act.
(iv) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement and the Registration Rights
Agreement in connection with the issuance or sale of the
Securities by the Company, except such as may be required
under state securities laws, and except for (i) the filing
with the Commission of the Exchange Offer Registration
Statement or the Shelf Registration Statement (each as defined
in the Registration Rights Agreement), (ii) the order of the
Commission declaring such registration statement effective,
(iii) approval by the New Jersey Bureau of Public Utilities of
the Amended and Restated Power Purchase Agreement, the
Interconnection Agreement, the Gas Call Agreement and the
Capacity Release Agreement and (iv) the approvals
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by the Federal Energy Regulatory Commission (A) pursuant to
Section 205 of the FPA for the rates to be charged by the
Company under the Amended and Restated Power Purchase
Agreement;
(v) Except as disclosed in the Offering Document,
there are no pending actions, suits or proceedings against or
affecting the Company or any of its properties that, if
determined adversely to the Company, would individually or in
the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to
perform its obligations under the Indenture, this Agreement or
the Registration Rights Agreement, or which are otherwise
material in the context of the sale of the Securities; and no
such actions, suits or proceedings are threatened or, to the
best of the Company's knowledge, contemplated;
(vi) The execution, delivery and performance of the
Indenture, this Agreement and the Registration Rights
Agreement and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body
or any court having jurisdiction over the Company or any of
its properties, or any agreement or instrument to which the
Company is a party or by which the Company is bound or to
which any of the properties of the Company is subject, or the
charter or limited liability agreement of the Company, and the
Company has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement;
(vii) Nothing has come to the attention of such
counsel that would lead them to believe that the Offering
Circular or any amendment or supplement thereto as of the date
hereof and as of the Closing Date, contained any untrue
statement of a material fact necessary to make the statements
therein not misleading; the descriptions in the Offering
Circular of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present
the information shown; it being understood that such counsel
need express no opinion as to the financial statements or
other financial or related statistical data contained in the
Offering Circular;
(viii) This Agreement and the Registration Rights
Agreement have each been duly authorized, executed and
delivered by the Company;
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(ix) It is not necessary in connection with (i) the
offer, sale and delivery of the Securities by the Company to
the Purchaser pursuant to this Agreement or (ii) the initial
resales of the Securities by the Purchaser in the manner
contemplated by this Agreement, to register the Securities
under the Securities Act or to qualify an indenture in respect
thereof under the Trust Indenture Act.
(d) The Purchaser shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Purchaser, such opinion or
opinions, dated the Closing Date, with respect to the validity of the
Securities, the Offering Circular, the exemption from registration for
the offer and sale of the Securities by the Company to the Purchaser
and the resales by the Purchaser as contemplated hereby and other
related matters as the Purchaser may require, and of the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters, with reference to
same in the Offering Circular.
(e) The Purchaser shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers,
to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that,
subsequent to the date of the most recent financial statements in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such
certificate.
(f) The Purchaser shall have received a letter, dated the Closing
Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
the Closing Date for the purposes of this subsection.
(g) The Purchaser shall have received a letter, dated the date of
this Agreement, from El Paso Energy Corporation ("EL PASO") in the form
of Exhibit A attached hereto, regarding certain representations and
warranties of El Paso to the Purchaser.
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(h) The Purchaser shall have received a letter, dated the date
of this Agreement, from Mesquite Investors, L.L.C. ("MESQUITE") in the
form of Exhibit B attached hereto, regarding the indemnification of the
Purchaser by Mesquite.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless the Purchaser, its partners, directors and officers and each
person, if any, who controls the Purchaser within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, including any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its obligations
under Section 5(a) of this Agreement, and will reimburse the Purchaser for any
legal or other expenses reasonably incurred by the Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by the Purchaser specifically for use therein, it being understood and
agreed that the only such information consists of the information described as
such in subsection (b) below and provided, further that, with respect to any
untrue statement in or omission from the Preliminary Offering Circular, this
indemnity agreement shall not inure to the benefit of the Purchaser on account
of any loss, claim, damage, liability or action arising from the sale of any
Securities to any person by the Purchaser, to the extent that such sale was an
initial resale by the Purchaser, and if the Purchaser failed to send or give a
copy of the Offering Circular, as the same may be amended or supplemented, to
that person within the time required by the Securities Act, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in the Preliminary Offering Circular was
corrected in the Offering Circular and the Offering Circular was made available
to the Purchaser prior to the sale of the Securities.
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(a) The Purchaser will indemnify and hold harmless the Company, its
directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any
related preliminary offering circular, or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by the Purchaser specifically for use therein, and will
reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by the Purchaser consists of the following information in the
Offering Document under the caption "Plan of Distribution" in paragraph
3 and paragraphs 5 through 10; provided, however, that the Purchaser
shall not be liable for any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its
obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the
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indemnifying party will not be liable to such indemnified party under
this Section 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall,
without the prior written consent of the indemnified party (such
consent not to be unreasonably withheld), effect any settlement of any
pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action and (ii) does
not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Purchaser on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Purchaser on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Purchaser on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Purchaser from the
Company under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), the Purchaser shall not be required to contribute
any amount in excess of the
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amount by which the total price at which the Securities purchased by it
were resold exceeds the amount of any damages which the Purchaser has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Purchaser within the meaning of the Securities
Act or the Exchange Act; and the obligations of the Purchaser under
this Section 7 shall be in addition to any liability which the
Purchaser may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers, and of the Purchaser set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation or statement as to the results thereof, made by or on behalf of
the Purchaser, the Company, or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Securities. If for any reason the purchase of the Securities by the
Purchaser is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 hereof and the
respective obligations of the Company and the Purchaser pursuant to Section 7
hereof shall remain in effect; provided that, notwithstanding the foregoing, in
such circumstances the Company shall not be obligated to reimburse the Purchaser
for its out-of pocket expenses (excluding fees and disbursements of counsel in
excess of $200,000); and provided further, that it the purchase of the
Securities by the Purchaser is not consummated solely because of the occurrence
of an event specified in Section 6(b)(iii), (iv) or (v), the Company shall have
no obligation to reimburse the Purchaser for its out-of-pocket expenses
(including fees and disbursements of counsel).
9. Notices. All communications hereunder will be in writing and, if
sent to the Purchaser will be mailed, delivered or telegraphed and confirmed to
the Purchaser at Credit Suisse First Boston Corporation, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, Attention: President, with a copy to El Paso Energy Corporation at
0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: General Counsel.
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10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7 hereof, and no other person will
have any right or obligation hereunder, except that holders of Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties hereto.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably appoints CT
Corporation System, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
its authorized agent in the Borough of Manhattan in the City of New York upon
which process may be served in any such suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service to the
Company, by the person serving the same to the address provided in Section 10,
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. The Company further agrees to take any and all
action as may be necessary to maintain such designation and appointment of such
agent in full force and effect for a period of seven years from the date of this
Agreement.
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If the foregoing is in accordance with the Purchaser's understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Purchaser in accordance with its terms.
Very truly yours,
CEDAR BRAKES I, L.L.C.
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Attorney in Fact
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
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ANNEX A
FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
Cedar Brakes I, L.L.C.
El Paso Energy Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
We are delivering this letter in connection with an offering of
$310,600,000 8.50% Senior Secured Bonds due February 15, 2014 (the "SECURITIES")
of Cedar Brakes I, L.L.C., Delaware limited liability company (the "COMPANY"),
all as described in the Confidential Offering Circular (the "OFFERING CIRCULAR")
relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(l),(2) or (3) under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(l), (2) or (3) under the Securities
Act (an "INSTITUTIONAL ACCREDITED INVESTOR");
(ii) (A) any purchase of the Securities by us will be for our own
account or for the account of one or more other Institutional Accredited
Investors or a fiduciary for the account of one or more trusts, each of which is
an "accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion or
(B) we are a "bank", within the meaning of Section 3(a)(2) of the Securities
Act, or a "savings and loan association" or other institution described in
Section 3(a)(5)(A) of the Securities Act that is acquiring the Securities as
fiduciary for the account of one or more institutions for which we exercise sole
investment discretion;
A-1
23
(iii) in the event that we purchase any of the Securities, we will
acquire Securities having a minimum purchase price of not less than $100,000 for
our own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing the
Securities;
(v) we are not acquiring the Securities with a view to distribution
thereof or with any present intention of offering or selling any of the
Securities, except inside the United States in accordance with Rule 144A under
the Securities Act or outside the United States in accordance with Regulation S
under the Securities Act, as provided below; provided that the disposition of
our property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Circular relating to the
offering of the Securities and acknowledge that we have had access to such
financial and other information, and have been afforded the opportunity to ask
such questions of representatives of the Company and receive answers thereto, as
we deem necessary in connection with our decision to purchase the Securities.
We understand that the Securities are being offered in a transaction
not involving any public offering within the United States within the meaning of
the Securities Act and that the Securities have not been and will not be
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any Securities that if in the future
we decide to resell, pledge or otherwise transfer such Securities, such
Securities may be offered, resold, pledged or otherwise transferred only (i)
pursuant to an effective registration statement under the Securities Act, (ii)
inside the United States to a person who we reasonably believe is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, (iii) outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act or (iv) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available) and (v) in each
case, in accordance with any applicable securities laws of any State of the
United States or any other applicable jurisdiction. We understand that the
registrar and transfer agent for the Securities, will not be required to accept
for registration of transfer any Securities acquired by us, except upon
presentation of evidence satisfactory to the Company and the transfer agent that
the foregoing restrictions on transfer have been complied with. We further
understand that any Securities acquired by us, will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph.
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We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Date:
----------------- --------------------------------
(Name of Purchaser)
By:
-----------------------------
Name:
Title:
Address:
A-3
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EXHIBIT A
[Letter from EPEC]
26
EXHIBIT B
[Letter from Mesquite]
