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EXHIBIT 1.1
EXECUTION COPY
SUPPLEMENTAL REMARKETING AGREEMENT
May
6, 2008
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Banc
of America Securities LLC
Hearst
Tower
214
North Tryon Street
Charlotte,
North Carolina 28255
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Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
4
World Financial Center
New
York, New York 10080
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Lehman
Brothers Inc.
745
Seventh Avenue
New
York, New York 10019
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Morgan
Stanley & Co. Incorporated
1585
Broadway, Floor 32
New
York, New York 10036
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Citigroup
Global Markets Inc.
388
Greenwich Street
New
York, New York 10013
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RBC
Capital Markets Corporation
Three
World Financial Center
200
Vesey Street, 9th Floor
New
York, NY 10281
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Deutsche
Bank Securities Inc.
60
Wall Street
New
York, New York 10005
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Wachovia
Capital Markets, LLC
One
Wachovia Center, DC-6
301
South College Street
Charlotte,
North Carolina 28288
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J.P.
Morgan Securities Inc.
277
Park Avenue, 14 th
Floor
New
York, New York 10172
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Wedbush
Morgan Securities Inc.
1000
Wilshire Boulevard
Los
Angeles, California 90017
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The
Bank of New York
101
Barclay Street, 8W
New
York, New York 10286
Attention:
Corporate Trust Division – Corporate Finance
Unit
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Ladies
and Gentlemen:
This
Supplemental Remarketing Agreement is dated as of May 6, 2008
(this “ Agreement
”) by and among PNM Resources, Inc., a New
Mexico corporation (the “ Company
”), Banc of America Securities LLC, Citigroup Global
Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan
Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley
& Co. Incorporated, RBC Capital Markets Corporation,
Wachovia Capital Markets, LLC and Wedbush Morgan Securities
Inc., as the reset agents and the remarketing agents
(together, the “ Remarketing
Agents ”), and The Bank of New York, a New York
banking corporation (as successor to JPMorgan Chase Bank,
N.A.), not individually but solely as Purchase Contract Agent
(the “ Purchase
Contract Agent ”) and as attorney-in-fact of the
holders of Purchase Contracts (as defined in the Purchase
Contract and Pledge Agreement referred to
below). This Agreement amends and supplements the
Remarketing Agreement, dated as of March 30, 2005, by and
among the Company, the Remarketing Agents and the Purchase
Contract Agent.
Section
1.
Definitions
. (a)
Capitalized terms used and not defined in this Agreement shall have
the meanings set forth in the Purchase Contract and Pledge
Agreement, dated as of March 30, 2005, among the Company, the
Purchase Contract Agent and U.S. Bank Trust National Association,
as Collateral Agent, Custodial Agent and Securities Intermediary,
as amended from time to time (the “ Purchase Contract and
Pledge Agreement ”).
(b)
As
used in this Agreement, the following terms have the following
meanings:
“
Applicable
Time ” means the time on the applicable
Remarketing Date when there is a Successful Remarketing in
accordance with this Agreement.
“
Agreement
” has the meaning specified in the first paragraph of
this Agreement.
“
Additional
Notes ” means the additional Senior Notes (that
are not Remarketed Senior Notes) issued pursuant to the
Indenture, as supplemented by the First Supplemental Indenture
and the Second Supplemental Indenture, on May 16,
2008.
“
Commission
” means the Securities and Exchange
Commission.
“
Company
” has the meaning specified in the first paragraph of
this Agreement.
“
Effective
Date ” means any date as of which any part of
such registration statement or post effective amendment
thereto relating to the Remarketed Senior Notes became, or is
deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations (including pursuant
to Rule 430B of the Rules and Regulations).
“
Exchange
Act ” means the Securities Exchange Act of 1934,
as amended.
“
Final
Remarketing ” has the meaning specified in
Section 2(b).
“
Final
Remarketing Date ” has the meaning specified in
Section 2(b).
“
Final Term
Sheet ” means the term sheet prepared in
connection with the Remarketing of the Remarketed Senior Notes
and the Company’s simultaneous offering of Additional
Notes pursuant to Section 5(a)(1) of this Agreement and
substantially in the form attached in Schedule 3
hereto.
“
First
Supplemental Indenture ” means Supplemental
Indenture No. 1, dated as of March 30, 2005, to the Indenture,
between the Company and the Trustee.
“
Indenture
” means the Indenture dated as of March 15, 2005 between
the Company and the Trustee.
“
Initial
Remarketing ” has the meaning specified in
Section 2(a).
“
Initial
Remarketing Date ” has the meaning specified in
Section 2(a).
“
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
Remarketing of the Remarketed Senior Notes, including the
Final Term Sheet.
“
Material Adverse
Effect ” has the meaning specified in Section
3(j).
“
Preliminary
Prospectus ” means any prospectus 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 Remarketed Senior Notes, other than a
Prospectus.
“
Pricing
Disclosure Package ” means, as of the Applicable
Time, the most recent Preliminary Prospectus, together with
the information included on Schedule 2 and each Issuer Free
Writing Prospectus filed or used by the Company on or before
the Applicable Time, other than a road show that is an Issuer
Free Writing Prospectus under Rule 433 of the Rules and
Regulations.
“
Prospectus
” means the final prospectus, including any prospectus
supplement thereto, relating to the Remarketed Senior Notes,
as filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations.
“
Purchase
Contract and Pledge Agreement ” has the meaning
specified in Section 1(a).
“
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, and
documents incorporated by reference in, such registration
statement.
“
Remarketed
Senior Notes ” means the Senior Notes (i) issued
pursuant to the Indenture, as supplemented by the First
Supplemental Indenture and the Second Supplemental Indenture,
that are (ii) underlying the Pledged Applicable Ownership
Interests in Senior Notes and the Separate Senior Notes, if
any, subject to Remarketing as identified to the Remarketing
Agents by the Purchase Contract Agent and the Custodial Agent,
respectively, promptly after 5:00 p.m., New York City time, on
the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, and shall include: (a) the Senior
Notes underlying the Pledged Applicable Ownership Interests in
Senior Notes of the Holders of Corporate Units who have not
notified the Purchase Contract Agent prior to 5:00 p.m., New
York City time, on the seventh Business Day immediately
preceding the Purchase Contract Settlement Date of their
intention to effect a Cash Settlement of the related Purchase
Contracts pursuant to the terms of the Purchase Contract and
Pledge Agreement or who have so notified the Purchase Contract
Agent but failed to make the required cash payment prior to
5:00 p.m., New York City time, on the sixth Business Day
immediately preceding the Purchase Contract Settlement Date
pursuant to the terms of the Purchase Contract and Pledge
Agreement, and (b) the Separate Senior Notes of the holders of
Separate Senior Notes, if any, who have elected to have their
Separate Senior Notes remarketed in such Remarketing prior to
5:00 p.m., New York City time, on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date
pursuant to the terms of the Purchase Contract and Pledge
Agreement.
“
Remarketing
” means the remarketing of the Remarketed Senior Notes
pursuant to this Agreement on any Remarketing
Date.
“
Remarketing
Fee ” has the meaning specified in Section
4.
“
Remarketing
Materials ” means the Registration Statement, the
Preliminary Prospectus, the Prospectus or any other
information furnished by the Company to the Remarketing Agents
for distribution to investors in connection with the
Remarketing.
“
Remarketing
Settlement Date ” means the Purchase Contract
Settlement Date.
“
Reset
Rate ” has the meaning specified in Section
2(c).
“
Second
Remarketing ” has the meaning specified in
Section 2(b).
“
Second
Remarketing Date ” has the meaning specified in
Section 2(b).
“
Second
Supplemental Indenture ” means Supplemental
Indenture No. 2, dated as of May 16, 2008, to the Indenture,
between the Company and the Trustee.
“
Securities
” has the meaning specified in Section 10.
“
Securities
Act ” means the Securities Act of 1933, as
amended.
“
Significant
Subsidiaries ” has the meaning specified in
Section 3(j).
“
Transaction
Documents ” means this Agreement, the Remarketing
Agreement, the Purchase Contract and Pledge Agreement, the
Indenture, the First Supplemental Indenture and the Second
Supplemental Indenture, in each case as amended or
supplemented from time to time.
“
Trustee
” means The Bank of New York Trust Company, N.A. (as
successor to JPMorgan Chase Bank, N.A.), as trustee under the
Indenture.
Section
2.
Appointment and Obligations of the Remarketing Agents
. The
Company hereby appoints Banc of America Securities LLC, Citigroup
Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan
Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, RBC Capital Markets Corporation, Wachovia Capital
Markets, LLC and Wedbush Morgan Securities Inc. as the exclusive
Remarketing Agents, and, subject to the terms and conditions set
forth herein, Banc of America Securities LLC, Citigroup Global
Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities
Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated, RBC
Capital Markets Corporation, Wachovia Capital Markets, LLC and
Wedbush Morgan Securities Inc. hereby accept appointment as
Remarketing Agents, for the purpose of (i) remarketing the
Remarketed Senior Notes on behalf of the holders thereof, (ii)
determining, in consultation with the Company, in the manner
provided for herein and in the Purchase Contract and Pledge
Agreement and the Indenture, the Reset Rate for the Remarketed
Senior Notes, and (iii) performing such other duties as are
assigned to the Remarketing Agents in the Transaction
Documents.
(a)
Unless
a Special Event Redemption or a Termination Event has occurred
prior to such date, on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (the “ Initial Remarketing
Date ”), the Remarketing Agents shall use their
reasonable efforts to remarket (the “ Initial
Remarketing ”) the Remarketed Senior Notes at the
Remarketing Price.
(b)
In
the case of a Failed Remarketing on the Initial Remarketing Date
and unless a Special Event Redemption or a Termination Event has
occurred prior to such date, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date (the “
Second
Remarketing Date ”), the Remarketing Agents shall use
their reasonable efforts to remarket (the “ Second
Remarketing ”) the Remarketed Senior Notes at the
Remarketing Price. In the case of a Failed Remarketing on the
Second Remarketing Date and unless a Special Event Redemption or a
Termination Event has occurred prior to such date, on the third
Business Day immediately preceding the Purchase Contract Settlement
Date (the “ Final Remarketing
Date ”), the Remarketing Agents shall use their
reasonable efforts to remarket (the “ Final
Remarketing ”) the Remarketed Senior Notes at the
Remarketing Price. It is understood and agreed that the Remarketing
on any Remarketing Date will be considered successful and no
further attempts will be made if the resulting proceeds are at
least equal to the Remarketing Price.
(c)
In
connection with each Remarketing, the Remarketing Agents shall
determine, in consultation with the Company, the rate per annum,
rounded to the nearest one-thousandth (0.001) of one percent per
annum, that the Remarketed Senior Notes should bear (the “
Reset
Rate ”) in order for the Remarketed Senior Notes to
have an aggregate offering price equal to the Remarketing Price and
that in the sole reasonable discretion of the Remarketing Agents
will enable them to remarket all of the Remarketed Senior Notes at
the Remarketing Price in such Remarketing; provided that such
rate shall not exceed the maximum interest rate permitted by
applicable law.
(d)
If,
by 4:00 p.m., New York City time, on the applicable Remarketing
Date, (1) the Remarketing Agents are unable to remarket all of the
Remarketed Senior Notes, other than to the Company, at the
Remarketing Price pursuant to the terms and conditions hereof or
(2) the Remarketing did not occur on such Remarketing Date because
one of the conditions set forth in Section 6 hereof was not
satisfied, a Failed Remarketing shall be deemed to have occurred,
and the Remarketing Agents shall so advise by telephone (promptly
confirmed in writing) the Depositary, the Purchase Contract Agent,
the Collateral Agent and the Company. Whether or not there has been
a Failed Remarketing will be determined in the sole reasonable
discretion of the Remarketing Agents.
(e)
In
the event of a Successful Remarketing, by approximately 4:30 p.m.,
New York City time, on the applicable Remarketing Date, the
Remarketing Agents shall advise, by telephone (promptly confirmed
in writing in the case of clause (1)):
(1)
the
Depositary, the Purchase Contract Agent, the Trustee and the
Company of the Reset Rate determined by the Remarketing Agents in
such Remarketing and the number of Remarketed Senior Notes sold in
such Remarketing;
(2)
each
purchaser (or the Depositary Participant thereof) of Remarketed
Senior Notes of the Reset Rate and the number of Remarketed Senior
Notes such purchaser is to purchase;
(3)
each
such purchaser (if other than a Depositary Participant) to give
instructions to its Depositary Participant to pay the purchase
price on the Remarketing Settlement Date in same day funds against
delivery of the Remarketed Senior Notes purchased through the
facilities of the Depositary; and
(4)
each
such purchaser (or Depositary Participant thereof) that the
Remarketed Senior Notes will not be delivered until the Remarketing
Settlement Date, and, in the case of the Initial Remarketing Date
or the Second Remarketing, the Remarketing Settlement Date will be
five Business Days or four Business Days, respectively, following
the date of such Remarketing and that if such purchaser wishes to
trade the Remarketed Senior Notes that it has purchased prior to
the third Business Day preceding the Remarketing Settlement Date,
such purchaser will have to specify an alternative settlement cycle
at the time of any such trade to prevent failed
settlement.
The
Remarketing Agents shall also, if required by the Securities
Act, deliver, in conformity with the requirements of the
Securities Act, to each purchaser a Prospectus in connection
with the Remarketing.
(f)
The
proceeds from a Successful Remarketing (i) with respect to the
Senior Notes underlying the Applicable Ownership Interests in
Senior Notes that are components of the Corporate Units shall be
paid to the Collateral Agent in accordance with Section 5.02 of the
Purchase Contract and Pledge Agreement and (ii) with respect to the
Separate Senior Notes, shall be paid to the Custodial Agent for
payment to the holders of such Separate Senior Notes in accordance
with Section 5.02 of the Purchase Contract and Pledge
Agreement.
(g)
The
right of each holder of Remarketed Senior Notes to have such
Remarketed Senior Notes remarketed and sold on any Remarketing Date
shall be subject to the conditions that (i) the Remarketing Agents
conduct (A) an Initial Remarketing, (B) a Second Remarketing in the
event of a Failed Remarketing on the Initial Remarketing Date and
(C) a Final Remarketing in the event of a Failed Remarketing on the
Second Remarketing Date, each pursuant to the terms of this
Agreement, (ii) neither a Special Event Redemption nor a
Termination Event has occurred prior to such Remarketing Date,
(iii) the Remarketing Agents are able to find a purchaser or
purchasers for Remarketed Senior Notes at the Remarketing Price
based on the Reset Rate, and (iv) such purchaser or purchasers of
the Remarketed Senior Notes deliver the purchase price therefor to
the Remarketing Agents as and when required.
(h)
It
is understood and agreed that the Remarketing Agents shall not have
any obligation whatsoever to purchase any Remarketed Senior Notes,
whether in the Remarketing or otherwise, and shall in no way be
obligated to provide funds to make payment upon tender of
Remarketed Senior Notes for Remarketing or to otherwise expend or
risk its own funds or incur or to be exposed to financial liability
in the performance of its duties under this Agreement. Neither the
Company nor the Remarketing Agents shall be obligated in any case
to provide funds to make payment upon tender of the Remarketed
Senior Notes for Remarketing.
Section
3.
Representations and
Warranties of the Company . The
Company represents and warrants (i) on and as of the date any
Remarketing Materials are first distributed in connection with the
Remarketing, (ii) on and as of the Applicable Time and (iii) on and
as of the Remarketing Settlement Date, that:
(a)
Filing of Registration Statement and Preliminary Prospectus; No
Stop Order : A Registration Statement on Form S-3 (No.
333-150101) relating to the Remarketed Senior Notes (i) has
been prepared by the Company in conformity with the requirements of
the Securities Act, and the rules and regulations (the “
Rules and
Regulations ”) of the Commission thereunder;
(ii) has been filed with the Commission under the Securities
Act; and (iii) upon its filing with the Commission automatically
became and is effective under the Securities
Act. Copies of such Registration Statement and any
amendment thereto have been delivered by the Company to the
Remarketing Agents.
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 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.
(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
Remarketed Senior Notes,
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 Remarketing Settlement Date.
(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 Remarketing Settlement 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 Remarketing
Settlement 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 by the Remarketing Agents specifically for
inclusion therein, which information is specified in Section 7(d)
or in a separate letter addressing such information.
(e)
Prospectus : The Prospectus will not, as of its date and on
the Remarketing Settlement 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 by the Remarketing Agents specifically for inclusion
therein, which information is specified in Section 7(d) 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 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)
The 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 by
the Remarketing Agents specifically for inclusion therein, which
information is specified in Section 7(d) 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 Remarketed Senior Notes that would constitute
an Issuer Free Writing Prospectus without the prior written consent
of the Remarketing Agents. 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 EnergyCo, 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 EnergyCo, 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 (i) the condition (financial or
otherwise), results of operations, stockholders’ equity,
properties or business of the Company and its subsidiaries taken as
a whole or (ii) the ability of the Company to perform its
obligations under the Transaction Documents (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 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 and a 50% interest in EnergyCo, LLC, which are owned by
third parties, are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, and defects of title,
other than as listed on Schedule 1(k) attached hereto.
(l)
The Indenture, First Supplemental Indenture and Second Supplemental
Indenture : The Indenture, the First Supplemental Indenture
and the Second Supplemental Indenture have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company enforceable against the Company in
accordance with their terms, except in each case as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting
creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law). The Indenture, the
First Supplemental Indenture and the Second Supplemental Indenture
(i) have been duly qualified under the Trust Indenture Act of 1939,
as amended (the “Trust Indenture Act”), (ii) comply as
to form with the requirements of the Trust Indenture Act and (iii)
conform to the description thereof in the most recent Preliminary
Prospectus and the Prospectus.
(m)
The Remarketed Senior Notes : The Remarketed Senior Notes
have been duly authorized, issued and delivered by the Company, and
constitute valid and binding obligations of the Company, entitled
to the benefits of the Indenture, the First Supplemental Indenture
and the Second Supplemental Indenture, enforceable against the
Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting the enforcement of
creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law), and the Remarketed Senior
Notes conform to the description thereof in the Pricing Disclosure
Package and the Prospectus.
(n)
This 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.
(o)
The Purchase Contract and Pledge Agreement : The
Purchase Contract and Pledge Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or similar
laws relating to or affecting creditors’ rights generally and
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law). The Purchase Contract and Pledge Agreement
conforms to the description thereof in the most recent Preliminary
Prospectus and the Prospectus.
(p)
No Conflicts : The execution and delivery of this Agreement
and the performance of the Transaction Documents by the Company,
the issuance of the Remarketed Senior Notes, the consummation of
the transactions contemplated in the Transaction Documents and the
application of the proceeds from the sale of the Remarketed Senior
Notes as described under “Use of Proceeds” in the most
recent Preliminary Prospectus will not (i) conflict with or
result in a breach or violation of any of the terms or provisions
of, impose any lien, charge or encumbrance upon any property or
assets of the Company and its subsidiaries, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject; (ii) result
in any violation of the provisions of the charter, by-laws or other
organizational documents of the Company or any of its subsidiaries;
or (iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
any of their properties.
(q)
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 the Transaction Documents, the issuance of the
Remarketed Senior Notes, the consummation of the transactions
contemplated in the Transaction Documents and the application of
the proceeds from the sale of the Remarketed Senior Notes as
described under “Use of Proceeds” in the most recent
Preliminary Prospectus, except for the registration of the
Remarketed Senior Notes under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may
be required under applicable state securities or blue sky laws in
connection with the purchase and sale of the Remarketed Senior
Notes by the Remarketing Agents.
(r)
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.
(s)
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.
(t)
Independent Public Accountants : Deloitte & Touche LLP,
who have certified certain financial statements of the Company and
its consolidated subsidiaries, and which have audited the
Company’s internal control over financial reporting, are an
independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the rules and
regulations of the Public Company Accounting Oversight
Board.
(u)
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.
(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 the Transaction Documents, the
issuance of the Remarketed Senior Notes or the consummation of the
transactions contemplated in the Transaction
Documents. 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.
(y)
Sarbanes-Oxley : To the best of its knowledge, the Company
is in compliance in all material respects with the applicable
provisions of the Sarbanes-Oxley Act of 2002 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 of Remarketing Materials : The Company has not
distributed and, prior to the later to occur of the Remarketing
Settlement Date and completion of the distribution of the
Remarketed Senior Notes, will not distribute any offering material
in connection with the offering and sale of the Remarketed Senior
Notes or the Additional Notes other than any Preliminary
Prospectus, the Prospectus, and any Issuer Free Writing Prospectus
to which the Remarketing Agents have consented (which consent being
deemed to have been given with respect to (i) the Final Term Sheet
prepared and filed pursuant to Section 5(a)(1) hereof and (ii) any
other Issuer Free Writing Prospectus identified on Schedule 2
hereto).
(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.
(dd)
Investment Company Act : The Company is not, and
as of the Remarketing Settlement Date and, after giving effect to
the offer and sale of the Notes and the application of the proceeds
therefrom as described under “Use of Proceeds” in the
most recent Preliminary Prospectus and the Prospectus, will not be,
an “investment company” within the meaning of such term
under the Investment Company Act of 1940, as amended (the
“Investment Company Act”).
Any
certificate signed by any officer of the Company and delivered
to the Remarketing Agents or their counsel in connection with
the offering of the Remarketed Senior Notes shall be deemed a
representation and warranty by the Company, as to matters
covered thereby but only as of the date thereof, to each
Remarketing Agent.
Section
4.
Fees
.
In the event of a Successful Remarketing of the
Remarketed Senior Notes, the Company shall pay the Remarketing
Agents a remarketing fee equal to 1.50% of the principal amount of
the Remarketed Senior Notes (the “ Remarketing
Fee ”). Such Remarketing Fee shall be paid by the
Company on the Remarketing Settlement Date in cash by wire transfer
of immediately available funds to an account designated by the
Remarketing Agents.
Section
5.
Further Agreements of the Company and the Remarketing
Agents
(a)
The
Company covenants and agrees as follows:
(1)
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 Remarketing Agents
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 Applicable Time;
to make no further amendment or any supplement to the Registration
Statement or the Prospectus prior to the Remarketing Settlement
Date except as provided herein; to advise the Remarketing Agents,
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 Remarketing Agents
with copies thereof and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the
Remarketed Senior Notes; to file promptly all reports and any
definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Remarketed
Senior Notes; to prepare the Final Term Sheet, substantially in the
form of Schedule 3 hereto and approved by the Remarketing Agents
and file the Final Term Sheet pursuant to Rule 433(d) of the Rules
and Regulations within the time period prescribed by such Rule; to
advise the Remarketing Agents, 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 Remarketed Senior Notes for offering or sale
in any jurisdiction, of the initiation or threatening by the
Commission of any proceeding or examination for any such purpose,
of any notice from the Commission objecting to the use of the form
of the Registration Statement or any post-effective amendment
thereto or of any request by the Commission for the amending or
supplementing of the Registration Statement, the Prospectus or any
Issuer Free Writing Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order
preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its
withdrawal;
(2)
Payment of Commission Fees : To pay the
applicable Commission filing fees relating to the Remarketed Senior
Notes within the time required by Rule 456(b)(1) without
regard to the proviso therein;
(3)
Copies of Preliminary Prospectus, Prospectus, Issuer Free Writing
Prospectus and Incorporated Documents; Certain Events and
Amendments or Supplements : To deliver promptly
to the Remarketing Agents on or prior to the Remarketing Settlement
Date such number of the following documents as the Remarketing
Agents shall reasonably request: (A) conformed copies of the
Registration Statement as originally filed with the Commission and
each amendment thereto (in each case excluding exhibits other than
this Agreement and the computation of per share earnings), (B) each
Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus, (C) the Final Term Sheet and each other
Issuer Free Writing Prospectus and (D) any document incorporated by
reference in any Preliminary Prospectus or the Prospectus; and, if
the delivery of a prospectus is required at any time after the date
hereof in connection with the offering or sale of the Remarketed
Senior
Notes
and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Remarketing Agents and, upon
their request, to file such document and to prepare and furnish
without charge to each Remarketing Agent and to any dealer in
securities as many copies as the Remarketing Agents may from time
to time reasonably request of an amended or supplemented Prospectus
that will correct such statement or omission or effect such
compliance;
(4)
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 Remarketing Agents, be required by the
Securities Act or requested by the Commission;
(5)
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 Remarketing Agents and their counsel and not file
any of the same with the Commission to which the Remarketing Agents
shall reasonably object, for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Remarketed Senior Notes;
(6)
Offers by Issuer Free Writing Prospectuses : Not
to make any offer relating to the Remarketed Senior Notes or the
Additional Notes that would constitute an Issuer Free Writing
Prospectus without the prior written consent of the Remarketing
Agents (which consent being deemed to have been given with respect
to (A) the Final Term Sheet prepared and filed pursuant to Section
5(a)(1) hereof and (B) any other Issuer Free Writing Prospectus
identified on Schedule 2 hereto);
(7)
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
Remarketing Agents and, upon their request, to file such document
and to prepare and furnish without charge to the Remarketing Agents
as many copies as the Remarketing Agents 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;
(8)
Earnings 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 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);
(9)
Blue Sky Qualifications : Promptly from time to
time to take such action as the Remarketing Agents may reasonably
request to qualify the Remarketed Senior Notes for offering and
sale under the securities laws of such jurisdictions as the
Remarketing Agents 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 Remarketed Senior Notes; provided that in
connection therewith the Company shall not be required to (i)
qualify as a foreign corporation in any jurisdiction in which it
would not otherwise be required to so qualify, (ii) file a general
consent to service of process in any such jurisdiction or (iii)
subject itself to taxation in any jurisdiction in which it would
not otherwise be subject;
(10)
Clear Market : Until 10 days following the
Remarketing Settlement Date, to not, without the prior written
consent of the Remarketing Agents, directly or indirectly, issue,
sell, offer to sell, grant any option for the sale of or otherwise
dispose of, any debt securities that are substantially similar to
the Remarketed Senior Notes (including, without limitation, with
respect to the maturity, currency, interest rate and other material
terms of the Remarketed Senior Notes); provided that this Section
5(a)(10) does not apply to the offer, sale and issuance of senior
notes of the Company being offered simultaneously with the
Remarketed Senior Notes pursuant to the Preliminary
Prospectus;
(11)
Application of Net Proceeds : To apply the net
proceeds from the sale of the Remarketed Senior Notes being sold by
the Company as set forth in the Prospectus; and
(12)
Anti-manipulation : Not to at any time, directly
or indirectly, take any action intended, or which might reasonably
be expected, to cause or result in the stabilization or
manipulation of the price of any security of the Company in a
manner that would violate the Securities Act or the Exchange
Act.
(b)
The
Company agrees, whether or not the transactions contemplated by the
Transaction Documents are consummated or this Agreement is
terminated, to pay all costs, expenses, fees and taxes incident to
and in connection with (a) the Remarketing of the
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