EX-1.1 DEALER MANAGER AGREEMENT

 

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                                                                     Exhibit 1.1

 

                                TECO ENERGY, INC.

 

                            DEALER MANAGER AGREEMENT

 

                                                                   July 28, 2004

 

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER & SMITH

              INCORPORATED

J. P. MORGAN SECURITIES INC.

MORGAN STANLEY & CO. INCORPORATED

UBS SECURITIES LLC

SG AMERICAS SECURITIES, LLC

 

c/o  Merrill Lynch & Co.

     Merrill Lynch, Pierce, Fenner & Smith

                   Incorporated

     Four World Financial Center

     New York, New York  10080

 

     and

 

     J.P. Morgan Securities Inc.

     277 Park Avenue

     New York, New York 10172

 

Ladies and Gentlemen:

 

      1.    General. TECO Energy, Inc., a Florida corporation (the "COMPANY"),

plans to make a tender offer to exchange (the "OFFER") up to an aggregate of

17,865,000 of the Company's outstanding 9.50% Adjustable Conversion Rate Equity

Security Units in the form of Normal Units (the "SECURITIES") for a combination

of cash and shares of the Company's common stock ("COMPANY SHARES") on the terms

and subject to the conditions set forth in the Preliminary Prospectus dated the

date hereof and included in the Registration Statement (as defined below) (and

as amended or supplemented from time to time prior to effectiveness of the

Registration Statement, the "PRELIMINARY PROSPECTUS"), and the related Letter of

Transmittal (the "LETTER OF TRANSMITTAL") dated the date hereof and filed as

Exhibit 99.1 to the Registration Statement.

 

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            The following materials to be used by the Company in connection with

the Offer, as any of them may be amended, modified or supplemented from time to

time, are collectively referred to herein as the "OFFER MATERIAL":

 

            (a) The Company's Registration Statement on Form S-4 filed with the

Securities and Exchange Commission (the "COMMISSION") on July 28, 2004 in

accordance with the Securities Act of 1933, as amended, and the rules and

regulations of the Commission thereunder (collectively, the "1933 ACT"),

relating to the Offer and the issuance of the Company Shares in connection

therewith. As used in this agreement (the "DEALER MANAGER AGREEMENT" or this

"AGREEMENT"), the term "REGISTRATION STATEMENT" means such registration

statement, including all exhibits, financial statements, schedules or other

information included or incorporated by reference therein, when it becomes

effective under the 1933 Act, and as amended or supplemented from time to time.

 

            (b) The Company's Prospectus relating to the Offer and the Company

Shares to be issued in connection therewith. As used in this Agreement, the term

"PROSPECTUS" means (i) any prospectus, as amended or supplemented on or prior to

the Acceptance Date (including, but not limited to, the Preliminary Prospectus)

that the Company uses, prepares, files, distributes or approves in writing which

is used to solicit tenders of Securities in the Offer, or (ii) after the

effectiveness of the Registration Statement, the prospectus, if any, filed with

the Commission pursuant to Rule 424(b) under the 1933 Act, in the form it was

first filed, provided that such prospectus was used to solicit tenders of

Securities in the Offer on or prior to the Acceptance Date. All references in

this Agreement to financial statements and schedules and other information which

is "contained", "included" or "stated" in the Registration Statement, any

preliminary prospectus or the Prospectus (or other references of like import)

shall be deemed to mean and include all such financial statements and schedules

and other information which is incorporated, or deemed to be incorporated, by

reference in the Registration Statement, any preliminary prospectus or the

Prospectus, as the case may be. Any reference herein to the Registration

Statement or the Prospectus shall be deemed to refer to and include any

documents, financial statements and schedules incorporated, or deemed to be

incorporated, by reference therein pursuant to Form S-4 under the 1933 Act, as

of the effective date of the Registration Statement or the date of the

Prospectus, as the case may be, and any reference to any amendment or supplement

to the Registration Statement or the Prospectus shall be deemed to refer to and

include any documents, financial statements and schedules filed after such date

under the Securities Exchange Act of 1934, as amended, and the rules and

regulations of the Commission thereunder (collectively, the "1934 ACT") and so

incorporated, or deemed to be incorporated, by reference (such incorporated

documents, financial statements and schedules being herein called the

"INCORPORATED DOCUMENTS"). For purposes of this Agreement, all references to the

Registration Statement, any preliminary prospectus, the Prospectus or any

amendment or supplement to any of the foregoing shall be deemed to include the

copy filed with the Commission pursuant to its Electronic Data Gathering,

Analysis and Retrieval system ("EDGAR").

 

            (c) The Tender Offer Statement on Schedule TO (the "SCHEDULE TO")

filed or to be filed by the Company with the Commission pursuant to Rule 13e-4

under the 1934 Act and all amendments to the Schedule TO (each an "AMENDMENT"

and, collectively, the "AMENDMENTS") and the Letter of Transmittal.

 

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            (d) The Guidelines for Certification of Taxpayer Identification

Number on Substitute Form W-9 relating to the Offer.

 

            (e) The form of letter to Registered Holders and The Depository

Trust Company Participants relating to the Offer, and the form of letter to

Clients of Registered Holders and The Depository Trust Company Participants

relating to the Offer.

 

            (f) The form of letter to Holders of TECO Energy, Inc.'s Equity

Security Units relating to the Offer.

 

            (g) Any other documents or materials whatsoever (including newspaper

announcements and press releases) relating to the Offer that are distributed or

made available to the public or the holders of the Securities by or at the

direction of the Company in connection with the Offer.

 

            2. Engagement as Dealer Managers. (a) The Company hereby retains

each of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,

J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, UBS Securities

LLC and SG Americas Securities, LLC to act as the exclusive dealer managers with

respect to the Offer (each a "DEALER MANAGER" and together, the "DEALER

MANAGERS"). On the basis of the representations and warranties and agreements of

the Company herein contained and subject to and in accordance with the terms and

conditions hereof and of the Offer Material, you hereby agree to act as Dealer

Managers in connection with the Offer and in connection therewith, you shall act

in accordance with your customary practices and shall perform those services in

connection with the Offer that are customarily performed by investment banking

firms in connection with acting as a dealer manager of exchange offers of a like

nature, including, but not limited to, soliciting tenders pursuant to the Offer

and communicating generally regarding the Offer with brokers, dealers,

commercial banks and trust companies and other persons, including the holders of

the Securities. The Dealer Managers shall have no obligation to cause copies of

the Offer Material to be transmitted generally to the holders of the Securities.

 

            (b) The Company acknowledges and agrees that each of the Dealer

Managers have been retained hereunder to act solely as a Dealer Manager. In such

capacity, each of the Dealer Managers shall act hereunder as an independent

contractor and shall not be deemed the agent or fiduciary of the Company or any

of its affiliates, equity holders or creditors or of any other person, and any

of the duties of the Dealer Managers arising out of the Dealer Managers'

engagement pursuant to this Agreement shall be owed solely to the Company. None

of the Dealer Managers shall be liable to the Company, its affiliates, equity

holders or creditors or to any other person for any act or omission on the part

of, and shall not be deemed to be the agent or fiduciary of, any broker or

dealer (except that Merrill Lynch & Co. and Merrill Lynch, Pierce Fenner & Smith

Incorporated may be deemed the agent or fiduciary of Merrill Lynch, Pierce,

Fenner & Smith Incorporated in its capacity as broker or dealer), commercial

bank or trust company and no such broker or dealer, commercial bank or trust

company shall be deemed to be acting as the agent or fiduciary of any of the

Dealer Managers (including, without limitation, for purposes of Section 10 of

this Agreement). Nothing contained in this Agreement shall constitute any of the

Dealer Managers a partner of or joint venturer with the Company.

 

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            3. Solicitation Material, Withdrawal. The Company agrees to furnish

you with as many copies as you may reasonably request of any Offer Material, and

hereby authorizes you to use the Offer Material in connection with the Offer.

The Company agrees that, within a reasonable time prior to using any Offer

Material, it will submit copies of such material to you and your counsel and

will not use or publish any such material to which you reasonably object. The

Company agrees that the Offer Material have been or will be prepared and

approved by, and are the sole responsibility of, the Company. The Company shall

inform you promptly after it receives notice or becomes aware of the happening

of any event, or the discovery of any fact, that would require the making of any

change in any Offer Material then being used or that would affect the accuracy

or completeness of any representation or warranty contained in this Agreement if

such representation or warranty were being made immediately after the happening

of such event or the discovery of such fact.

 

            In the event that (i) the Company uses or permits the use of any

Offer Material (a) that has not been submitted to you and your counsel for

comment or (b) that has been so submitted and with respect to which you or your

counsel have made comments, but which comments have not resulted in a response

reasonably satisfactory to you to reflect such comments, (ii) the Company shall

have breached any of its representations, warranties, agreements, obligations or

covenants contained herein, (iii) there shall have occurred any material adverse

change, or any development or event involving a prospective material adverse

change, in the condition, financial or otherwise, or in the earnings or business

affairs of the Company and its subsidiaries considered as one enterprise,

whether or not arising in the ordinary course of business, that, in your

judgment, makes it impracticable or inadvisable to carry out the Offer, the

exchange of Securities pursuant thereto or the performance of this Agreement,

(iv) the Offer is terminated or withdrawn for any reason or (v) any stop order,

restraining order, injunction or denial of an application for approval has been

issued in connection with the Offer and not thereafter stayed or vacated or any

proceeding, litigation or investigation in connection with the Offer has been

initiated, that, in either case in your judgment, makes it impracticable or

inadvisable to carry out the Offer, the exchange of Securities pursuant thereto

or the performance of this Agreement, then in any such case you shall be

entitled to withdraw as a Dealer Manager, by providing written notice of such

withdrawal to the Company, without any liability or penalty to you or any other

Indemnified Party (as defined in Section 10) and without loss of any right to

the payment of all expenses payable in accordance with Section 5 hereunder which

have been incurred by you to the date of such withdrawal. If you withdraw as a

Dealer Manager in accordance with the foregoing provision, the reimbursement for

your expenses through the date of such withdrawal shall be paid to you promptly

after such date. Notwithstanding anything contained in this Agreement to the

contrary, the Company may, in its discretion, carry out the Offer after your

withdrawal as Dealer Manager, provided that the Company (y) amends or

supplements the Offer Material to disclose that you have withdrawn as Dealer

Manager and (z) utilizes a means reasonably calculated to reach holders of the

Securities to inform them of such withdrawal.

 

            4. Compensation. The Company agrees that it shall pay to the Dealer

Managers a fee for their services as Dealer Managers hereunder in the amount of

$250,000 (the "UPFRONT FEE"), which amount shall be paid in cash on the

Commencement Date (as defined below) whether or not any Securities are accepted

by the Company in connection with the Offer, and shall be allocated among the

Dealer Managers in their sole discretion. The Company further

 

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agrees that it will pay additional compensation to the Dealer Managers for their

services as Dealer Managers hereunder and agrees that such additional

compensation will be as set forth in Schedule I hereto, less the amount of the

Upfront Fee, and that such additional compensation will be paid in cash

immediately upon the completion of the Offer.

 

            5. Expenses. The Company agrees that it will pay all of the

following expenses related to the Offer: (i) all fees and expenses relating to

the preparation, printing, mailing and publishing of the Offer Material,

including the cost of preparation and filing of the Registration Statement and

any amendment thereto and Schedule TO and any Amendments thereto, and the cost

of furnishing copies thereof to the Dealer Managers, (ii) all fees and expenses

of the Company's counsel and accountants and of the Exchange Agent and

Information Agent (each as defined in Section 6), (iii) all advertising charges,

(iv) all fees and expenses of any depositary, transfer agent or other person

rendering services in connection with the Offer, (v) mailing and handling

expenses incurred by brokers and dealers (including you), commercial banks,

trust companies and other nominees in forwarding the Offer Material to their

customers, (vi) the cost of the preparation, issuance and delivery of the

Company Shares, including any and all transfer and other taxes payable thereon,

except as otherwise stated in the Letter of Transmittal, (vii) all expenses in

connection with the qualification of the Company Shares for offer and delivery,

(viii) all costs and expenses incident to the additional listing of the Company

Shares on the New York Stock Exchange, (ix) all fees and expenses of Shearman &

Sterling LLP as counsel to the Dealer Managers and (x) all other costs and

expenses incident to the performance of the obligations of the Company hereunder

for which provision is not otherwise made in this Section 5. All payments to be

made by the Company pursuant to this Section 5 shall be made promptly after the

expiration or termination of the Offer or withdrawal by you from acting as

Dealer Managers in accordance with Section 3 or, if later, promptly after the

related fees or expenses accrue and are invoiced. The Company shall perform its

obligations set forth in this Section 5 whether or not the Offer is commenced or

the Company acquires any Securities pursuant to the Offer or otherwise.

 

            6. Exchange Agent and Information Agent. (a) The Company will

arrange for The Bank of New York, a New York banking corporation, to serve as

exchange agent (the "EXCHANGE AGENT") in connection with the Offer and, as such,

to advise you at least daily as to such matters relating to the Offer as you may

request. The Company shall provide you or cause The Depository Trust Company

("DTC") to provide you with copies of the records or other lists showing the

names and addresses of, and number of Securities held by, the holders of

Securities as of a recent date and shall, from and after such date, use its

commercially reasonable efforts to cause you to be advised from day to day

during the pendency of the Offer of all transfers of Securities, such

notification consisting of the name and address of the transferor and transferee

of any Securities and the date of such transfer. The Company will arrange for

Morrow & Co., Inc. to serve as information agent ("INFORMATION AGENT") in

connection with the Offer and, as such, to advise you as to such matters

relating to the Offer as you may reasonably request and to furnish you with any

written reports concerning any such information as you may reasonably request.

 

            (b) The Company authorizes you to communicate with the Exchange

Agent, the Information Agent and with DTC in its capacity as depositary, with

respect to matters relating to the Offer.

 

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            7. Representations, Warranties and Certain Agreements of the

Company. The Company represents and warrants to each of the Dealer Managers, and

agrees with each of the Dealer Managers, as of the date hereof, as of the date

of commencement of the Offer pursuant to Section 13(e) of the 1934 Act (if

different than the date hereof) (the "COMMENCEMENT DATE") and as of the date on

which the Securities are accepted by the Company pursuant to the Offer (the

"ACCEPTANCE DATE") (unless another date is specifically referenced in which case

the representation and warranty shall speak as of such date):

 

            (a) Compliance with Registration Requirements. The Company meets the

requirements for use of Form S-4 under the 1933 Act and, on or prior to the

Commencement Date, has filed with the Commission the Registration Statement and

paid the applicable filing fees. As of the Acceptance Date, the Registration

Statement and any post-effective amendment thereto have become effective under

the 1933 Act and no stop order suspending the effectiveness of the Registration

Statement and any post-effective amendment thereto has been issued under the

1933 Act and no proceedings for that purpose have been instituted or are pending

or, to the knowledge of the Company, are contemplated by the Commission, and any

request on the part of the Commission for additional information has been

complied with.

 

            At the respective times the Registration Statement and any

post-effective amendments thereto become effective and at the Acceptance Date,

the Registration Statement and any amendments thereto will comply in all

material respects with the requirements of the 1933 Act and will 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 not misleading.

Neither the Prospectus nor any amendments and supplements thereto included or

will include an untrue statement of a material fact or omitted or will omit to

state a material fact necessary in order to make the statements therein, in the

light of the circumstances under which they were made, not misleading, except

that the foregoing does not apply to statements in or omissions from any of such

documents based upon written information furnished to the Company by you or on

your behalf specifically for use therein.

 

            Each preliminary prospectus and prospectus filed as part of the

Registration Statement as originally filed or as part of any amendment thereto,

complied when so filed in all material respects with the 1933 Act and each

preliminary prospectus and the Prospectus prepared for use in connection with

the Offer will, at the time of such delivery, be identical to any electronically

transmitted copies thereof filed with the Commission pursuant to EDGAR, except

to the extent permitted by Regulation S-T.

 

            (b) Offer Material. A complete and correct copy of the Offer

Material has been furnished to you and your counsel or will be furnished no

later than the Commencement Date. The Offer Material, as then amended or

supplemented (other than the Prospectus and the Registration Statement, and any

amendments and supplements thereto, which are covered in subsection (a) above),

complied and will comply in all material respects with the requirements of the

1933 Act and the 1934 Act, as applicable, and did not and will 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 not misleading.

Neither the Offer Material nor any amendments or supplements thereto (other than

the Prospectus and the Registration Statement, and any amendments and

supplements thereto, which are covered in subsection (a) above)

 

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included or will include an untrue statement of a material fact or omitted or

will omit to state a material fact necessary in order to make the statements

therein, in the light of the circumstances under which they were made, not

misleading.

 

            (c) Incorporated Documents. The Incorporated Documents, at the time

they were or hereafter are filed with the Commission, complied and will comply

in all material respects with the requirements of the 1934 Act, and, when read

together with the other information in the Prospectus, at the date of the

Prospectus and at the Acceptance Date, did not and will not include an untrue

statement of a material fact or omit to state a material fact necessary in order

to make the statements therein, in the light of the circumstances under which

they were made, not misleading.

 

            (d) Financial Statements. The financial statements of the Company,

together with the related schedules and notes to such financial statements,

included in the Registration Statement and the Prospectus present fairly the

financial position of the Company and its consolidated subsidiaries as of the

dates shown and their results of operations and cash flows for the periods

shown, and except as otherwise disclosed in the Prospectus, such financial

statements comply as to form with the applicable accounting requirements of the

1933 Act and have been prepared in conformity with generally accepted accounting

principles ("GAAP") in the United States applied on a consistent basis

throughout the periods involved (except as stated therein); and any schedules

included in the Registration Statement present fairly in accordance with GAAP

the information required to be stated therein. The selected historical financial

data set forth under the caption "Selected Consolidated Historical Financial

Data" in the Prospectus present fairly the information shown therein and have

been compiled as described in the Prospectus under the caption "Selected

Consolidated Historical Financial Data."

 

            (e) Independent Accountants. PricewaterhouseCoopers LLP, who have

certified certain financial statements of the Company and its consolidated

subsidiaries and delivered their report with respect to the audited consolidated

financial statements included in the Prospectus, are independent public

accountants with respect to the Company and its subsidiaries as required by the

1933 Act and the 1934 Act.

 

            (f) No Material Adverse Change in Business. Since the respective

dates as of which information is given in the Registration Statement and the

Prospectus, except as otherwise stated therein, (i) there has not occurred any

material adverse change in the condition, financial or otherwise, or in the

business, properties or results of operations of the Company and its

subsidiaries considered as one enterprise and (ii) except for regular dividends

on the Company's common stock or preferred stock, in amounts per share that are

consistent with past practice or the applicable charter document or supplement

thereto, respectively, there has been no dividend or distribution of any kind

declared, paid or made by the Company on any class of its capital stock.

 

            (g) Good Standing of the Company. The Company has been duly

incorporated and is an existing corporation in good standing under the laws of

the State of Florida, with power and authority (corporate and other) to own its

properties and conduct its business as described in the Prospectus; and the

Company is duly qualified to do business as a foreign corporation in good

standing in all other jurisdictions in which its ownership or lease of property

or the conduct

 

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of its business requires such qualification, except where the failure to so

qualify would not result in a material adverse change in the condition,

financial or otherwise, or in the business, properties or results of operations

of the Company and its subsidiaries considered as one enterprise (a "MATERIAL

ADVERSE EFFECT").

 

            (h) Good Standing of Subsidiaries. Each "significant subsidiary" (as

such term is defined in Rule 1-02 of Regulation S-X promulgated under the 1933

Act) of the Company (each, a "SIGNIFICANT SUBSIDIARY") is listed on Schedule II

hereto and has been duly incorporated and is an existing corporation in good

standing under the laws of the jurisdiction of its incorporation, with power and

authority (corporate and other) to own its properties and conduct its business

as described in the Prospectus; each other subsidiary of the Company has been

duly incorporated or formed, as the case may be, and is an existing corporation

or other entity, as the case may be, in good standing under the laws of the

jurisdiction of its organization, with power and authority (corporate and other)

to own its properties and conduct its business as described in the Prospectus,

except where the failure of the foregoing to be correct would not have a

Material Adverse Effect; and each subsidiary of the Company is duly qualified to

do business as a foreign corporation or other entity 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 where the failure to so

qualify would not have a Material Adverse Effect; all of the issued and

outstanding capital stock or other equity interests of each subsidiary of the

Company has been duly authorized and validly issued and is fully paid and

nonassessable; and the capital stock or other equity interests of each

subsidiary owned by the Company, directly or through subsidiaries, is owned free

from liens, encumbrances and defects, except for such liens, encumbrances and

defects as are disclosed in the Prospectus or as would not have a Material

Adverse Effect.

 

            (i) Capital Stock. The capital stock of the Company conforms in all

material respects to the description thereof contained in the Prospectus and

Offer Material; the outstanding shares of capital stock of the Company have been

duly and validly authorized and issued and are fully paid and nonassessable; and

none of such shares of capital stock was issued in violation of preemptive or

other similar rights of any securityholder of the Company.

 

            (j) Authorization of this Agreement. This Agreement has been duly

authorized, executed and delivered by the Company.

 

            (k) Authorization of Company Shares. The Company has duly authorized

for issuance a number of Company Shares sufficient to consummate the Offer

pursuant to its terms and, when any Company Shares are issued and delivered by

the Company as provided in the Offer Material, such Company Shares will be

validly issued and fully paid and non-assessable; the Company Shares conform in

all material respects to the respective statements relating thereto contained in

the Prospectus and Offer Material and the issuance of the Company Shares by the

Company is not subject to any preemptive or other similar rights of any security

holder of the Company.

 

            (l) Absence of Defaults and Conflicts. The Company has full power

and authority to make and consummate the Offer in accordance with its terms and

to execute, deliver and perform its obligations under this Agreement. The (i)

execution, delivery and performance by the Company of this Agreement, (ii)

making and consummation of the Offer by the Company

 

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(including but not limited to the issuance and delivery of Company Shares

thereunder), (iii) obtaining and use by the Company of funds required in

connection with the Offer, (iv) use of the Offer Material and the filing of the

Registration Statement, the Prospectus and the Schedule TO, and any amendments

or supplements thereto and (v) consummation by the Company of the transactions

contemplated by this Agreement and in the Offer Material, in each case, have

been duly authorized by all necessary corporate action and do not and will not

(y) whether with or without the giving of notice or passage of time or both,

conflict with or constitute a breach of, or default or Repayment Event (as

defined below) under, or result in the creation or imposition of any lien,

charge or encumbrance upon any assets, properties or operations of the Company

or any Significant Subsidiary pursuant to, any indenture, contract, lease,

mortgage, deed of trust, note agreement, loan agreement or other agreement,

obligation, condition, covenant or instrument to which the Company or any

Significant Subsidiary is a party or is bound or to which their property is

subject (except for such conflicts, breaches, defaults, or Repayment Events or

liens, charges, or encumbrances that would not, individually or in the

aggregate, result in a Material Adverse Effect); or (z) violate (a) the

provisions of the charter or by-laws (or other similar document) of the Company

or any Significant Subsidiary or (b) any law, statute, rule, regulation,

judgment, order, writ or decree applicable to the Company or any Significant

Subsidiary of any court, regulatory body, administrative agency, governmental

body, arbitrator or other authority, domestic or foreign, having jurisdiction

over the Company or any Significant Subsidiary or any of their assets,

properties or operations, except in the case of clause (b), for such violations

that would not, individually or in the aggregate, result in a Material Adverse

Effect. As used herein, a "REPAYMENT EVENT" means any event or condition which

gives the holder of any note, debenture or other evidence of indebtedness (or

any person acting on such holder's behalf) (other than the 5.11% trust preferred

securities issued by TECO Capital II Trust that are subject to this Offer as

components of the Securities) the right to require the repurchase, redemption or

repayment of all or a portion of such indebtedness by the Company or any

Significant Subsidiary.

 

            (m) Absence of Labor Dispute. No labor dispute with the employees of

the Company or any subsidiary exists or, to the knowledge of the Company, is

imminent, that could reasonably be expected to have a Material Adverse Effect.

 

            (n) Absence of Proceedings. Except as disclosed in the Prospectus,

there are no pending actions, suits or proceedings against or involving the

Company or any of its property or assets, any of its subsidiaries or any of

their respective properties or assets that could reasonably be expected to have,

individually or in the aggregate, a Material Adverse Effect, or would materially

and adversely affect the ability of the Company to consummate the Offer or

perform its obligations thereunder, including, without limitation, its

obligations under this Agreement, or which are otherwise material in the context

of the Offer; and to the Company's best knowledge after reasonable

investigation, no such actions, suits or proceedings are threatened or

contemplated.

 

            (o) Absence of Further Requirements. No filing with, or

authorization, approval, consent, license, order, registration, qualification or

decree of, any court or governmental authority or agency (including, without

limitation, the Florida Public Service Commission) is required for the

execution, delivery and performance by the Company of this Agreement, in

connection with the consummation of the Offer or the other transactions

described in the Offer

 

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Material by the Company, including but not limited to the issuance of and

delivery of the Company Shares, except such as have been already obtained or as

may be required under the 1933 Act or state securities laws.

 

            (p) Possession of Licenses and Permits. The Company and each of its

Significant Subsidiaries possess adequate permits, licenses, approvals, consents

and other authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the

appropriate federal, state, local or foreign regulatory agencies or bodies

necessary to conduct the business now operated by them, except where the failure

so to possess would not, singly or in the aggregate, result in a Material

Adverse Effect; and neither the Company nor any of its Significant Subsidiaries

have received any notice of proceedings relating to the revocation or

modification of any such Governmental Licenses which, singly or in the

aggregate, if the subject of an unfavorable decision, ruling or finding, would

result in a Material Adverse Effect.

 

            (q) Sufficient Funds. The funds to be made available by the Company

for consummation of the Offer as described in the Offer Material are available

or will be available to the Company by the Acceptance Date and the Company will

have sufficient authority under applicable law to use such funds as described to

enable the Company promptly to pay the cash consideration for the Securities

pursuant to the Offer as described in the Prospectus.

 

            (r) Exemption from Public Utility Holding Company Act. The Company

has filed an appropriate exemption statement pursuant to the provisions of the

Public Utility Holding Company Act of 1935, as amended (the "PUBLIC UTILITY

HOLDING COMPANY ACT") and is exempt from all provisions of the Public Utility

Holding Company Act except Section 9(a)(2) thereof relating to the acquisition

of securities of other public utility companies. The Company is not subject to

the jurisdiction of the Florida Public Service Commission with respect to the

Offer.

 

            (s) Business with Cuba. The Company and each of its subsidiaries

have complied with all provisions of Section 517.075, Florida Statutes relating

to doing business with the Government of Cuba or with any person or affiliate

located in Cuba.

 

            (t) 1934 Act Reports. The Company is subject to Section 13 or 15(d)

of the 1934 Act. The Incorporated Documents, where applicable, and the

Prospectus comply in all material respects with Regulation G and with Item 10(e)

of Regulation S-K.

 

            (u) Officers' Certificates. Any certificate signed by any officer of

the Company or any of its subsidiaries delivered to you or to your counsel shall

be deemed a representation and warranty by the Company to each Dealer Manager as

to the matters covered thereby.

 

            (v) Material Agreements. Neither the Company nor any of its

subsidiaries is in violation of, or in default in, the performance or observance

of any obligation, agreement, covenant or condition contained in any agreement

or instrument that is included as an exhibit to the 1934 Act Reports, which the

Company has filed with the Commission, except as disclosed in the Prospectus or

for such defaults that would not result in a Material Adverse Effect.

 

            (w) Compliance with Environmental Laws. Except as described in the

Registration Statement and Prospectus and except as would not, singly or in the

aggregate, result in a Material Adverse Effect, (A) to the best knowledge of the

Company after reasonable

 

                                       10

 

<PAGE>

 

investigation, neither the Company nor any of its subsidiaries is in violation

of any federal, state, local or foreign statute, law, rule, regulation,

ordinance, code, policy or rule of common law or any judicial or administrative

interpretation thereof, including any judicial or administrative order, consent,

decree or judgment, relating to pollution or protection of human health, the

environment (including, without limitation, ambient air, surface water,

groundwater, land surface or subsurface strata) or wildlife, including, without

limitation, laws and regulations relating to the release or threatened release

of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous

substances, petroleum or petroleum products, asbestos-containing materials or

mold (collectively, "HAZARDOUS MATERIALS") or to the manufacture, processing,

distribution, use, treatment, storage, disposal, transport or handling of

Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (B) the Company and

its subsidiaries have all permits, authorizations and approvals required under

any applicable Environmental Laws, and to the best knowledge of the Company

after reasonable investigation, are each in compliance with their requirements,

(C) there are no pending or, to the best knowledge of the Company after

reasonable investigation, threatened administrative, regulatory or judicial

actions, suits, demands, demand letters, claims, liens, notices of noncompliance

or violation, investigation or proceedings relating to any Environmental Law

against the Company or any of its subsidiaries and (D) to the best knowledge of

the Company after reasonable investigation, there are no events or circumstances

that would reasonably be expected to form the basis of an order for clean-up or

remediation, or an action, suit or proceeding by any private party or

governmental body or agency, against or affecting the Company or any of its

subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

            (x) Intellectual Property. The Company and each of its Significant

Subsidiaries own or possess, or can acquire on reasonable terms, adequate

patents, patent rights, licenses, inventions, copyrights, know-how (including

trade secrets and other unpatented and/or unpatentable proprietary or

confidential information, systems or procedures), trademarks, service marks,

trade names or other intellectual property (collectively, "INTELLECTUAL

PROPERTY") necessary to carry on the business now operated by them, and neither

the Company nor any of its Significant Subsidiaries has received any notice of

any infringement of or conflict with asserted rights of others with respect to

any Intellectual Property, which infringement or conflict (if the subject of any

unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or

in the aggregate, would result in a Material Adverse Effect.

 

            (y) Internal Controls. Except as described in the Registration

Statement and the Prospectus, the Company and each of its Significant

Subsidiaries, considered as one enterprise, maintain a system 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.

 

            (z) Disclosure Controls and Procedures. The Company has established

and maintains disclosure controls and procedures (as such terms are defined in

Rule 13a-15(e) and 15d-15(e) under the 1934 Act) designed to ensure that

material information relating to the

 

                                       11

 

<PAGE>

 

Company, including its subsidiaries, is made known to the Company's Chief

Executive Officer and its Chief Financial Officer by others within those

entities; such disclosure controls and procedures are effective to perform the

functions for which they were established. The Company's auditors and the audit

committee of the board of directors of the Company have been advised of: (i) any

significant deficiencies and material weaknesses in the design or operation of

internal control over financial reporting which are reasonably likely to

adversely affect the Company's ability to record, process, summarize and report

financial information and (ii) any fraud, whether or not material, that involves

management or other employees who have a significant role in the Company's

internal control over financial reporting, in each case, that have arisen since

the date of the certifications included as Exhibits 31.1 and 31.2 to the

Company's most recent quarterly report on Form 10-Q. Since the date of the most

recent evaluation of such disclosure controls and procedures, there have been no

significant changes in internal controls or in other factors that could

significantly affect internal controls, including any corrective actions with

regard to significant deficiencies and material weaknesses.

 

            (aa) Investment Company Act. The Company is not and, after giving

effect to the issuance of the Company Shares in connection with the Offer, will

not be an "investment company" required to be registered under the Investment

Company Act of 1940, as amended.

 

            (bb) ERISA Compliance. The Company and each of its Significant

Subsidiaries, considered as one enterprise, has fulfilled its obligations, if

any, under the minimum funding standards of Section 302 and the regulations and

published interpretations thereunder of the United States Employee Retirement

Income Security Act of 1974, as amended ("ERISA"), with respect to each "pension

plan" (as defined in Section 3(2) of ERISA and such regulations and published

interpretations) in which employees of the Company and its Significant

Subsidiaries are eligible to participate and, except as described in the

Prospectus, each such plan is in compliance in all material respects with the

presently applicable provisions of ERISA and such regulations and published

interpretations; the Company and its Significant Subsidiaries, considered as one

enterprise, have not incurred any unpaid liability to the Pension Benefit

Guaranty Corporation (other than for the payment of premiums in the ordinary

course) or to any such plan under Title IV of ERISA.

 

            (cc) Listing. The Company Shares have been approved for listing on

the New York Stock Exchange, subject to official notice of issuance.

 

            8. Additional Agreements. (a) The Company shall notify you

immediately and, if requested, shall notify you in writing of (i) when the

Registration Statement has become effective and when any Prospectus is mailed

(or otherwise sent) for filing pursuant to Rule 424 under the 1933 Act, (ii) the

receipt of any comments from the Commission, (iii) any request by the Commission

for any amendment to the Registration Statement or any amendment or supplement

to the Prospectus or for additional information, (iv) the filing of any

post-effective amendment to the Registration Statement, (v) the issuance by the

Commission of any stop order suspending the effectiveness of the Registration

Statement or any post-effective amendment thereto or of any order preventing or

suspending the use of the Preliminary Prospectus or any Offer Material, or of

the suspension of the qualification of the Securities for offering or sale in

any jurisdiction, or of the initiation or threatening of any proceedings for any

of such purposes, (vi) the occurrence of any event that could cause the Company

to withdraw or terminate the

 

                                       12

 

<PAGE>

 

Offer or would permit the Company to exercise any right not to accept tendered

Securities, (vii) any proposal or requirement to make, amend or supplement any

other Offer Material, (viii) the commencement of any material litigation or the

issuance of any order or the taking of any other action by any administrative or

judicial tribunal or other governmental agency or instrumentality concerning the

Offer (and, if in writing, will furnish you a copy thereof), (ix) the issuance

by any state securities commission or other regulatory authority of any order

suspending the qualification or the exemption from qualification of the Company

Shares under state securities or blue sky laws or the initiation or threatening

of any proceeding for that purpose, (x) the occurrence of any event, or the

discovery of any fact, the occurrence or existence of which would reasonably be

expected to (a) cause the Company to amend, withdraw or terminate the Offer, (b)

cause any representation or warranty contained in this Agreement to be untrue or

inaccurate, or (c) permit the Company to exercise any right not to exchange the

Securities tendered under the Offer (and the Company will so advise you before

such rights are exercised) and (xi) any other information relating to the Offer

which you may from time to time reasonably request.

 

            The Company agrees that if any event occurs or condition exists as a

result of which the Offer Material (other than the Registration Statement and

the Prospectus, which are discussed in Section 8(g) below) would include an

untrue statement of a material fact, or omit to state any material fact

necessary to make the statements therein, in light of the circumstances existing

when the Offer Material is delivered to a holder of Securities, not misleading,

or if, in the opinion of the Company, after consultation with you, it is

necessary at any time to amend or supplement the Offer Material to comply with

applicable law, the Company shall immediately notify you, prepare an amendment

or supplement to the Offer Material that will correct such statement or omission

or effect such compliance and supply such amended or supplemented Offer Material

to you.

 

            (b) The Company will promptly effect the filings necessary pursuant

to Rule 424 and will take such steps as it deems necessary to ascertain promptly

whether the Prospectus transmitted for filing under Rule 424 was received for

filing by the Commission and, in the event that it was not, it will promptly

file the Prospectus. The Company will make every reasonable effort to prevent

the issuance of any stop order and, if any stop order is issued, will make every

reasonable effort to obtain the lifting thereof at the earliest possible moment.

 

            The Company will file promptly all reports or information statements

required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or

15(d) of the 1934 Act subsequent to the date of the Preliminary Prospectus and

for so long as the delivery of a prospectus is required in connection with the

Offer. The Company will promptly file with the Commission on the Commencement

Date a Schedule TO and will promptly file as required any and all necessary

Amendments.

 

            (c) On the Commencement Date, the Company will cause to be delivered

to each registered holder of the Securities, as soon practicable, a copy of the

Preliminary Prospectus and Letter of Transmittal and all other appropriate Offer

Material. Thereafter, to the extent practicable until the expiration or

termination of the Offer, the Company will use its best efforts to cause copies

of such material to be mailed to each person who becomes a registered holder of

any Company Shares.

 

                                       13

 

<PAGE>

 

            (d) The Company will give you notice of its intention to file or

prepare any amendment to the Registration Statement (including any filing under

Rule 462(b) of the 1933 Act regulations), or any amendment, supplement or

revision to either the prospectus included in the Registration Statement at the

time it became effective or to the Prospectus, whether pursuant to the 1933 Act,

the 1934 Act or otherwise, will furnish you with copies of any such documents a

reasonable amount of time prior to such proposed filing or use, as the case may

be, and will not file or use any such document to which you shall reasonably

object in writing.

 

            (e) The Company has furnished or will deliver to you, without

charge, one conformed copy of the Registration Statement as originally filed and

of each amendment thereto (including exhibits filed therewith or incorporated by

reference therein and documents incorporated or deemed to be incorporated by

reference therein) and conformed copies of all consents and certificates of

experts, and will also deliver to you, without charge, as many conformed copies

of the Registration Statement as originally filed and of each amendment thereto

(without exhibits) as you may reasonably request. The Company further agrees

that the Registration Statement and each amendment thereto furnished to you will

be identical to any electronically transmitted copies thereof filed with the

Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

            (f) The Company will deliver to you, without charge, as many copies

of the Prospectus as you may reasonably request, and the Company hereby consents

to the use of such copies for purposes permitted by the 1933 Act. The Company

will furnish to you, without charge, during the period when the Prospectus is

required to be delivered under the 1933 Act or the 1934 Act, such number of

copies of the Prospectus as you may reasonably request. The Company further

agrees that the Prospectus and any amendments or supplements thereto furnished

to you will be identical to any electronically transmitted copies thereof filed

with the Commission pursuant to EDGAR, except to the extent permitted by

Regulation S-T.

 

            (g) The Company will comply with the 1933 Act and the 1934 Act so as

to permit the completion of the distribution of the Company Shares as

contemplated in this Agreement and in the Registration Statement and the

Prospectus. If at any time when the Prospectus is required by the 1933 Act or

the 1934 Act to be delivered in connection with the distribution of the Company

Shares, any event shall occur or condition shall exist as a result of which it

is necessary, in the opinion of your counsel or counsel for the Company, to

amend the Registration Statement in order that the Registration Statement will

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

not misleading or to amend or supplement the Prospectus in order that the

Prospectus will not include an untrue statement of a material fact or omit to

state a material fact necessary in order to make the statements therein, in the

light of the circumstances existing at the time it is delivered to a holder of

Securities, not misleading, or if it shall be necessary, in the opinion of such

counsel, at any such time to amend the Registration Statement or amend or

supplement the Prospectus in order to comply with the requirements of the 1933

Act, the Company will promptly prepare and file with the Commission, subject to

the terms of this Agreement, such amendment or supplement as may be necessary to

correct such statement or omission or to make the Registration Statement or the

Prospectus comply with such requirements, and the Company will furnish to you,

without charge, such number of copies of such amendment or supplement as you may

reasonably request.

 

                                       14

 

<PAGE>

 

            (h) The Company will use its best efforts, in cooperation with you

and in accordance with Rule 13e-4 of the 1934 Act, to qualify the Company Shares

for offering and sale under the applicable securities laws of such states and

other jurisdictions (domestic or foreign) as you and the Company may reasonably

designate and to maintain such qualifications in effect for a period of not less

than one year from the date of this Agreement; provided, however, that the

Company shall not be obligated to file any general consent to service of process

or to qualify as a foreign corporation or as a dealer in securities in any

jurisdiction in which it is not so qualified or to subject itself to taxation in

respect of doing business in any jurisdiction in which it is not otherwise so

subject. In each jurisdiction in which the Company Shares have