NEW MEXICO UTILITIES, INC. BOND PURCHASE AGREEMENT DATED AS OF DECEMBER 15, 2004$12,000,000 FIRST MORTGAGE BONDS, SERIES C 6.10%, DUE DECEMBER 1, 2024Note Purchase Agreement |
|
|
You are currently viewing: This Note Purchase Agreement involves
SOUTHWEST WATER COMPANY | NEW MEXICO UTILITIES, INC.. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
NEW MEXICO UTILITIES, INC. BOND PURCHASE AGREEMENT DATED AS OF DECEMBER 15, 2004 $12,000,000 FIRST MORTGAGE BONDS, SERIES C 6.10%, DUE DECEMBER 1, 2024
i
ii NEW MEXICO UTILITIES, INC. BOND PURCHASE AGREEMENT $12,000,000 As of December 15, 2004 TO EACH OF THE PURCHASERS
LISTED Ladies and Gentlemen: New Mexico Utilities, Inc. (the "Company" ), a New Mexico corporation, hereby agrees with you as follows: SECTION 1. PURCHASE AND SALE OF BONDS. Section 1.1. Issue of Bonds. The Company has authorized the issue of Twelve Million Dollars ($12,000,000) in aggregate principal amount of its First Mortgage Bonds, Series C, 6.10%, due December 1, 2024 (herein called the "Bonds" ). The Bonds will be issued under and pursuant to the Third Amendment and Supplement to Indenture of Mortgage dated February 14, 1992 (the "Third Supplemental Indenture" ), dated as of December 15, 2004, between the Company and Wells Fargo Bank, N.A., as trustee (the "Trustee" ). The Third Supplemental Indenture modifies and amends that certain Indenture of Mortgage, dated February 14, 1992 (the "Original Indenture" ), between the Company and Sunwest Bank of Albuquerque, National Association, which later became Nations Bank, N.A., predecessor to Wells Fargo Bank New Mexico, N.A., predecessor to the Trustee. The Original Indenture was amended by (i) the First Supplement to Indenture of Mortgage dated February 14, 1992 (the "First Supplemental Indenture" ), dated as of May 15, 1992, (ii) the Second Amendment and Supplement to Indenture of Mortgage dated February 14, 1992 (the "Second Supplemental Indenture" ) dated as of October 21, 1996, and (iii) the Third Supplemental Indenture (the Original Indenture as so amended and as may be further amended from time to time, being the "Indenture" ). The Bonds will be secured pursuant to and entitled to all of the benefits of the Indenture. Certain capitalized terms used in this Agreement are defined in Section 5.1 of this Agreement. References to a "Schedule," "Annex" or "Exhibit" are, unless otherwise specified, to a Schedule, Annex or Exhibit attached to this Agreement. Each Bond: (a) will be in the amount of One Thousand Dollars ($1,000) or an integral multiple thereof; (b) will bear interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof from the date of the Bond at the rate of percent 6.10% per annum, payable semiannually on the first (1st) day of each June and December in each year commencing on the first Interest Payment Date next succeeding the date of such Bond until the principal amount thereof will be due and payable; provided that interest on any overdue principal, overdue Redemption Price and (to the fullest extent permitted by applicable law) overdue interest, shall accrue at a rate equal to the lesser of (i) the highest rate allowed by applicable law or (ii) six and ten hundredths percent (6.10%) per annum; (c) will mature on December 1, 2024; and (d) will be in the form of Bond set forth in Exhibit A to this Agreement. Section 1.2. The Closing . (a) Purchase and Sale of Bonds. The Company hereby agrees to sell to you and, subject to the terms and conditions set forth herein, you hereby agree to purchase from the Company, in accordance with the provisions of this Agreement, Bonds in the principal amount specified opposite your name on Annex 1 hereto, at a purchase price of one hundred percent (100%) of the principal amount thereof. Contemporaneously with entering into this Agreement, the Company is entering into separate Bond Purchase Agreements (the "Other Agreements" ) identical with this Agreement with each of the other purchasers named in Annex 1 (the "Other Purchasers" ), providing for the sale at such Closing to each of the Other Purchasers of Bonds in the principal amount specified opposite its name in Annex 1. Your obligation hereunder and the obligations of the Other Purchasers under the Other Agreements are several and not joint obligations and you shall have no obligation under any Other Agreement and no liability to any person for the performance or nonperformance by any Other Purchaser thereunder. (b) The Closing. The closing (the "Closing" ) of the purchase and sale of the Bonds to be purchased by you will be held at 11:00 a.m., Chicago time, on December 28, 2004 (the "Closing Date" ) at the office of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 or on such other Business Day thereafter on or prior to December 30, 2004 as may be agreed upon by the Company and you. At the Closing, the Company will deliver to you one or more Bonds (as set forth opposite your name on Annex 1 to this Agreement), in the aggregate principal amount of your purchase price thereof, dated the Closing Date and payable to you or payable as indicated on Annex 1 to this Agreement, against payment by federal funds wire transfer in immediately available funds of the purchase price thereof, as directed by the Company on Annex 2 to this Agreement. If at the Closing the Company shall fail to tender such Bonds to you as provided above in this Section 1.2, or any of the conditions specified in Section 3 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. Section 1.3. Certain Purchaser Representations. (a) Purchase for Investment. You represent that you are purchasing the Bonds for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Bonds have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Bonds. (b) You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source" ) to be used by you to pay the purchase price of the Bonds to be purchased by you hereunder: (i) if you are an insurance company, the Source is an "insurance company general account" (as the term is defined in Prohibited Transaction Exemption ( "PTE" ) 95-60 (issued July 12, 1995)) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the "NAIC Annual Statement" )) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with your state of domicile; or 2 (ii) the Source is a separate account that is maintained solely in connection with your fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or (iii) the Source is either (A) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or (B) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (iii), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (iv) the Source constitutes assets of an "investment fund" (within the meaning of Part V of PTE 84-14 (the "QPAM Exemption" ) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (A) the identity of such QPAM and (B) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (iv); or (v) the Source constitutes assets of a "plan(s)" (within the meaning of Section IV of PTE 96-23 (the "INHAM Exemption" )) managed by an "in-house asset manager" or "INHAM" (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more interest in the Company and (A) the identity of such INHAM and (B) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this paragraph (v); or (vi) the Source is a governmental plan; or (vii) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (vii); or (viii) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. As used in this Section 1.3(b), the terms "employee benefit plan", "governmental plan" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. SECTION 2. WARRANTIES AND REPRESENTATIONS. To induce you to enter into this Agreement and to purchase the Bonds listed on Annex 1 to this Agreement opposite your name, the Parent (solely with respect to the representations and warranties set forth in Section 2.4(a), Section 2.5, Section 2.12(a) and Section 2.12(b) and, insofar as such representations and warranties relate to the Parent, Section 2.10 and Section 2.15) and the Company (with respect to all representations and warranties other than those set forth in Section 2.4(a) and, 3 insofar as such representations and warranties relate to the Parent, Section 2.10, Section 2.12(a), Section 2.12(b) and Section 2.15) warrant and represent to you as of the Closing Date as follows: Section 2.1. Subsidiaries; Affiliates. The Company has no Subsidiaries. Part I of Annex 3 to this Agreement sets forth (a) the name of each of the Company's Affiliates and the nature of the affiliation and (b) the Company's directors and executive officers. Section 2.2. Corporate Organization and Authority. The Company: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of New Mexico; and (b) has all requisite corporate power and authority and all necessary licenses and permits to own and operate its Properties and to carry on its business as now conducted and as presently proposed to be conducted. Section 2.3. Indebtedness. Part II of Annex 3 to this Agreement correctly lists all outstanding indebtedness for borrowed money of the Company immediately prior to the Closing Date and after giving effect to the proposed use of the proceeds of the Bonds. Section 2.4. Financial Statements; Material Adverse Change . (a) Financial Statements—Parent. Copies have been delivered to you in the Placement Memorandum of the financial statements of the Parent and its Subsidiaries (i) in the Parent's Annual Report on Form 10-K for the year ended December 31, 2003 and (ii) in the Parent's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2004. All of said financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, and present fairly in all material respects the consolidated financial position of the Parent and its consolidated subsidiaries as of such dates and the results of their operations for such periods (subject, in the case of any interim financial statements, to normal year-end adjustments). All such consolidated financial statements include the accounts of the Company. (b) Financial Statements—Company . Copies have been delivered to you in the Placement Memorandum of (i) the audited financial statements of the Company for the year ended December 31, 2003 and (ii) the unaudited financial statements of the Company for the nine months ended September 30, 2004. All of said financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, and present fairly in all material respects, the financial position of the Company as of such dates and the results of its operations for such periods (subject, in the case of any interim financial statements, to normal year-end adjustments). (c) Material Adverse Change . Since December 31, 2003, there has been no change in the business, Properties or condition (financial or otherwise) of the Company except: (i) as disclosed to you in the Placement Memorandum or otherwise disclosed to you in this Agreement; and (ii) for other changes in the ordinary course of business that, in the aggregate, have not had a Material Adverse Effect. Section 2.5. Business, Property and Full Disclosure. The Confidential Private Placement Memorandum dated December, 2004 prepared by A.G. Edwards & Sons, Inc. and the documents included therein (collectively, the "Placement Memorandum" ) fairly describe, in all material respects, the general nature of the business and the Properties of the Company. The financial 4 statements referred to in Sections 2.4(a) and 2.4(b) do not, nor does this Agreement or the Placement Memorandum, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein or herein in light of the circumstances under which they are made, not misleading. Section 2.6. Pending Litigation. Except as disclosed on Annex 4 hereto, there are no proceedings, actions or investigations pending or, to the knowledge of the Company, threatened against or affecting the Company in any court or before any Governmental Authority or arbitration board or tribunal which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, except as has been disclosed in the Placement Memorandum or on Annex 4 hereto, no proceedings with respect to the condemnation of any Property of the Company are pending or, to the best knowledge of the Company, contemplated by any Governmental Authority to which the Property of the Company is subject. The Company is not in default with respect to any order of any court, Governmental Authority or arbitration board or tribunal. Section 2.7. Title to Properties. The Company has, and at the time of the Closing will have, good and marketable title to all of the fee interests in real Property, and good title to all of the other interests in Property, it purports to own, that individually or in the aggregate are Material, including Property reflected in the most recent balance sheet referred to in Section 2.4(b) of this Agreement and Property described in the Indenture as being subject to the Lien thereof, subject only to the Lien of the Indenture and other Permitted Encumbrances. Without limiting the generality of the foregoing, the Company has, as of the Closing Date, all water, water rights, rights to purchase water, water systems, water works, plants, pumps, tanks, pipes, strainers, fittings, valves, reservoirs, supplies and implements it purports to own, that individually or in the aggregate are Material, in each case owned by the Company subject only to the Lien of the Indenture and Permitted Encumbrances and without limitation as to time within which any such rights may be exercised. There are no Liens upon or other defects (including, without limitation, defects of the type which would be disclosed by a survey) in or to any of the real Property of the Company, or the title or interest of the Company in or to such real Property, which, individually or in the aggregate, would have a Material Adverse Effect. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. Section 2.8. Patents, Trademarks, Licenses, Etc. The Company owns or possesses, and upon completion of the Closing will own or possess, all of the franchises (including, without limitation, franchises granted by the NMPRC), patents, trademarks, service marks, trade names, copyrights, licenses and rights (including, without limitation, rights to produce and purchase water) necessary for the conduct of its business, without any known and material conflict with the rights of others, and all such franchises, patents, trademarks, service marks, trade names, copyrights, licenses and rights are valid and subsisting. To the Company's knowledge, no event has occurred which (a) permits, or after notice or lapse of time or both would permit, revocation or termination of any such license or franchise or (b) materially adversely affects any of the rights of the Company thereunder. Section 2.9. Authorization, Execution, Delivery and Enforceability . (a) Transactions are Legal and Authorized. The consummation by the Company of each of the Transactions: (i) is within the corporate powers of the Company; (ii) will not conflict with, result in any breach in any provisions of, constitute a default under, or result in the creation of any Lien upon any Property of the Company 5 under the provisions of any charter instrument or bylaw to which it or any of its Properties may be bound; (iii) will not conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company; (iv) will not violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company; or (v) will not conflict with, result in any breach in any of the provisions of, constitute a default under, or result in the creation of any Lien upon any Property of the Company under the provisions of, any agreement or instrument (other than its charter instrument or bylaw) to which it is a party or by which it or any of its Property may be bound, which could either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (b) Obligations are Enforceable. Each of this Agreement, the Third Supplemental Indenture and the Bonds has been duly authorized by all necessary corporate action on the part of the Company and has been executed and delivered by duly authorized officers of the Company. Each of this Agreement, the Indenture and the Bonds constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that the enforceability of this Agreement, the Indenture and the Bonds may be: (i) limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors' rights generally; and (ii) subject to the availability of equitable remedies. Section 2.10. No Defaults. To the knowledge of the Company and the Parent, no event has occurred and no condition exists which, upon the execution of this Agreement and the Third Supplemental Indenture and the issuance of the Bonds, would constitute a Default or an Event of Default. To the knowledge of the Company and the Parent, neither the Company nor the Parent is in violation in any respect of any term of any charter instrument or bylaw and neither the Company nor the Parent is in violation in any material respect of any term in any agreement or other instrument to which it is a party or by which it or any of its Property may be bound. To the knowledge of the Company and the Parent, no event has occurred or condition exists such that, but for the waiver by any Person (other than the Company or the Parent) of any term or provision in any agreement or other instrument to which the Company or the Parent is a party or by which it or any of its Property may be bound, the Company or the Parent would be in violation in any material respect of any of its obligations under such agreement or instrument. Section 2.11. Governmental Consent. As of the Closing, all consents, approvals, orders and authorizations required of or by any Governmental Authority, including, without limitation, the NMPRC, for the Company to consummate the Transactions will have been duly obtained, all related filings, registrations and qualifications will have been duly made, and no appeal from any such consent, approval, order or authorization of or by any Governmental Authority will be pending, including, without limitation, any such consent, approval, order or authorization of the NMPRC. Section 2.12. Taxes . (a) Returns Filed; Taxes Paid. All tax returns required to be filed by or on behalf of the Parent, the Company and any other Person with which the Parent or the Company files or has filed a consolidated return, in any jurisdiction have in fact been filed on a timely basis, and to 6 the knowledge of the Company and the Parent, all taxes, assessments, fees and other governmental charges upon the Parent or the Company, or upon any of their respective Properties, income or franchises, which are due and payable have been paid or will be paid prior to delinquency. Neither the Parent nor the Company knows of any proposed additional tax assessment against it or any such Person. To the knowledge of the Parent and the Company, there exists no controversy with any Governmental Authority with respect to the amount of any tax payable by the Parent or the Company to such Governmental Authority. (b) Book Provisions Adequate. The provisions for taxes (including, without limitation, any payment or payments owing from each of the Parent and the Company to any other Person pursuant to any tax sharing agreement among such Persons) on the books of the Company are adequate for all open years and for its current fiscal period. The amount of the liability for all taxes reflected in the consolidated balance sheet of the Parent and the Company as of December 31, 2003 is an adequate provision for such taxes (including, without limitation, any payment due pursuant to any such tax sharing agreement) as may be payable by the Parent or the Company (i) for the fiscal years 1999 through 2003, inclusive, with respect to federal income taxes, (ii) for the fiscal years 2000 through 2003, inclusive, with respect to New Mexico state income taxes and (iii) for the fiscal years 1999 through 2003, inclusive, with respect to California franchise taxes, in each case, the only fiscal years not closed by the statute of limitations or by completion of an audit. Section 2.13. Use of Proceeds. The Company will apply the proceeds from the sale of the Bonds solely to refinance the Company's First Mortgage Bonds, Series B, fund working capital needs and future capital expenditures. None of the transactions contemplated in this Agreement (including, without limitation, the use of the proceeds from the sale of the Bonds) violates, will violate or will result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Company does not own, or with the proceeds of the sale of the Bonds it does not intend to own, carry or purchase any "margin security" within the meaning of said Regulations T, U and X, including "margin securities" originally issued by the Company. This Agreement and the Bonds will not be secured by any "margin security," and no Bonds are being sold on the basis of any such collateral. None of the proceeds from the sale of the Bonds will be used to purchase or carry (or refinance any borrowing the proceeds of which were used to purchase or carry) any "security" within the meaning of the Securities Exchange Act of 1934, as amended. Section 2.14. Foreign Assets Control Regulations, Etc. Neither the sale of the Bonds by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. Without limiting the foregoing, the Company (a) is not and will not become a Person whose Property or interests in Property are blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) does not engage and will not engage in any dealings or transactions, or be otherwise associated, with any such person. The Company is in compliance, in all material respects, with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds from the sale of the Bonds hereunder will be used, directly or indirectly, for any payment to any governmental official or employee, political party, official of a political party, candidate for political office or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. 7 Section 2.15. Status under Certain Statutes. Neither the Parent nor the Company is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended. Section 2.16. Private Offering. Neither the Company nor anyone acting on its behalf has offered any of the Bonds or any similar Security of the Company for sale to, or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any prospective purchaser, other than the Purchasers and six (6) other Institutional Investors, each of whom was offered all or a portion of the Bonds at private sale for investment. The Company agrees that neither the Company nor anyone acting on its behalf will offer the Bonds or any part thereof or any similar Securities for issue or sale to, or solicit any offer to acquire any of the same from, anyone so as to bring the offering, issuance or sale of the Bonds within the registration provisions of Section 5 of the Securities Act. Section 2.17. Compliance with Law. To the knowledge of the Company, the Company: (a) is not in material violation of any law, ordinance, governmental rule, regulation, order or judgment of any court or other Governmental Authority or award of any arbitrator to which it is subject; or (b) has not failed to obtain any material license, permit, franchise or other governmental authorization necessary to the ownership of its Property or to the conduct of its business; which violation or failure to obtain might, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Section 2.18. Restrictions on Company. The Company: (a) is not a party to any contract or agreement ([other than the Indenture]) which restricts the right or ability of the Company to incur debt; or (b) has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its Property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by the Indenture. Section 2.19. Compliance with ERISA. (a) The Company and its Parent and each of its Subsidiaries have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or, to the knowledge of the Company, exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material. (b) Neither the Company nor any ERISA Affiliate is a party to, participates in, maintains, contributes to, or has any liability or contingent liability with respect to an employee benefit plan, which is subject to Title IV of ERISA. The Company does not have any expected post-retirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106). 8 The execution and delivery of this Agreement and the issuance and sale of the Bonds hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 2.19(c) is made in reliance upon and subject to the accuracy of your representation in Section 1.3(b) as to the sources of the funds used to pay the purchase price of the Bonds to be purchased by you. Section 2.20. Environmental Compliance. Except as set forth in Part III of Annex 3 hereto: (a) Compliance —to the knowledge of the Company, the Company is in compliance with all Environmental Protection Laws in effect in each jurisdiction where it is presently doing business, except such failures so to comply that would not, in the aggregate, be reasonably expected to have a Material Adverse Effect; (b) Liability —to the knowledge of the Company, the Company is not subject to any liability under any Environmental Protection Laws that, in the aggregate, could be reasonably expected to have a Material Adverse Effect; and (c) Notices —The Company has not received any: (i) written notice from any Governmental Authority by which any of its present or previously-owned or leased real Properties has been designated, listed, or identified in any manner by any Governmental Authority charged with administering or enforcing any Environmental Protection Law as a Hazardous Substance disposal or removal site, "Super Fund" clean-up site, or candidate for removal or closure pursuant to any Environmental Protection Law; (ii) written notice of any Lien arising under or in connection with any Environmental Protection Law that has attached to any revenues of, or to any of its owned or leased real Properties; or (iii) summons, citation, notice, directive, letter, or other communication, written or oral, from any Governmental Authority concerning any intentional or unintentional action or omission by the Company in connection with its ownership or leasing of any real Property resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any Hazardous Substance into the environment resulting in any material violation of any Environmental Protection Law; in the case of clauses (ii) and (iii) above, where the effect of which could be reasonably expected to have a Material Adverse Effect. Section 2.21. Restricted Third-Party Encumbrances. The easements owned by the Company referenced by numbers 47 through 56, inclusive, 73, 74 and 90 to Exhibit A to the Title Commitment are encumbered by Restricted Third-Party Encumbrances as reflected on Exhibit B to the Title Commitment. The information set forth in Part IV of Annex 3 to this Agreement with respect to the Property subject to such Restricted Third Party Encumbrances, the Company's use of such Properties and the nature of such Restricted Third Party Encumbrances is true, accurate and complete in all material respects. Other than those Properties listed in the first sentence of this Section 2.21 and described in Part IV of Annex 3 to this Agreement, the Company owns no Property which is subject to Restricted Third Party Encumbrances. Those Properties listed in the first sentence of this Section 2.21 and described in Part IV of Annex 3 to this Agreement are subject to no Restricted Third Party Encumbrances other than those reflected on Exhibit B to the Title Commitment. Such Restricted Third Party Encumbrances do not, and the exercise of such remedies as would foreclose or terminate the right or interest of the Company in or to such Property by the Persons who hold such Restricted Third Party Encumbrances would not be likely 9 to, individually or in the aggregate, have a material adverse effect upon the business, profits, Properties (taken as a whole) or condition (financial or otherwise) of the Company or the ability of the Company to consummate the Transactions or perform its obligations set forth in this Agreement, the Bonds or the Indenture. The easements referenced by numbers 91 through 93, inclusive, to Exhibit A to the Title Commitment are grants by the fee owners of the Properties underlying such easements of general Utility easements in favor of no specified Person. The Company has the right to use each of such easements for the purposes for which the Company is now using them. SECTION 3. CLOSING CONDITIONS. Your obligation to purchase and pay for the Bonds to be delivered to you at the Closing will be subject to the following conditions precedent: Section 3.1. Opinions of Counsel. You shall have received (a) a closing opinion dated the Closing Date from Latham & Watkins LLP, counsel for the Company satisfactory in form and substance to you covering the matters set forth in Exhibit B1; and (b) from (i) Montgomery & Andrews, P.A., special counsel for the Company, (ii) David Blackner as Senior Counsel for the Trustee and (iii) Chapman and Cutler, your special counsel, closing opinions, each dated as of the Closing Date, and substantially in the respective forms set forth in Exhibits B2, B3 and B4 to this Agreement. Section 3.2. Warranties and Representations True; No Prohibited Action . (a) Warranties and Representations True . The warranties and representations of the Company and the Parent contained in Section 2 of this Agreement will be true when made and at the time b of Closing. (b) No Prohibited Action . Neither the Parent nor the Company shall have taken any action or permitted any condition to exist which would constitute a Default or an Event of Default. Section 3.3. Compliance with this Agreement. The Company will have performed and complied with all agreements and conditions contained herein which are required to be performed or complied with by the Company before or at the Closing. Section 3.4. Officers' Certificates. You will have received: (a) a certificate dated the Closing Date and signed by (i) the Chairman of the Board or the President and (ii) the Vice President and General Manager of the Company, substantially in the form of Exhibit C1 to this Agreement with respect to the matters therein set forth; (b) a certificate dated the Closing Date and signed by (i) the President or a Vice President and (ii) the Chief Financial Officer of the Parent, substantially in the form of Exhibit C2 to this Agreement with respect to the matters therein set forth; (c) a certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of the Company, substantially in the form of Exhibit D1 to this Agreement, with respect to the matters therein set forth; and (d) a certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of the Parent, substantially in the form of Exhibit D2 to this Agreement, with respect to the matters therein set forth. Section 3.5. Purchase Permitted By Applicable Law, Etc. On the date of the Closing your purchase of Bonds shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the 10 character of the particular investment, (ii) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (iii) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted. Section 3.6. Regulatory Approvals. The issue and sale of the Bonds shall have been duly authorized by order of the NMPRC , such order shall be in full force and effect at the time of the Closing and all appeal periods applicable to such order shall have expired. Section 3.7. Third Supplemental Indenture. The Company and the Trustee shall have executed and delivered the Third Supplemental Indenture in the form set forth in Exhibit E to this Agreement, and you shall have received an executed original counterpart of such Third Supplemental Indenture. Section 3.8. Filing and Recordation. The Indenture, the Third Supplemental Indenture and all financing statements (including any financing statements required to be filed under the provisions of the New Mexico Uniform Commercial Code) shall have been duly recorded and filed in such manner and in such place as is required by law to establish, preserve and protect the Lien on all collateral specifically or generally described in the Indenture as subject to such Lien and under the laws enforced, and it will not be necessary to rerecord any such documents. Section 3.9. Title Insurance. The Trustee shall have received a policy of title insurance or the Title Commitment committing to issue the same in form and substance satisfactory to you, from Fidelity National Title Insurance Company insuring the Trustee and the holders of the Bonds issued under the Indenture against loss or damage to the extent of $12,000,000 plus costs as permitted by the policy by reason of any defect in the Lien of the Indenture on the Property (other than Excepted Property and the parcels identified on Exhibit A to the Original Indenture as not being insured by a policy of title insurance) described therein or by reason of the title to the Property being other than as shown in such policy. Such policy (or the Title Commitment to issue the same) shall extend to the Property (other than uninsurable Property) identified on Exhibit A to the Original Indenture and to the additional Property being added to the Lien of the Indenture by virtue of the Second Supplemental Indenture and the Third Supplemental Indenture. You shall have received a copy of such policy of title insurance or the Title Commitment. Section 3.10. Indenture Conditions. All conditions precedent set forth in the Indenture with respect to consummation of any of the Transactions shall have been satisfied. Without limiting the generality of the foregoing, the Company's Bondable Capacity and Net Earnings for Interest shall be sufficient to permit the issuance of the Bonds. Section 3.11. Sale of Other Bonds. Contemporaneously with the Closing, the Company shall sell to the Other Purchasers, and the Other Purchasers shall purchase the Bonds to be purchased by them at the Closing as specified in Annex 1. Section 3.12. Payment of Special Counsel Fees. Without limiting the provisions of Section 6.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of your special counsel to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing. Section 3.13. Private Placement Number. A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Bonds. 11 Section 3.14. Proceedings Satisfactory. All proceedings taken in connection with the sale of the Bonds and all documents and papers relating thereto will be reasonably satisfactory to you. You will have received copies of such documents and papers as you may reasonably request in connection therewith (including, without limitation, copies of all certificates delivered to the Trustee in connection with the consummation of the Transactions), all in form and substance reasonably satisfactory to you; provided, however, that you agree that all documents the forms of which are annexed hereto as exhibits shall be in form and substance reasonably satisfactory to you if duly authorized, executed and delivered in the respective forms set forth in such exhibits. SECTION 4. AGREEMENTS OF THE COMPANY. Section 4.1. Financial and Business Information. The Company will deliver to each holder of the Outstanding Bonds that is an Institutional Investor: (a) Quarterly Statements —as soon as practicable after the end of each fiscal quarter of each fiscal year of the Company (other than the last fiscal quarter of each fiscal year), and in any event within sixty (60) days thereafter, duplicate copies of: (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter; and (ii) consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries, for such quarter and for the portion of the fiscal year ending with such quarter; setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail and certified as being complete and correct, and as having been prepared in conformity with generally accepted accounting principles, subject to changes resulting from year-end adjustments, by the Chief Financial Officer or Treasurer of the Company; (b) Annual Statements —as soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days thereafter, commencing with the Company's 2004 fiscal year, duplicate copies of: (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year; and (ii) consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such year; setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by an opinion thereon of KPMG LLP or other independent certified public accountants of recognized national standing or recognized regional standing selected by the Company, which opinion shall, without qualification, state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows in conformity with generally accepted accounting principles, that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards and that such audit provides a reasonable basis for such opinion in the circumstances; (c) Audit Reports —promptly upon receipt thereof, one copy of each other report submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary; (d) SEC and Other Reports of the Company and the Parent —promptly upon their becoming publicly available, one copy of each financial statement, report, notice or proxy 12 statement sent by the Company to its stockholders generally, and of each regular or periodic report and any registration statement, prospectus or written communication in respect thereof filed by the Company or the Parent with, or received by it in connection therewith from, any securities exchange or the Securities and Exchange Commission or any successor agency, and one copy of each financial statement, report, notice or proxy statement sent by the Parent to its stockholders generally; (e) ERISA —promptly upon becoming aware of the occurrence of: (i) any material "reportable event" (as such term is defined in Section 4043 of ERISA) with respect to which the reporting requirement has not been waived; or (ii) any material transaction prohibited by Section 406 of ERISA or any nonexempt "prohibited transaction" (as such term is defined in Section 4975 of the IRC); in connection with any Pension Plan or any trust created thereunder, a written notice specifying the nature thereof, what action, if any, the Company is taking or proposes to take with respect thereto, and, when known, any action taken by the IRS, the Department of Labor or the PBGC with respect thereto; (f) ERISA Waivers —prompt written notice of and a description of any request pursuant to Section 303 of ERISA or Section 412 of the IRC for, or notice of the granting pursuant to said Section 303 or Section 412 of, a waiver in respect of all or part of the minimum funding standard set forth in ERISA or the IRC, as the case may be, of any Pension Plan, and, in connection with the granting of any such waiver, the amount of any "waived funding deficiency" (as such term is defined in said Section 303 or said Section 412) and the terms of such waiver; provided, however, that no such notice need be given if the amount of any waived funding deficiency shall not be material in the context of the business, profits, Properties or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole; (g) Other ERISA Notices —prompt written notice of and, where applicable, a description of: (i) any notice from the PBGC in respect of the commencement of any proceedings pursuant to Section 4042 of ERISA to terminate any Pension Plan or for the appointment of a trustee to administer any Pension Plan; (ii) any distress termination notice delivered to the PBGC under Section 4041 of ERISA in respect of any Pension Plan, and any determination of the PBGC in respect thereof; (iii) the placement of any Multiemployer Plan in reorganization status under Title IV of ERISA; (iv) any Multiemployer Plan becoming "insolvent" (as such term is defined in Section 4245 of ERISA); (v) the complete or partial withdrawal of the Company or any ERISA Affiliate from any Multiemployer Plan and the withdrawal liability incurred in connection therewith; and (vi) the withdrawal of the Company or any ERISA Affiliate from any Pension Plan with respect to which it is a "substantial employer" as defined in ERISA and the withdrawal liability under Section 4063 of ERISA incurred in connection therewith; (h) Notice of Default or Event of Default —immediately upon becoming aware of the existence of any condition or event which constitutes a Default or an Event of Default, a 13 written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; (i) Notice of Claimed Default —immediately upon becoming aware that the holder of any Bond or of any evidence of indebtedness or other Security of the Company or any Subsidiary has given notice or taken any other action with respect to a claimed Event of Default or default under such Bond, evidence of indebtedness or Security, a written notice specifying the notice given or action taken by such holder and the nature of the claimed Event of Default or default and what action the Company is taking or proposes to take with respect thereto; (j) Notices from Governmental Authority —promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; (k) Information Required By Indenture —all information, notices, certificates and opinions required by the terms of the Indenture to be delivered to the holders of the Bonds; and (l) Requested Information —with reasonable promptness, such other data and information reasonably available to the Company as from time to time may be reasonably requested. Without limiting the generality of the foregoing, the Company will deliver to you or any successor or transferee the information required by 17 C.F.R. §230.144A in connection with any transfer or proposed transfer of Bonds by you or any successor or transferee pursuant thereto. Section 4.2. Officers' Certificates. Each set of financial statements delivered to any Institutional Investor of the Bonds pursuant to Section 4.1(a) or Section 4.1(b) of this Agreement will be accompanied by a certificate of the Chairman of the Board or the President and the Vice President and General Manager of the Company setting forth: (a) Covenant Compliance —the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Article VI of the Indenture during the period covered by the income statement then being furnished; and (b) Event of Default —a statement that the signers have reviewed the relevant terms of this Agreement and the Indenture and have made, or caused to be made, under their supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the accounting period covered by the income statements being delivered therewith to the date of the certificate and that such review has not disclosed the existence during such period of any condition or event which constitutes a Default or an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company has taken or proposes to take with respect thereto. Section 4.3. Accountants' Certificates. Each set of annual financial statements delivered pursuant to Section 4.1(b) will be accompanied by a certificate of the accountants who certify the financial statements of the Company, stating that they have reviewed Sections 6.01, 6.03, 6.06, 6.10 and 6.14 of the Indenture and stating further, whether, in making their audit, such accountants have become aware of any condition or event which then constitutes a Default or an Event of Default (whether or not as a result of failure by the Company to comply with any of Sections 6.01, 6.03, 6.06, 6.10 or 6.14 of the Indenture), and, if any such condition or event then exists, specifying the nature and period of existence thereof. 14 Section 4.4. Inspection. The Company will permit any of your representatives, while you or your nominee holds any Bond, or the representatives of any other Institutional Investor of the Bonds, at your or such holder's expense (except during the continuance of any Default or Event of Default, in which case, at the Company's expense), upon reasonable prior notice to the Company, to visit and inspect any of the Properties of the Company or any Subsidiary, to examine all their books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (and by this provision the Company authorizes said accountants to discuss the finances and affairs of the Company and its Subsidiaries) all at such reasonable times and as often as may be reasonably requested. Section 4.5. Report to NAIC. Concurrently with the delivery to you of each annual statement required by Section 4.1(b) hereof, the Company will deliver a copy thereof to: Securities Valuation Office, National Association of Insurance Commissioners, 195 Broadway, New York, New York 10007. Section 4.6. Hazardous Substances Indemnification. The Company shall indemnify, defend and hold you harmless from and against any loss or liability directly or indirectly arising out of the use, generation, manufacture, production, storage, release, threatened release, discharge or disposal of any Hazardous Substances in or about the Property of the Company, the Parent or any of their Subsidiaries. This indemnification provision shall apply whether the Hazardous Substances are in, on, under or about the Property or operations of the Company, the Parent or any of their Subsidiaries. The foregoing indemnification includes but is not limited to reasonable attorneys' fees (including the allocated cost of in-house counsel and staff). The foregoing indemnification extends to you, your parent, your subsidiaries and all of your or their directors, officers, employees, agents, successors, attorneys and assigns. This indemnification provision shall survive repayment of the Company's obligations under the Bonds, and payment shall not be a condition precedent to recovery upon the foregoing indemnification provisions. In the event that you receive a claim, demand or action for which you believe that indemnification will or may be required pursuant to this Section, you agree to so notify the Company in writing promptly (and in any event within twenty (20) days after your receipt of such claim, and/or action). Upon receipt of such notice from you, the Company shall have the right to defend such claim, demand or action by legal counsel selected by the insurance carrier for the Company, or selected by the Company and reasonably satisfactory to you. Such right shall be exercised by written notice to you given within twenty (20) days after the Company's receipt of your notice. If the Company elects to undertake your defense, and so long as the Company continues such defense, you agree that: (a) you shall not admit any liability or enter into any settlement of any such claim or action without, in any such case, the prior written consent of the Company, which shall not be unreasonably withheld or delayed; (b) you shall be entitled to retain separate legal counsel as you select. However, the Company shall not be obligated to reimburse you for any costs or fees of such separate counsel (including in-house counsel or staff); and (c) you shall cooperate as reasonably requested by the Company in the defense and settlement of any such claim or action; provided, however, that you need not be required to incur or sustain any out-of-pocket costs. If, however, the Company fails to undertake your defense within the time or in the manner herein provided or thereafter abandons such defense or fails to diligently prosecute the same, you shall thereafter be entitled to all benefits of the foregoing indemnification provision, including the right to 15 defend or settle any such claim or action upon such terms as you shall select and to recover from the Company all amounts expended by you to pay any judgment, award or settlement and all costs and fees incurred by you in such defense, settlement or both. SECTION 5. INTERPRETATION OF THIS AGREEMENT. Section 5.1. Terms Defined. As used in this Agreement, the following terms have the respective meanings set forth below or set forth in the Section of this Agreement or the Indenture following such term: " Affiliate " means, at any time, and with respect to any Person, (1) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 5% or more of any class of voting or equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 5% or more of any class of voting or equity interests. As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an " Affiliate " is a reference to an Affiliate of the Company. " Bond Purchase Agreement "—this Agreement. " Bondable Capacity "—Section 4.02A of the Indenture. " Bonds "—Section 1.1 of this Agreement. " Business Day "—a day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed (other than a general bank holiday or moratorium, in either case of longer than 4 calendar days). " Closing "—Section 1.2 of this Agreement. " Closing Date "—Section 1.2 of this Agreement. " Collateral "—all of that Property subject to the Lien of the Indenture. " Company "—the introductory sentence of this Agreement. " Default "—Section 1.01 of the Indenture. " Environmental Protection Law "—means any federal, state, county, regional or local law, statute, or regulation (including, without limitation, (a) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980; (b) the Resource Conservation and Recovery Act of 1976; (c) the Superfund Amendments and Reauthorization Act of 1986; (d) the Federal Water Pollution Control Act; and (e) the Clean Water Act of 1977; in each case, as amended from time to time, and together with all rules and regulations promulgated in connection therewith) enacted by any Governmental Authority in connection with or relating to the protection or regulation of the environment, including, without limitation, those | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
