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Exhibit 1.2
ORION POWER HOLDINGS, INC.
[___] CONVERTIBLE SENIOR NOTES DUE 2008
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UNDERWRITING AGREEMENT
May [_], 2001
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Brown Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Credit Suisse First Boston Corporation
As Independent Underwriter
11 Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
Orion Power Holdings, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of $200,000,000 principal amount of [___] Convertible Senior Notes due 2008 (the
"Firm Notes") and up to an aggregate of $30,000,000 principal amount of [___]
Convertible Senior Notes due 2008 (the "Optional Notes" and, together with the
Firm Notes, the "Notes"). The Notes will be convertible into shares of common
stock, $.01 par value (the "Common Stock"), of the Company. As used herein,
"Conversion Shares" means the shares of Common Stock into which the Notes are
convertible.
The Company and the Underwriters, in accordance with the requirements
of Rule 2720 ("Rule 2720") of the National Association of Securities Dealers,
Inc. (the "NASD") and subject to the terms and conditions stated herein, also
hereby confirm the engagement of the services of Credit Suisse First Boston
Corporation (the "Independent Underwriter") as a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720 in connection
with the offering and sale of the Notes.
It is understood and agreed to by all parties that the Company and
the Selling Stockholders named therein are concurrently entering into an
agreement (the "Common Stock Underwriting Agreement") providing for the sale by
the Company and the Selling Stockholders of up to a total of 14,950,000 shares
of common stock (the "Shares") including the overallotment option thereunder,
through arrangements with Goldman Sachs & Co. and certain underwriters. Anything
herein or therein to the contrary notwithstanding, the respective closings under
this
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Agreement and the Common Stock Underwriting Agreement are hereby expressly made
independent of one another. Two forms of prospectus are to be used in connection
with the offering and sale of the Shares and the Notes contemplated by the
foregoing, one relating to the Shares hereunder and the other relating to the
Notes.
1. (a) The Company represents and warrants to, and agrees
with, each of the Underwriters and the Independent Underwriter that:
(i) A registration statement on Form S-1 (File No.
333-60796) (the "Initial Registration Statement") in respect of the
Notes and the Conversion Shares has been filed with the Securities
and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto, to you
for each of the other Underwriters, have been declared effective by
the Commission in such form; other than a registration statement, if
any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended (the "Act"), which became effective upon filing,
no other document with respect to the Initial Registration Statement
has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus related to the Notes included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 6(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; such form of final prospectus related to the Notes, in
the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. or by the Independent Underwriter expressly for
use therein;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will
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conform, in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. or by the Independent Underwriter expressly for
use therein;
(iv) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest unaudited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital
stock, stockholders' equity or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"),
otherwise than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries have good and
marketable title in fee simple to all material real property and good
and marketable title to all material personal property owned by them,
in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such property and buildings
by the Company and its subsidiaries except as described in the
Prospectus;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, and each
subsidiary of the Company has been duly incorporated, organized or
formed and is validly existing as a corporation, partnership or
limited liability company, as the case may be, in good standing under
the laws of its jurisdiction of incorporation, organization and
formation;
(vii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly
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and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Common Stock contained in the
Prospectus; the Conversion Shares initially issuable upon conversion
of the Notes have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the
provisions of the Notes and the Indenture referred to below, will be
duly and validly issued, fully paid and non assessable and will
conform to the description of the Common Stock contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, except
for the security interests granted pursuant to the Ohio Power New
York L.P. Credit Facility, the Ohio Power Midwest L.P. Credit
Facility and the Liberty Electric Power, LLC Credit Facility, as set
forth in the Prospectus and for such liens, encumbrances, equities or
claims that would not have a Material Adverse Effect;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The Notes to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and,
when issued and delivered pursuant to this Agreement and the
Indenture (as hereinafter defined), will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture, to be dated as of May [__], 2001 (the
"Indenture"), between the Company and Wilmington Trust Company, as
Trustee (the "Trustee") under which they are to be issued, which will
be substantially in the form filed as an exhibit to the Registration
Statement enforceable in accordance with their terms; the Indenture
has been duly authorized and duly qualified under the Trust Indenture
Act and, when executed and delivered by the Company and the Trustee,
the Indenture will constitute a valid and legally binding instrument
of the Company, enforceable in accordance with its terms, subject, in
case of the Notes and the Indenture, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Notes and the Indenture will
conform in all material respects to the descriptions thereof in the
Prospectus and will be in substantially the form previously delivered
to you;
(xi) The issue and sale of the Notes to be sold by the
Company hereunder and the compliance by the Company with all of the
provisions of the Indenture and this Agreement and the consummation
of the transactions herein and therein contemplated (i) will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) will not result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company and (iii) will not result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries
or any of their properties; except in the cases of clauses (i) and
(iii) as would not, singly or in the aggregate, have a Material
Adverse Effect; and no consent, approval, authorization, order,
registration, filing or qualification
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of or with any such court or governmental agency or body is required
for the issue and sale of the Notes and the Conversion Shares (when
issued) or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except as such have
been obtained, the registration under the Act of the Notes and the
Conversion Shares, such as have been obtained under the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Notes and the Conversion Shares by the
Underwriters;
(xii) Neither the Company nor any of its subsidiaries (i)
is in violation of its Certificate of Incorporation or Certificate of
Formation, as applicable, or by-laws, partnership agreement or
limited liability company agreement, as applicable, or (ii) in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, except in the case of clause (ii) as would
not, singularly or in the aggregate, have a Material Adverse Effect;
(xiii) The statements set forth in the Prospectus under
the caption "Description of Convertible Notes" and "Description of
Capital Stock," insofar as they purport to constitute a summary of
the terms of the Notes and the Common Stock and under the captions
"Underwriting," "Risk Factors- We are subject to stringent
governmental regulation, which may be burdensome or lead to
significant costs or liabilities," "Risk Factors- We have agreed to
provide all of the energy required by Duquesne Light Company to
satisfy its provider of last resort obligation, which could result in
significant losses to us," "Business" and "Certain Relationships and
Related Party Transactions" insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xiv) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect on
the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and, to the best of the Company's knowledge, no such proceedings are
threatened by governmental authorities or threatened by others
against the Company or any of its subsidiaries;
(xv) The Company is not and, after giving effect to the
offering and sale of the Notes, will not be an "investment company,"
as such term is defined in the United States Investment Company Act
of 1940, as amended (the "Investment Company Act");
(xvi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xvii) Arthur Andersen LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder;
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(xviii) The Company and its subsidiaries have complied in
all material respects with all laws, regulations and orders
applicable to it or its businesses the violation of which would have
a Material Adverse Effect;
(xix) The Company and its subsidiaries own, license or
possess or have the right to use or acquire the 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 and trade names (collectively, the "Intellectual Property")
presently employed by them in connection with, and material to,
collectively or in the aggregate, the operation of the businesses now
operated by them taken as a whole, and neither the Company nor any of
its subsidiaries has received any written notice of infringement of
or conflict with asserted rights of others with respect to the
foregoing which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect;
(xx) The Company and its subsidiaries possess all
certificates, authorizations, licenses or permits issued by
appropriate governmental agencies or bodies necessary to conduct the
business now operated by them the lack of which would not result in a
Material Adverse Effect and have not received any written notice of
proceedings relating to the revocation or modification of any such
certificate, authorization, license or permit that, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect other
than as set forth in the Prospectus;
(xxi) No labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company
is imminent that is reasonably likely to have a Material Adverse
Effect;
(xxii) Other than as set forth in the Prospectus, neither
the Company nor any of its subsidiaries is in violation of any
statute, rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, "Environmental
Laws"). To the knowledge of the Company, neither the Company nor any
of its subsidiaries owns or operates any real property contaminated
with any substance that is subject to any Environmental Laws, is
liable for any off-site disposal or contamination pursuant to any
Environmental Laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse
Effect other than as set forth in the Prospectus;
(xxiii) All tax returns required to be filed by the
Company and its subsidiaries in all jurisdictions have been timely
and duly filed or legally extended, other than those filings being
contested in good faith and those where the failure to file would not
have a Material Adverse Effect. There are no tax returns of the
Company or any of its subsidiaries that are currently being audited
by state, local, or federal taxing authorities or agencies (and with
respect to which the Company or any of its subsidiaries has received
written notice), where the findings of such audit, if adversely
determined, would result in a Material Adverse Effect. All taxes,
including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such
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entities have been paid, other than those being contested in good
faith and for which adequate reserves have been provided or those
currently payable without penalty or interest and other than those
that are not material or that would not result in a Material Adverse
Effect other than as set forth in the Prospectus;
(xxiv) The Company and its subsidiaries maintain insurance
covering their respective properties, operations, personnel and
businesses which insures against such losses and risks as are
adequate in accordance with its reasonable business judgment to
protect the Company, its subsidiaries and their respective
businesses. Neither the Company nor any of its subsidiaries has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other material expenditures will
have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force on the date hereof and
will be outstanding and duly in force at the Time of Delivery;
(xxv) The Company has no reason to believe that the
sources from which the statistical data included in the "Business"
section of the Prospectus are based on or derived from are not
reliable and accurate;
(xxvi) Neither the Company nor any of its subsidiaries is
(i) subject to regulation as a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" of a subsidiary or
holding company or a "public utility company" under Section 2(a) of
the Public Utility Holding Company Act of 1935, (ii) subject to
regulation under the Federal Power Act, as amended, other than due to
its subsidiaries' status as power marketers and owners of certain
electric transmission facilities subject to the Federal Power Act,
and its subsidiaries have all exemptions and waivers from regulation
as typically granted by FERC to power marketers or entities with
market based authority affiliated with utilities, or (iii) subject to
any state law or regulation with respect to the rates or financial or
organizational regulation of electric utilities, other than due to
its subsidiaries' status as "electric corporations" under New York
law subject to lightened regulation, except as otherwise disclosed in
the Prospectus;
(xxvii) Each of the power generation projects in which the
Company or its subsidiaries has an interest, which is subject to the
requirements under the Public Utility Regulatory Policies Act of
1978, as amended, and the regulations of FERC promulgated thereunder,
as amended from time to time, necessary to be a "qualifying
cogeneration facility" and/or a "qualifying small power production
facility" meets such requirements or will meet such requirement;
(xxviii) Each of the power generation projects in which
the Company or its subsidiaries has an interest, which is subject to
the requirements under the Federal Power Act discussed in Paragraph
(xxvi) above, meets the requirements for, and has obtained from FERC,
Exempt Wholesale Generator Status, under Section 32 of the Public
Utility Holding Company Act of 1935, as amended, and FERC's
regulations; and
(xix) None of the transactions contemplated by this
Agreement (including, without limitation, the use of proceeds from
the sale of the Notes) will violate or result in a violation of
Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.
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2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of [___]% of the principal amount thereof, plus accrued
interest, if any, the principal amount of Firm Notes set forth opposite the name
of such Underwriter in Schedule I hereto and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Notes as
provided below, the Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a purchase price of [___]% of the principal amount thereof, plus
accrued interest, if any, that portion of the principal amount of Optional Notes
set forth opposite the name of such Underwriter in Schedule I hereto as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractions of $1,000) determined by multiplying such number of Optional
Notes by a fraction the numerator of which is the maximum number of Optional
Notes which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Notes that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase
at their election up to $30,000,000 in aggregate principal amount of Optional
Notes, at the purchase price set forth in the paragraph above, for the sole
purpose of covering sales of Notes in excess of the number of Firm Notes. Any
such election to purchase Optional Notes may be exercised only by written notice
from you to the Company, given within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of Optional Notes
to be purchased and the date on which such Optional Notes are to be delivered,
as determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 5 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of the release of the Firm Notes,
the several Underwriters propose to offer the Firm Notes for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Company hereby confirms its engagement of the services of
the Independent Underwriter as, and the Independent Underwriter hereby confirms
its agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720 with respect to
the offering and sale of the Notes.
(b) The Independent Underwriter hereby represents and
warrants to, and agrees with, the Company and the Underwriters that
with respect to the offering and sale of the Notes as described in
the Prospectus:
(i) The Independent Underwriter constitutes a
"qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720;
(ii) The Independent Underwriter has
participated in the preparation of the Registration
Statement and the Prospectus and has exercised the usual
standards of "due diligence" in respect thereto;
(iii) The Independent Underwriter has
undertaken the legal responsibilities and liabilities of
an underwriter under the Act specifically including those
inherent in Section 11 thereof;
(iv) Based upon (A) a review of certain
available business and financial information relating to
the Company, including the Registration Statement, certain
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other information, including financial forecasts, provided
by the Company, and meetings with the Company's management
to discuss the business and prospects of the Company, (B)
consideration of financial data of the Company and the
comparison of that data with similar data for publicly
traded companies in businesses similar to those of the
Company, as well as consideration of such other
information, financial studies, analyses and
investigations and financial, economic and market criteria
the Independent Underwriter deemed relevant, and assuming
that the offering and sale of the Notes is made as
contemplated herein and in the Prospectus, the Independent
Underwriter recommends, as of the date of the execution
and delivery of this Agreement, that the yield at which
the Notes be distributed to the public be no lower than
[___]%, which yield should in no way be considered or
relied upon as an indication of the value of the Notes;
and
(v) Subject to the provisions of Section 8
hereof, the Independent Underwriter will
furnish to the Company a letter, dated
the date of this agreement, in form and
substance satisfactory to the Underwriters,
to the effect of clause (iv) above.
(c) The Independent Underwriter hereby agrees with the
Company and the Underwriters that, as part of its services hereunder,
in the event of any amendment or supplement to the Prospectus, the
Independent Underwriter will render services as a "qualified
independent underwriter" within the meaning of Section (b)(15) of
Rule 2720 with respect to the offering and sale of the Notes as
described in the Prospectus as so amended or supplemented that are
substantially the same as those services being rendered with respect
to the offering and sale of the Notes as described in the Prospectus
(including those described in subsection (b) above).
(d) The Company, the Underwriters and the Independent
Underwriter agree to comply in all material respects with all of the
requirements of Rule 2720 applicable to them in connection with the
offering and sale of the Notes. The Company agrees to cooperate with
the Underwriters and the Independent Underwriter to enable the
Underwriters to comply with Rule 2720 and the Independent Underwriter
to perform the services contemplated by this Agreement.
(e) As compensation for the services of the Independent
Underwriter hereunder, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred in connection
with this Agreement and the services to be rendered hereunder.
5. (a) The Notes to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Notes in book-entry form and
shall be delivered by or on behalf of the Company to Goldman, Sachs & Co.,
through the facilities of The Depository Trust Company ("DTC") or its designated
custodian, for the account of such Underwriter, against payment by or on behalf
of such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Goldman, Sachs & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Notes to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Notes, 9:30 a.m., New York City time, on _________ [__], 2001 or on
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing, and, with respect to the Optional Notes, 9:30 a.m., New York City
time, on
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the date specified by Goldman, Sachs & Co. in the written notice given by
Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Notes, or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Notes is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Notes, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery
by or on behalf of the parties hereto pursuant to Section 8 hereof,
including the cross-receipt for the Notes and any additional
documents requested by the Underwriters pursuant to Section 8(n)
hereof, will be delivered at the offices of Latham & Watkins, 885
Third Avenue, New York, New York, 10022 (the "Closing Location"), and
the Notes will be delivered at the Designated Office, all at each
Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next
preceding each Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of
this Section 5, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or
obligated by law or executive order to close.
6. The Company agrees with each of the Underwriters and with the
Independent Underwriter:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by
you promptly after reasonable notice thereof; to advise you and the
Independent Underwriter, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you and the
Independent Underwriter with copies thereof; to advise you and the
Independent Underwriter promptly after it receives notice thereof of
the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Notes or
the Conversion Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Notes for offering and sale
under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Notes; provided that in
connection
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therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters and the Independent
Underwriter with copies of the Prospectus in New York City in such
quantities as you and the Independent Underwriter may reasonably
request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Notes and
the Conversion Shares and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or,
if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus in order to comply with the Act,
to notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Notes at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that
are substantially similar to the Notes, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Stock or any such
substantially similar securities (other than (i) pursuant to this
agreement, (ii) pursuant to the Common Stock Underwriting Agreement,
(iii) pursuant to employee stock option plans existing on, or upon
the conversion, exercise or exchange of convertible, exercisable or
exchangeable securities outstanding as of, the date of this Agreement
or (iv) Common Stock, warrants to purchase Common Stock, or
securities convertible or exchangeable into Common Stock issued in
connection with acquisitions and joint ventures that are used or
useful for the Company's business, provided that the recipients agree
to similar restrictions for the period beginning the date hereof and
continuing to and including the date 90 days after the date of this
Prospectus);
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(f) To furnish to its stockholders or file with the
Commission by EDGAR as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year, to make available to
its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are
available, (A) copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed
and (B) the documents specified in Section[s] ______ [and ______] of
the Indenture as in effect at such Time of Delivery; and (ii) such
additional information concerning the business and financial
condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to
the Commission);
(h) To use the net proceeds received by it from the sale
of the Notes pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds";
(i) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling
the Company to satisfy any obligations to issue Conversion Shares;
(j) To use its best efforts to list, subject to notice of
issuance, the Conversion Shares on the New York Stock Exchange;
(k) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act; and
(l) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at
the time of filing either pay to the Commission the filing fee for
the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
7. The Company covenants and agrees with the several Underwriters and
the Independent Underwriter that (a) the Company will pay or cause to be paid
the following: (i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Notes and the
Conversion Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters, the Independent
Underwriter and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof)
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and any other documents in connection with the offering, purchase, sale and
delivery of the Notes; (iii) all expenses in connection with the qualification
of the Notes and Conversion Shares for offering and sale under state securities
laws as provided in Section 6(b) hereof, including the fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky surveys; (iv)[this section intentionally deleted];
and (v) the filing fees incident to, and the fees and disbursements of counsel
for the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of
the Notes; and (b) the Company will pay or cause to be paid: (i) the cost of
preparing the Notes; (ii) the fees and expenses of the Trustee and any agent of
the Trustee and the reasonable fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Notes; (iii) the cost and
charges of any transfer agent or registrar; and (iv) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 10 and 13 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Notes by them, and any
advertising expenses connected with any offers they may make. The fees and
disbursements of counsel for the Underwriters referred to in clauses (iii) and
(v) of this section will be, in the aggregate, $7,500.
8. The respective obligations of the Underwriters and the Independent
Underwriter hereunder, as to the Notes to be delivered at each Time of Delivery,
shall be subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company herein are, at and as of such
Time of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, the
condition (in the case of the Underwriters) that the Independent Underwriter
shall have furnished to the Company the letter referred to in clause (v) of
Section 4(b) hereof and the following additional conditions:
(a) Latham & Watkins, counsel for the Underwriters, shall
have furnished to you such written opinion in the form attached as
Annex I hereto, dated such Time of Delivery, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
(b) Stroock & Stroock & Lavan LLP, counsel for the
Company, shall have furnished to you their written opinion in the
form attached as Annex II hereto, dated the Time of Delivery.
(c) Kirkland & Ellis, counsel for the Company, shall have
furnished to you their written opinion in the form attached as Annex
III hereto, dated the Time of Delivery.
(d) Thelen Reid & Priest LLP, counsel for the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in the form of Annex IV hereto.
(e) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Arthur Andersen LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect
previously agreed and attached hereto as Annex VII;
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(f) (i) Neither the Company nor any of its subsidiaries,
on a consolidated basis, shall have sustained since the respective
dates as of which information is given in the Registration Statement
and the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates
as of which information is given in the Prospectus there shall not
have been any change in the capital stock, stockholders' equity or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the
Underwriters so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Notes being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization," as that
term is defined by the Commission for purposes of Rule 436(g)(2)
under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities;
(h) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iv) in the
judgment of the Underwriters makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Notes being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) The Conversion Shares shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange;
(j) [this section intentionally deleted];
(k) The Indenture shall have been duly executed and
delivered by the Company and the Trustee and the Notes shall have
been duly executed and delivered by the Company and duly
authenticated by the Trustee;
(l) The Company has obtained and delivered to the
Underwriters executed copies of a lock-up agreement attached hereto
as Annex VIII from each of the stockholders of the Company listed on
Schedule III hereto;
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(m) The Company shall have complied with the provisions of
Section 6(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(n) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of
the Company, satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all of
their respective obligations hereunder to be performed at or prior to
such Time of Delivery.
9. The Independent Underwriter hereby consents to the references to
it as set forth under the caption "Underwriting" in the Prospectus and in any
amendment or supplement thereto made in accordance with Section 6(a) hereof.
10. (a) The Company will indemnify and hold harmless each Underwriter
and the Independent Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or the Independent
Underwriter, as the case may be, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter or
the Independent Underwriter, as the case may be, for any reasonable legal or
other expenses reasonably incurred by such Underwriter or the Independent
Underwriter, as the case may be, in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman, Sachs &
Co. or by the Independent Underwriter expressly for use therein or constitutes a
reference to the Independent Underwriter consented to by it pursuant to Section
9 hereof. In addition, the Company will indemnify and hold harmless the
Independent Underwriter against any losses, claims, damages or liabilities,
joint or several, to which the Independent Underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the Independent
Underwriter's acting (or alleged failing to act) as a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720 and will
reimburse the Independent Underwriter for any legal or other expenses reasonably
incurred by the Independent Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
(b) Each Underwriter will indemnify and hold harmless the
Company and the Independent Underwriter, as the case may be, against
any losses, claims, damages or liabilities to which the Company or
the Independent Underwriter, as the case may be, may become subject,
under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any
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amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
Goldman, Sachs & Co. expressly for use therein; and will reimburse
the Company and the Independent Underwriter, as the case may be, for
any reasonable legal or other expenses reasonably incurred by the
Company and the Independent Underwriter, as the case may be, in
connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) The Independent Underwriter will indemnify and hold
harmless the Company and each Underwriter against any losses, claims,
damages or liabilities to which the Company or such Underwriter, as
the case may be, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by the Independent
Underwriter expressly for use therein or constitutes a reference to
the Independent Underwriter consented to by it pursuant to Section 9
hereof; and will reimburse the Company or each Underwriter, as the
case may be, for any reasonable legal or other expenses reasonably
incurred by the Company or each Underwriter, as the case may be, in
connection with investigating or defending any such action or claim
as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against an indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action
shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (which shall not, except with
the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall,
without the
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written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect
to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 10
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a), (b) or (c) above in respect of any
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages or liabilities (or actions
in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by each party to this Agreement from
the offering of the Notes. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law
or if the indemnified party failed to give the notice required under
subsection (d) above, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of each party to this Agreement
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by each of the Company, each Underwriter
and the Independent Underwriter shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received
by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes
purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company, an Underwriter or the Independent
Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. Each of the Company, each Underwriter and the Independent
Underwriter agrees that it would not be just and equitable if
contributions pursuant to this subsection (e) were determined by pro
rata allocation (even if the Underwriters and the Independent
Underwriter were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to
include any reasonable legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter nor the Independent Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Notes underwritten by it and distributed
to the public were offered to the public, and the Independent
Underwriter shall not be required to contribute any amount in excess
of the amount by which the total price at which the Notes
underwritten by the Underwriters and distributed to the public were
offered to the public exceeds the amount
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of any damages which such Underwriter or Independent Underwriter, as
the case may be, have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company under this Section 10
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter or the Independent
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 10 shall be in addition to any
liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of, and to each person, if any, who controls the Company or
the Independent Underwriter within the meaning of the Act; and the
obligations of the Independent Underwriter under this Section 10
shall be in addition to any liability which the Independent
Underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of, and to each person,
if any, who controls the Company or any Underwriter within the
meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to
purchase the Notes which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Notes on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Notes, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Notes on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Notes, or the Company notifies you
that it has so arranged for the purchase of such Notes, you or the Company shall
have the right to postpone such Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the
aggregate principal amount of such Notes which remains unpurchased
does not exceed one-eleventh of the aggregate principal amount of all
of the Notes to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Notes which such
Underwriter agreed to purchase hereunder at such Time of Delivery
and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Notes
which such Underwriter agreed to purchase hereunder) of the Notes of
such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
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(c) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the
aggregate principal amount of such Notes which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of all of the
Notes to be purchased at such Time of Delivery, or if the Company
shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Notes of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to
the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Company to sell Optional Notes) shall thereupon
terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 7 hereof and
the indemnity and contribution agreements in Section 10 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability
for its default.
12. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters and
the Independent Underwriter, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter, the Independent
Underwriter or any controlling person of any Underwriter, the Independent
Underwriter or the Company, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Notes.
13. If this Agreement shall be terminated pursuant to Section 11
hereof, the Company shall not then be under any liability to any Underwriter or
the Independent Underwriter except as provided in Section 4(e) hereof and in
Sections 7 and 10 hereof; but, if for any other reason any Notes are not
delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Notes not so delivered, but the Company shall then be under no
further liability to any Underwriter or the Independent Underwriter in respect
of the Notes not so delivered except as provided in Section 4(e) hereof and in
Sections 7 and 10 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Underwriters.
All statements, requests, notices and agreements hereunder shall be in writing,
and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Underwriters in care of Goldman, Sachs &
Co., One Liberty Plaza, 7th Floor, New York, New York 10006, facsimile (212)
902-3000, Attention: Registration Department; if to the Independent Underwriter
shall be delivered or sent by mail, letter or facsimile transmission to Credit
Suisse First Boston Corporation, 11 Madison Avenue, New York, New York 10010;
facsimile (212) [ ]; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary, with a copy to Martin H. Neidell,
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, NY 10038, facsimile
(212) 806-6006; provided, however, that any notice to an Underwriter pursuant to
Section 10(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such
19
20
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Independent Underwriter, the Company and, to
the extent provided in Sections 10 and 12 hereof, the officers and directors of
the Company and each person who controls the Company, the Independent
Underwriter or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Notes from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
16. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us eight counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Underwriters and the Independent Underwriter,
this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters, the Independent Underwriter and the Company. It
is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
[Signature Pages Follow]
20
21
Very truly yours,
Orion Power Holdings, Inc.
By:__________________________________________
Name: W. Thaddeus Miller
Title: Executive Vice President
Underwriting Agreement Signature Page
22
Accepted as of the date hereof at New York, New York:
Goldman, Sachs & Co.
By: ________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
Underwriting Agreement Signature Page
23
Accepted as of the date hereof at New York, New York:
Credit Suisse First Boston Corporation, as Independent Underwriter
By: ________________________
(Credit Suisse First Boston Corporation)
Underwriting Agreement Signature Page
24
SCHEDULE I
PRINCIPAL AMOUNT OF
OPTIONAL NOTES TO BE
PRINCIPAL AMOUNT OF FIRM PURCHASED IF MAXIMUM
NOTES TO BE PURCHASED OPTION EXERCISED
Underwriter
Goldman, Sachs & Co. [ ] [ ]
Credit Suisse First Boston Corporation [ ] [ ]
Deutsche Banc Alex. Brown Inc. [ ] [ ]
Merrill Lynch, Pierce, Fenner & Smith Incorporated [ ] [ ]
Total ................................................... [ $200,000,000] [ $30,000,000]
Schedule I
25
SCHEDULE II
STOCKHOLDERS SUBJECT TO SECTION 7(k) RESTRICTIONS
GS Capital Partners II, L.P.
GS Capital Partners II Offshore, L.P.
GS Capital Partners II Germany, C.L.P.
Stone Street Fund 1998, L.P.
Bridge Street Fund 1998, L.P.
GS Capital Partners III, L.P.
GS Capital Partners III Offshore, L.P.
GS Capital Partners III Germany, C.L.P.
Stone Street Fund 2000, L.P.
Bridge Special Opportunities Fund 2000, L.P.
Constellation Enterprises, Inc.
DGC Nevada Development, Inc.
Diamond Cayman, Inc.
Mitsubishi International Corporation
Tokyo Electric Power Company International B.V.
Jack A. Fusco
Scott B. Helm
W. Thaddeus Miller
E. Thomas Webb
Michael J. Gluckman
Frederic V. Salerno
Cheryl Mills
Vincent Tese
Schedule II
26
ANNEX I
FORM OF LATHAM & WATKINS OPINION
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Brown Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: Orion Power Holdings, Inc.
Ladies and Gentlemen:
We have acted as your special counsel in connection with
the sale to you on the date hereof by Orion Power Holdings, Inc., a Delaware
corporation (the "Company"), of $230,000,000 in aggregate principal amount of
the Company's [___] Convertible Senior Notes due 2008 (the "Notes"), pursuant to
a registration statement on Form S-1 under the Securities Act of 1933, as
amended (the "Act"), filed with the Securities and Exchange Commission (the
"Commission") on May 11, 2001 (File No. 333-60796), covering $230,000,000 in
aggregate principal amount of the Notes, as amended on May 18, 2001 (the
"Registration Statement"), a Prospectus dated May [ ], 2001 filed with the
Commission pursuant to Rule 424(b) under the Act (the "Prospectus"), an
underwriting agreement dated May [ ], 2001 among you and the Company (the
"Underwriting Agreement") and an Indenture, dated the date hereof (the
"Indenture") between the Company and Wilmington Trust Company, as trustee (the
"Trustee"). This opinion is being rendered to you pursuant to Section 8(a) of
the Underwriting Agreement.
As such counsel, we have made such legal and factual
examinations and inquiries as we have deemed necessary or appropriate for
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to authentic original documents of all documents submitted to
us as copies. As to facts material to the opinions, statements and assumptions
expressed herein, we have, with your consent, relied upon oral or written
statements and representations of officers and other representatives of the
Company and others. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject
transaction only of the federal laws of the United States, the internal laws of
the State of New York and the General Corporation Law of the State of Delaware,
and we express no opinion with respect to the applicability thereto, or the
effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws, or as to any matters of municipal law or the laws of
any local agencies within any state.
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Whenever a statement herein is qualified by "to the best
of our knowledge" or a similar phrase, it is intended to indicate that those
attorneys in this firm who have rendered legal services in connection with the
above transaction do not have current actual knowledge of the inaccuracy of such
statement. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of any such
statement, and no inference that we have any knowledge of any matters pertaining
to such statement should be drawn from our representation of you.
Capitalized terms used herein without definition have the
meanings assigned to them in the Underwriting Agreement.
Subject to the foregoing and the other matters set forth
herein, it is our opinion that, as of the date hereof:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of Delaware.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The Indenture has been duly authorized, executed and delivered by the
Company and is the legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms.
4. The Notes to be issued and sold by the Company pursuant to the
Underwriting Agreement have been duly authorized and, when issued to
and paid for by you and the other Underwriters in accordance with the
terms of the Underwriting Agreement will be legally valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms.
5. The shares of common stock initially issuable upon conversion of the
Notes have been duly authorized and reserved for issuance upon
conversion of the Notes and, when issued and delivered upon
conversion of the Notes in accordance with the terms of the
Indenture, will be validly issued, fully paid and non-assessable and,
to the best of our knowledge, free of preemptive rights.
6. The statements set forth in the Prospectus under the heading
"Underwriting", insofar as such statements constitute a summary of
legal matters, are accurate in all material respects.
7. The Registration Statement has become effective under the Act and, to
the best of our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the Act and no
proceedings therefor have been initiated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) under the
Act has been made in accordance with Rules 424(b) and 430A under the
Act.
8. The Registration Statement and the Prospectus comply as to form in
all material respects with the requirements for registration
statements on Form S-1 under the Act and the rules and regulations of
the Commission thereunder; it being understood, however, that we
express no opinion with respect to the financial statements,
schedules
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28
or other financial data included in, or omitted from, the
Registration Statement or the Prospectus. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, we have assumed that the statements made therein are
correct and complete.
In addition, we have participated in conferences with officers and
other representatives of the Company, counsel to the Company, representatives of
the independent public accountants for the Company and your representatives, at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although we are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus and have not made any
independent check or verification thereof, during the course of such
participation, no facts came to our attention that caused us to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, schedules or
other financial data included in, or omitted from, the Registration Statement or
the Prospectus.
This opinion is rendered only to you as Underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
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29
ANNEX II
FORM OF STROOCK & STROOCK & LAVAN LLP OPINION
June [4], 2001
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Brown Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
We have acted as counsel to Orion Power Holdings, Inc., a
Delaware corporation (the "Company"), in connection with (i) the Company's
Registration Statement on Form S-1 (Registration No. 333-60796) (the
"Registration Statement"), filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and (ii) the sale by the Company of up to $230,000,000 in aggregate
principal amount of the Company's [___] Convertible Senior Notes due 2008 (the
"Notes"), pursuant to the Underwriting Agreement, dated as of May [__], 2001
(the "Underwriting Agreement"), by and among the Company and you, as
Underwriters named in Schedule I thereto (the "Underwriters"). As used herein,
"Conversion Shares" means the shares of common stock into which the Notes are
convertible.
We are rendering this opinion to you pursuant to Section 8(b)
of the Underwriting Agreement. Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Underwriting
Agreement.
We have examined copies of each of (i) the Underwriting
Agreement, (ii) the Registration Statement and the exhibits thereto, (iii) the
Company's Prospectus relating to the Notes being offered dated May [__], 2001
(the "Prospectus") and (iv) the Certificate of Incorporation (the "Certificate
of Incorporation") and Bylaws (the "Bylaws") of the Company, as in effect on the
date hereof. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records of the Company, and
such documents, records, agreements, instruments and certificates of officers
and representatives of the Company and others, and have made such examinations
of law, as we have deemed necessary to form the basis of the opinions
hereinafter expressed. In such examinations, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as
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30
originals and the conformity to originals of all documents submitted to us as
copies thereof. As to various questions of fact material to the opinions
expressed below, we have relied upon (i) the representations and warranties of
the Company contained in the Underwriting Agreement or made pursuant thereto or
in connection with the closing thereunder and (ii) statements by and
certificates of officers and representatives of the Company and others.
Attorneys involved in the preparation of this opinion are
admitted to practice law in the State of New York and we do not purport to
express any opinion herein concerning any law other than the laws of the State
of New York, the federal laws of the United States of America (except for FERC
and FPA matters as to which we do not express any opinions), the General
Corporation Law of the State of Delaware and the Delaware Revised Uniform
Limited Partnership Act.
For purposes of this letter, we have assumed that the
Underwriting Agreement is a valid and binding obligation of each of you and the
other Underwriters and is enforceable against each of you and the other
Underwriters in accordance with its terms.
When reference is made in this opinion to "our knowledge" or
to what is "known to us," it means, unless otherwise indicated, the actual
knowledge attributable to our representation of the Company of only those
partners and associates who have given substantive attention to the Underwriting
Agreement, the Registration Statement, the Prospectus and the sale of the Notes.
With respect to our opinion expressed in paragraphs 1, 3 and 4
below relating to the good standing and valid existence of each of the Company
and its subsidiaries, we have relied, with your permission, solely upon good
standing certificates of public officials or upon confirmation via facsimile of
good standing as an existing corporation or partnership from such public
officials, copies of which are being delivered concurrently herewith.
With reference to our opinion in paragraphs 7 and 8 below, our
opinion is limited to (i) review of only those laws and regulations that, in our
experience, are normally applicable to transactions of the type contemplated by
the Underwriting Agreement, and (ii) does not include, and we express no opinion
as to the application of, any federal (including the FERC and FPA) or state laws
or regulations regarding the generation, transmission, marketing or sale of
electricity or the ownership or operation of power plants. In addition, we
express no opinion as to the statutes and ordinances, administrative decisions
and rules and regulations of counties, towns, municipalities and special
political subdivisions, or judicial decisions to the extent they deal therewith.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus.
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the shares of Common Stock initially issuable upon
conversion of the Notes have been duly and validly authorized and reserved
for issuance and, when issued and delivered in accordance with the
provisions of the Notes and the Indenture, will be duly and validly issued
and fully paid and non-assessable, and will
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conform to the description of the stock contained in the Prospectus; and
the Notes conform to the description contained in the Prospectus.
3. The Company and its subsidiaries listed on Schedule (3) have been duly
qualified as a foreign corporation or limited partnership, as the case may
be, for the transaction of business and are in good standing under the
laws of the jurisdictions set forth on Schedule (3).
4. Each subsidiary of the Company listed on Schedule (3) is validly existing
as a corporation, limited liability company or limited partnership, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation or organization with corporate or partnership power and
authority to own its properties and conduct its business as described in
the Prospectus.
5. To our knowledge and other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to our knowledge, no such
proceedings are threatened by governmental authorities or threatened by
others against the Company or any of its subsidiaries.
6. The Indenture has been duly authorized, executed and delivered by the
Company and, assuming the Indenture is a valid and legally binding
obligation of the Trustee, constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
7. The Notes have been duly authorized, executed and issued by the Company
and, assuming due authentication thereof by the Trustee and upon payment
and delivery in accordance with the terms of the Underwriting Agreement,
will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith and
fair dealing; and the Notes, when issued and delivered, will conform to
the description thereof contained in the Prospectus;
8. The statements made in the Prospectus under the caption "Certain U.S.
Federal Income Tax Consequences," insofar as they purport to constitute
summaries of matters of United States federal tax law and regulations or
legal conclusions with respect thereto, constitute accurate summaries of
the matters described therein in all material respects;
9. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
10. The issue and sale of the Notes and the compliance by the Company with all
of the provisions of the Underwriting Agreement and the Indenture and the
consummation of the transactions therein contemplated will not conflict
with or result in a material breach or violation of any of the terms or
provisions of, or constitute a default under the agreements listed on
Exhibit [4.1] through Exhibit [4.4] or Exhibit [10.1 through Exhibit
10.28] to the Registration Statement, which have been identified to us in
an officer's certificate as being
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all of the agreements that are material to the Company and its
subsidiaries taken as a whole, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company, or the Delaware General Corporation Law or any federal or
New York statute, order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties. We express no opinion with
respect to any such conflict, breach, violation or default not readily
ascertainable from the face of any such agreement, or arising under or
based upon any cross-default provisions insofar as it relates to a default
under an agreement not identified to us, or arising under or based upon
any covenant of a financial or numerical nature or requiring computation.
11. No consent, approval, authorization, order, registration, filing or
qualification of or with any such court or governmental agency or body is
required under federal or New York law or the Delaware General Corporation
Law for the issue and sale of the Notes or the consummation by the Company
of the transactions contemplated by the Underwriting Agreement, except as
such have been obtained, the registration under the Act of the Conversion
Shares, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Notes by the
Underwriters.
12. The statements set forth in the Prospectus under the caption "Description
of Convertible Notes" and "Description of Capital Stock" insofar as they
purport to constitute a summary of certain of the terms of the Notes and
the Common Stock, and under the captions "Risk Factors-We have agreed to
provide all of the energy required by Duquesne Light Company to satisfy
its provider of last resort obligation, which could result in significant
losses to us," "Business" (other than the subheading "Regulation")
"Certain Relationships and Related Party Transactions," "Description of
Indebtedness," "Certain Relationships and Related Party Transactions," and
"Underwriting" insofar as they purport to describe the provisions of the
laws and documents referred to therein accurately and fairly summarize
such terms and such provisions, respectively, in all material respects.
13. The Company is not subject to registration as an "investment company," as
such term is defined in the Investment Company Act.
14. The Registration Statement has become effective under the Act and the
Prospectus was filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
or proceeding for that purpose has been instituted or threatened by the
Commission.
15. To our knowledge, there are no contracts or documents of a character
required by the Act or the rules and regulations thereunder to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not described or filed
as required by the Act or the rules and regulations thereunder.
The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the date hereof
(other than the financial statements and related schedules therein, as to which
we express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder; and although
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Prospectus,
except for those referred to in paragraph 9 above, we have no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the date hereof (other than the
financial statements and related schedules therein, as to which we express no
opinion) contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, not misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to the date hereof
(other than the financial statements and related schedules therein, as to
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which we express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the Company
prior to the date hereof (other than the financial statements and related
schedules therein, as to which we express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or that, as of the date hereof, either the
Registration Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to the date hereof (other than the financial
statements and related schedules therein, as to which we express no opinion)
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
This opinion is furnished solely for your benefit and may not
be used or relied upon by any other person without our express written consent.
Very truly yours,
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SCHEDULE (3)
JURISDICTIONS IN WHICH QUALIFIED AND
NAME OF ENTITY: IN GOOD STANDING:
1. Orion Power Holdings, Inc. Maryland
2. Orion Power New York, L.P. New York
3. Orion Power Midwest, L.P. Pennsylvania
3. Liberty Electric Power, LLC
Schedule (3)
35
ANNEX III
KIRKLAND & ELLIS OPINION
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Brown Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
We are issuing this opinion letter as special energy
regulatory counsel to Orion Power Holdings, Inc., a Delaware corporation (the
"Company"), in connection with the issuance and sale by the Company of an
aggregate of up to $230,000,000 principal amount of its [___] Convertible Senior
Notes due 2008 (the "Notes"), pursuant to the Underwriting Agreement, dated as
of [ ], 2001 (the "Underwriting Agreement"), between the Company and the
Underwriters named in Schedule I thereto (the "Underwriters"). This opinion is
being delivered to you pursuant to Section 8(c) of the Underwriting Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Underwriting Agreement, provided
that references to any document means documents in the form executed and
delivered as of the date hereof.
The following is based exclusively on specific federal, New
York, Pennsylvania and Ohio energy regulatory statutes and orders, rules or
regulations regarding (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants. Subject to the
assumptions, qualifications, exclusions and other limitations which are
identified in this letter, we advise you that:
(a) The statements in the Prospectus under the captions
"Risk Factors - The rules and regulations in the various regional
market structures in which we compete are subject to change, which
may impact our ability to compete and our profitability," "Risk
Factors - We are subject to stringent governmental regulation, which
may be burdensome or lead to significant costs or liabilities," "Risk
Factors -- The substantial ownership interest in us by certain of our
stockholders could hinder our ability to obtain governmental approval
for future acquisitions or enter additional markets," "Business -
Regulation- Federal Energy Regulation," and "Business-Regulation --
State Energy Regulation," insofar as such statements purport to
describe the laws or proceedings referred to therein, are fair and
accurate summaries of such laws and regulations and such proceedings
in all material respects. This opinion is based exclusively on
specific federal, New York, Pennsylvania and Ohio energy regulatory
statutes and orders, rules or regulations regarding (a) the
generation, transmission, marketing or sale of electricity or (b) the
ownership or operation of power plants.
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(b) To our knowledge, except as set forth in the
Prospectus, neither the Company nor any of its subsidiaries is (i)
subject to regulation as a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" of a subsidiary or
holding company or a "public utility company" under Section 2(a) of
the Public Utility Holding Company Act of 1935, (ii) subject to
regulation under the Federal Power Act of 1920, as amended, other
than as contemplated by 18 C.F.R. Section 292.601(c) and other than
due to its subsidiaries' status as power marketers and owners of
certain electric transmission facilities subject to the Federal Power
Act, and its subsidiaries have all exemptions and waivers from
regulation as typically granted by FERC to power marketers or
entities with market based authority affiliated with utilities, or
(iii) subject to any state law or regulation with respect to the
rates or financial or organizational regulation of electric
utilities, other than due to its subsidiaries' status as "electric
corporations" under New York law subject to lightened regulation.
This opinion is based exclusively on specific federal, New York,
Pennsylvania and Ohio energy regulatory statutes and orders, rules or
regulations regarding (a) the generation, transmission, marketing or
sale of electricity or (b) the ownership or operation of power
plants.
(c) The issue and sale of the Notes and the compliance by
the Company with all of the provisions of the Underwriting Agreement
and the consummation of the transactions contemplated therein will
not result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties. This opinion is based exclusively on specific
federal, New York, Pennsylvania and Ohio energy regulatory statutes
and orders, rules or regulations regarding (a) the generation,
transmission, marketing or sale of electricity or (b) the ownership
or operation of power plants.
(d) No consent, approval, authorization, order, or
registration of or with any court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by
the Company of the transactions contemplated by the Underwriting
Agreement, except for consents, approvals, authorizations, orders, or
regulations associated with the issue and sale of the Notes, which
have been obtained. This opinion is based exclusively on specific
federal, New York, Pennsylvania and Ohio energy regulatory statutes
and orders, rules or regulations regarding (a) the generation,
transmission, marketing or sale of electricity or (b) the ownership
or operation of power plants.
For purposes of this opinion letter, we have relied, without
investigation, upon each of the following assumptions: (i) Each document
submitted to us for review is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; (ii)
there are no agreements or understandings among the parties, written or oral,
and there is no usage of trade or course of prior dealing among the parties that
would, in either case, define, supplement or qualify the terms of the
Underwriting Agreement; (iii) the constitutionality or validity of a relevant
statute, rule, regulation or agency action is not in issue; (iv) all parties to
the Underwriting Agreement will act in accordance with, and will refrain from
taking any action that is forbidden by, the terms and conditions of the
Underwriting Agreement; (v) all agreements other than the Underwriting Agreement
(if any) with respect to which we have provided advice in our letter or reviewed
in connection with our letter would be enforced as written; (vi) the Company and
its subsidiaries will not in the future take any discretionary action (including
a
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decision not to act) permitted under the Underwriting Agreement that would
result in a violation of law or constitute a breach or default under any other
agreements or court orders to which the Company or its subsidiaries may be
subject; (vii) except for those governmental and regulatory approvals that we
have specifically opined upon herein, the Company and its subsidiaries have
obtained (and will in the future obtain) all permits and governmental approvals
required, and have taken (and will in the future take) all actions required,
relevant to the consummation of the transactions or performance of the
Underwriting Agreement; and (viii) each person who has taken any action relevant
to any of our opinions in the capacity of director or officer was duly elected
to that director or officer position and held that position when such action was
taken. In addition, we have relied without any independent verification upon:
(i) information contained in certificates and approvals obtained from
governmental authorities; (ii) factual information contained in applications to
governmental authorities, the Underwriting Agreement; and (iii) factual
information we have obtained from such other sources as we have deemed
reasonable. We have assumed without investigation that there has been no
relevant change or development between the dates as of which the information
cited in the preceding sentence was given and the date of this letter and that
the information upon which we have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of each opinion, we have relied upon decisions issued by governmental
authorities in each relevant jurisdiction, and such opinion is not intended to
provide any conclusion or assurance beyond that conveyed by that decision.
While we have not conducted any independent investigation to
determine facts upon which our opinions are based or to obtain information about
which this letter advises you, we confirm that we do not have any actual
knowledge which has caused us to conclude that our reliance and assumptions
cited in the preceding paragraph are unwarranted or that any information
supplied in this letter is wrong. The term "knowledge" whenever it is used in
this letter with respect to our firm means conscious awareness at the time this
letter is delivered on the date it bears by the following Kirkland & Ellis
lawyers who have reviewed the Underwriting Agreement (herein called "our
Designated Transaction Lawyer"): Mitchell F. Hertz.
Our advice on every legal issue addressed in this letter is
based exclusively on the specific federal or New York, Pennsylvania and Ohio
energy regulatory statutes and orders, rules or regulations regarding (a) the
generation, transmission, marketing or sale of electricity or (b) the ownership
or operation of power plants. We advise you that issues addressed by this letter
may be governed in whole or in part by other laws, but we express no opinion as
to whether any relevant difference exists between the laws upon which our
opinions are based and any other laws which may actually govern. We also advice
you that we are members of the bars of the District of Columbia and New York
State and are not members of the bars of Pennsylvania or Ohio. We are not
providing this opinion letter except in our capacity as special energy
regulatory legal counsel to the Company on issues relating to the Federal Energy
Regulatory Commission ("FERC"), the New York Public Service Commission
("NYPSC"), the Pennsylvania Public Utilities Commission ("PPUC") and the Public
Utilities Commission of Ohio ("PUCO") and offer no opinions on environmental or
other matters relating to (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants, whether or not
addressed in the Prospectus or the Underwriting Agreement.
Our advice on each legal issue addressed in this letter
represents our opinion as to how that issue would be resolved were it to be
considered by the highest court of the jurisdiction upon whose law our opinion
on that issue is based. The manner in which any particular issue would be
treated in any actual court case would depend in part on facts and circumstances
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particular to the case, and this letter is not intended to guarantee the outcome
of any legal dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date
it bears. We do not assume any obligation to provide you with any subsequent
opinion or advice by reason of any fact about which our Designated Transaction
Lawyers did not have actual knowledge at that time, by reason of any change
subsequent to that time in any law covered by any of our opinions, or for any
other reason.
You may rely upon this letter only for the purpose served by
the provisions in the Underwriting Agreement cited in the initial paragraph of
this letter in response to which it has been delivered. Without our written
consent: (i) no person other than you may rely on this letter for any purpose;
(ii) this letter may not be cited or quoted in any financial statement,
prospectus, private placement memorandum or other similar document; (iii) this
letter may not be cited or quoted in any other document or communication which
might encourage reliance upon this letter by any person or for any purpose
excluded by the restrictions in this paragraph; and (iv) except as required by
law, copies of this letter may not be furnished to anyone (except to the
Underwriters) for purposes of encouraging such reliance; provided that any
Person who becomes an Underwriter on or after the date hereof may rely on this
opinion as if it were addressed to such Person on and as of the Time of
Delivery, subject to the limitations contained in this paragraph.
Sincerely,
-------------------------------
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ANNEX IV
FORM OF THELEN REID & PRIEST LLP OPINION
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
This firm has acted as special environmental counsel to Orion Power Holdings,
Inc., a Delaware corporation (the "Company") on certain limited matters with
regard to the issuance and sale by the Company of up to $230,000,000 in
aggregate principal amount of its [___] Convertible Senior Notes due 2008 (the
"Notes") pursuant to the Underwriting Agreement, dated as of [ ], 2001 (the
"Underwriting Agreement") between the Company and the Underwriters named in
Schedule I thereto (the "Underwriters"). This opinion is being delivered to you
pursuant to Section 8(d) of the Underwriting Agreement. In our review, we have
assumed the accuracy and completeness of all statements of fact relating to the
Company and its operations and products and have made no independent
investigation for purposes of rendering this opinion. This opinion relates
solely to matters of environmental law.
We are licensed and authorized to practice law under the laws of the United
States and the states of New York and California. This opinion relates solely to
environmental laws and legal documents or proceedings promulgated under the laws
of the United States and the state of New York and we do not offer any opinions
regarding laws or legal proceedings outside those jurisdictions.
We express no opinion regarding the requirements, status or need for FERC
certification or compliance with FERC's guidelines, rules or regulations.
Based on and subject to the foregoing, we are of the opinion that the statements
in the Prospectus under the captions "Risk Factors - The costs of compliance
with existing and future environmental regulations could adversely affect our
cash flow and profitability" and "Risk Factors - We are subject to stringent
governmental regulation, which may be burdensome or lead to significant costs or
liabilities" and [under the caption] "Business-Regulation-Environmental
Regulation," solely insofar as such statements purport to describe the laws or
legal documents or legal proceedings referred to therein, are fair and accurate
summaries of such laws and regulations and such legal documents and proceedings
in all material respects.
This opinion speaks only as of the date hereof and not to any prior or
subsequent date, and we assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion. This opinion has been
prepared solely for your use in connection with the offering of the securities
and may not be used, quoted or otherwise referred to or relied upon by any
person or entity without the prior written consent of this firm.
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Very truly yours,
THELEN REID & PRIEST LLP
-------------------------------
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ANNEX VII
FORM OF ARTHUR ANDERSEN LLP COMFORT LETTER
[IN FORM AND SUBSTANCE PREVIOUSLY AGREED TO BY THE UNDERWRITERS' COUNSEL]
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ANNEX VIII
FORM OF STOCKHOLDERS' LOCK-UP AGREEMENT
Orion Power Holdings, Inc.
Lock-up Agreement
May __, 2001
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Brown Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Underwriters named in Schedule I to the
Convertible Notes Underwriting Agreement
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Re: Orion Power Holdings, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Goldman, Sachs & Co., Credit Suisse
First Boston Corporation, Deutsche Banc Alex. Brown Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as underwriters (the "Underwriters"),
propose to enter into an underwriting agreement (the "Underwriting Agreement")
with Orion Power Holdings, Inc., a Delaware corporation (the "Company"),
providing for a public offering of up to an aggregate of $230,000,000 principal
amount of [__]% Convertible Senior Notes due 2008 of the Company (the
"Convertible Notes"), pursuant to a Registration Statement on Form S-1 filed
with the Securities and Exchange Commission (the "SEC"). The Convertible Notes
will be convertible into shares of common stock, $.01 par value (the "Common
Stock"), of the Company.
In consideration of the agreement by the Underwriters to offer and
sell the Convertible Notes, and of other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the undersigned agrees
that, during the period beginning from the date of the final Prospectus covering
the public offering of the Convertible Notes and continuing to and including the
date 90 days after the date of such final Prospectus, the undersigned will not
offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of any shares of Common Stock of the Company, or
any options or warrants to purchase any shares of Common Stock of the Company,
or any securities convertible into, exchangeable for or that represent the right
to receive shares of Common Stock of the Company, whether now owned or
hereinafter acquired, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the SEC (collectively the "Undersigned's
Shares").
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The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
Notwithstanding the foregoing, the undersigned may (a) enter into a
"written plan for trading securities" within the meaning of Rule 10b5-1(c) under
the Securities Exchange Act of 1934 providing for the undersigned's sale of his,
her or its shares of Common Stock of the Company, provided, however, that no
sale or disposition of the undersigned's shares pursuant to such "written plan
for trading securities" may occur during the aforementioned 90-day period, (b)
exercise stock options and warrants and acquire shares with respect thereto,
provided that such shares are subject to the provisions of this Lock-Up
Agreement, and (c) transfer the Undersigned's Shares (i) as a bona fide gift or
gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, or (iii) with the prior written consent of Goldman,
Sachs & Co. on behalf of the Underwriters. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, (i) if the undersigned is a corporation, the corporation may transfer
the capital stock of the Company to any wholly-owned subsidiary of such
corporation or (ii) if the undersigned is a wholly-owned subsidiary corporation
of another corporation ("Parent"), the capital stock of the Company may be
transferred to any other corporation which is a wholly-owned subsidiary of
Parent; provided, however, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value. The undersigned now has, and, except
as contemplated by clause (b) or (c) above, for the duration of this Lock-Up
Agreement will have, good and marketable title to the Undersigned's Shares, free
and clear of all liens, encumbrances, and claims whatsoever other than as
described in the Prospectus (as defined in the Underwriting Agreement). The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
Undersigned's Shares except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offerings. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
[signature page attached]
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Very truly yours,
----------------------------------------
[Exact Name of Shareholder]
----------------------------------------
Authorized Signature
----------------------------------------
Title
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