DRAFT
$200,000,000
CALIFORNIA ENERGY COMPANY, INC.
% Limited Recourse Senior Secured Notes Due 2003
UNDERWRITING AGREEMENT
, 1995
CS First Boston Corporation,
Park Avenue Plaza,
New York, N.Y. 10055
Dear Sirs:
1. Introductory. California Energy Company, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell (the "Offering")
$200,000,000 principal amount of its % Limited Recourse Senior Secured Notes
Due 2003 (the "Securities"), to be issued under an indenture, dated as of July
__, 1995 ("Indenture"), by and between the Company and The Bank of New York, as
Trustee (the "Trustee"). The Company hereby agrees with CS First Boston
Corporation (the "Underwriter" or "CS First Boston") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement on Form S-3 (No. 33-59401) relating to the
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission (the "Commission") and either (i) has been declared
effective under the Securities Act of 1933 (the "Act") and is not proposed to be
amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If the Company does not propose to amend such registration statement
and if any post-effective amendment to such registration statement has been
filed with the Commission prior to the execution and delivery of this Agreement,
the most recent such amendment has been declared effective by the Commission.
For purposes of this Agreement, "Effective Time" means (i) if the Company has
advised the Underwriter that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or the
most recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by the
Commission, or (ii) if the Company has advised the Underwriter that it proposes
to file an amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared effective
by the Commission. "Effective Date" means the date of the Effective Time. Such
registration statement, as amended at the Effective Time, including all material
incorporated by reference therein and including all information (if any) deemed
to be a part of such registration statement as of the Effective Time pursuant to
Rule 430A(b) or Rule 434 under the Act, is hereinafter referred to as the
"Registration Statement", and the form of prospectus relating to the Securities,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as
included in the Registration Statement, including all material incorporated by
reference in such prospectus, is hereinafter referred to as the "Prospectus".
(b) If the Effective Time is prior to the execution and delivery of
this Agreement: (i) on the Effective Date, the Registration Statement conformed
in all material respects to the requirements of the Act, the Trust Indenture Act
of 1939 (the "Trust Indenture Act") and the rules and regulations (the "Rules
and Regulations") of the Commission and did not include any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) on the date
of this Agreement, the Registration Statement conforms, and at the time of
filing of the Prospectus pursuant to Rule 424(b), the Registration Statement and
the Prospectus will conform, in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated therein or
necessary to make the statements therein (with respect to the Prospectus, in the
light of the circumstances under which they were made) not misleading. If the
Effective Time is subsequent to the execution and delivery of this Agreement, on
the Effective Date, the Registration Statement and the Prospectus will conform
in all material respects to the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations, and neither of such documents will include any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in the light of the circumstances under which they
were made) not misleading. The two preceding sentences do not apply to
statements in or omissions from the Registration Statement or Prospectus based
upon written information furnished to the Company by the Underwriter
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or were last amended or
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as applicable, and the Rules and Regulations
and none of such documents 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 in light of the circumstances under
which they were made, and any further documents so filed and incorporated by
reference in the Registration Statement and the Prospectus, when such documents
become effective or are filed with the Commission, as the case may be, shall
conform in all material respects to the requirements of the Act and the Exchange
Act as applicable, and the Rules and Regulations and shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made.
(d) The Company, each Subsidiary (as defined below) and each Joint
Venture (as defined below) have been duly organized and are validly existing
and, if applicable, in good standing under the laws of their respective
jurisdictions of organization as a corporation or partnership, as the case may
be, and have the power and authority to own, lease and operate their property
and conduct their businesses as described in the Prospectus; the Company, the
Subsidiaries and the Joint Ventures are duly qualified to do business and are in
good standing as foreign corporations or foreign partnerships, as the case may
be, in each jurisdiction, domestic or foreign, in which such registration or
qualification or good standing is required (whether by reason of the ownership
or leasing of property, the conduct of business or otherwise), except where the
failure to so register or qualify or be in good standing is not reasonably
likely to have a material adverse effect on the financial condition, business or
results of operations of the Company, its Subsidiaries and Joint Ventures taken
as a whole, or Magma Power Company ("Magma"), Magma Subsidiaries and Magma Joint
Ventures taken as a whole; and the Company and Magma, as the case may be, have
all requisite corporate power and authority to enter into this Agreement, the
Indenture and the Secured Magma Note, and to consummate the transactions
contemplated hereby and thereby. For purposes of this Agreement, (A) the term
"Subsidiary" and "Magma Subsidiary" shall mean the entities listed with respect
to each in Schedule A hereto, and (B) the term "Joint Venture" and "Magma Joint
Venture" shall mean the entities listed with respect to each in Schedule B
hereto, it being understood that such terms mean the general or limited
partnership or other joint venture entity and not the individual general or
limited partners or other joint venturers thereof. The Subsidiaries listed in
Schedule A are all the respective material direct and indirect "subsidiaries" of
the Company and Magma, as such term is defined in Rule 405 of the Rules and
Regulations, and are all of the "Significant Subsidiaries" of the Company or
Magma, as such term is defined in Rule 1-02 of Regulation S-X.
(e) All the outstanding shares of capital stock of each Subsidiary and
each Magma Subsidiary have been duly and validly authorized and issued and are
fully-paid and nonassessable; and except as otherwise set forth in Schedule A
hereto or disclosed in or contemplated by the Prospectus, all outstanding shares
of capital stock of each Subsidiary are owned beneficially by the Company (and
in the case of Magma directly owned by the Company) and each Magma Subsidiary
are owned beneficially by Magma, in each case, free and clear of any material
claims, liens, encumbrances and security interests. All of the partnership
interests in Joint Ventures beneficially owned by the Company and Magma (as
reflected in Schedule B) have been duly and validly authorized and issued and,
except as otherwise set forth in Schedule B hereto or disclosed in or
contemplated by the Prospectus are owned beneficially by the Company or Magma,
as the case may be, free and clear of any material claims, liens, encumbrances
and security interests.
(f) Except as otherwise set forth in Schedule C hereto or disclosed in
or contemplated by the Prospectus, there are no outstanding securities
convertible into or exchangeable for, and no outstanding options, warrants or
other rights to purchase, any shares of the capital stock of Magma, nor any
agreements or commitments to issue any of the same.
(g) At the Closing Date (as defined below), the Trustee shall enjoy for
its benefit and the benefit of the holders of the Securities a valid and
perfected security interest in the Closing Date Pledged Shares (as defined in
the Indenture) to secure the Obligations (as defined in the Indenture) of the
Company and under the Uniform Commercial Code as in effect on the date of the
Indenture in the State of New York; no interest of any other creditor of the
Company will be equal or prior to the security interest of the Trustee in the
Closing Date Pledged Shares.
(h) The Indenture has been duly authorized and, if the Effective Time
is prior to the execution and delivery of this Agreement, has been or otherwise
upon the Effective Time will be duly qualified under the Trust Indenture Act;
the Securities have been duly authorized; and when the Securities are delivered
and paid for pursuant to this Agreement on the Closing Date, the Indenture will
have been duly executed and delivered, such Securities will have been duly
executed, authenticated, issued and delivered and will conform in all material
respects to the description thereof contained in the Prospectus and the
Indenture and such Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms
(including the limited recourse nature thereof), subject to bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(i) The secured note in the aggregate amount of $200,000,000 due July
__, 2003 issued by Magma to the Company on the Closing Date (the "Secured Magma
Note") has been duly authorized by all necessary action on the part of Magma,
and when executed by Magma upon delivery to Magma of the proceeds of the
Offering as consideration therefor, will be a valid and legally binding
obligation of Magma, enforceable in accordance with its terms, subject to
bankruptcy, insolvency (including, without limitation, all laws relating to
APITAL PRINTING SYSTEMS]
fraudulent transfers), reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(j) The use of the proceeds of the Offering as described in the
Prospectus has been duly authorized by all necessary action on the part of the
Company and Magma.
(k) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would give
rise to a valid claim against the Company or the Underwriter for a brokerage
commission, finder's fee or other like payment.
(l) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any debt securities
of the Company owned or to be owned by such person or to require the Company to
include any securities in the securities registered pursuant to the Registration
Statement or, with respect to any debt securities, in any securities being
registered pursuant to any other registration statement filed by the Company
under the Act.
(m) The Securities have been approved for listing on The New York Stock
Exchange (the "NYSE"), subject to notice of issuance.
(n) The execution, delivery and performance of this Agreement, the
Indenture and the Secured Magma Note, the consummation of the transactions
contemplated herein and therein and the issuance, sale of the Securities and the
use of the proceeds of the Offering as described in the Prospectus will not (A)
conflict with the corporate charter or by-laws or partnership agreement of the
Company, any Subsidiary or any Joint Venture, (B) conflict with, result in the
creation or imposition of any lien, charge or other encumbrance (other than the
liens securing the Securities or the Secured Magma Note) upon any asset of the
Company, any Subsidiary or Joint Venture pursuant to the terms of, or constitute
a breach of, or default under, any agreement, indenture or other instrument to
which the Company, any Subsidiary or any Joint Venture is a party or by which
the Company, any Subsidiary or any Joint Venture is bound or to which any of the
properties of the Company, any Subsidiary or any Joint Venture is subject, or
(C) result in a violation of any statute, any rule, regulation, order, judgment
or decree of any court or governmental agency, body or authority having
jurisdiction over the Company, any Subsidiary or any Joint Venture or any of
their properties where any such conflicts, encumbrances, breaches, defaults or
violations under clauses (B) or (C), individually or in the aggregate, is
reasonably likely to (i) have a material adverse effect on the financial
condition, business or results of operations of the Company, its Subsidiaries
and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma
Joint Ventures taken as a whole, (ii) impair the validity or enforceability of
this Agreement, the Indenture, the Securities or the Secured Magma Note or (iii)
materially impair the value of the Collateral (as defined in the Indenture).
(o) Except for (A) the registration of the Securities under the Act and
(B) such consents, approvals, authorizations, registrations or qualifications
which have been obtained under the Exchange Act, the Trust Indenture Act and
applicable state securities laws in connection with the purchase and
distribution of the Securities, no consent, approval, authorization or order of,
or filing or registration by the Company, any Subsidiary or, to the best of the
Company's knowledge, any Joint Venture with, any court, governmental agency or
third party is required in connection with the execution, delivery and
performance of this Agreement, the Indenture and the Secured Magma Note, the
consummation of the transactions contemplated herein and therein, the issuance
and sale of the Securities and the use of the proceeds of the Offering as
described in the Prospectus.
(p) This Agreement has been duly authorized, executed and delivered by
the Company.
(q) Except as disclosed in or contemplated by the Prospectus, the
Company, each Subsidiary and each Joint Venture holds, as applicable, good and
valid title to, or valid and enforceable leasehold or contractual interests in,
all real properties and all other properties and assets owned or leased by or
held under contract by each of them that are material to the business of the
Company and its Subsidiaries or Magma and Magma's Subsidiaries, in each case
taken as a whole, and in each case free from liens, encumbrances and defects
that would materially interfere with the use made or to be made thereof by them.
(r) Except as disclosed in or contemplated by the Prospectus, the
Company, the Subsidiaries and the Joint Ventures carry, or are covered by,
insurance in such amounts and covering such risks as is customary for similarly
situated companies in the Company's, such Subsidiaries' and such Joint Ventures'
industries, respectively. Each of the foregoing insurance policies is valid and
in full force and effect, and no event has occurred and is continuing that
permits, or after notice or lapse of time or both would permit, modifications or
terminations of the foregoing that, individually or in the aggregate, is
reasonably likely to have a material adverse effect on the financial condition,
business or results of operations of the Company, its Subsidiaries and Joint
Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures
taken as a whole.
(s) Except as disclosed in or contemplated by the Prospectus, the
Company, each Subsidiary and each Joint Venture (i) has obtained each license,
permit, certificate, franchise or other governmental authorization which is
material to the ownership of their properties or to the conduct of their
businesses as described in the Prospectus and (ii) is in compliance with all
terms and conditions of such license, permit, certificate, franchise or other
governmental authorization, except (A) in either case where the failure to do so
is not reasonably likely to have, individually or in the aggregate, a material
adverse effect on the financial condition, business or results of operations of
the Company, the Subsidiaries and Joint Ventures taken as a whole, or Magma,
Magma Subsidiaries and Magma Joint Ventures taken as a whole, (B) permits,
consents and approvals that may be required for future drilling or operating
activities which are ordinarily deemed to be ministerial in nature and which are
anticipated to be obtained in the ordinary course and (C) permits, consents and
approvals for developmental or construction activities which have not yet been
obtained but which have been or will be applied for in the course of development
or construction and which are anticipated to be obtained in the ordinary course.
(t) There is no legal or governmental action, suit or proceeding before
any court, governmental agency, body or authority, domestic or foreign, now
pending or, to the knowledge of the Company, threatened against, or, to the
knowledge of the Company, involving, the Company, any Subsidiary or any Joint
Venture (i) of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Registration Statement or
(ii) that, if determined adversely to the Company, any Subsidiary or any Joint
Venture, would be reasonably likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, business or results of
operations of the Company, the Subsidiaries and Joint Ventures taken as a whole,
or Magma, Magma Subsidiaries and Magma Joint Ventures taken as a whole, or on
the ability of the Company to perform its obligations under this Agreement, the
Indenture or the Securities or of Magma to perform its obligations under the
Secured Magma Note.
(u) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(v) The Company, the Subsidiaries and the Joint Ventures are currently
conducting their respective businesses as described in the Prospectus.
(w) There are no contracts or other documents that are required to be
described in the Prospectuses or filed as exhibits to the Registration Statement
by the Act or by the Rules and Regulations that have not been described in the
Prospectus or filed as exhibits to the Registration Statement or incorporated
therein by reference as permitted by the Rules and Regulations.
(x) There is no relationship, direct or indirect, that exists between
or among the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, that is required by the
Act or by the Rules and Regulations to be described in the Prospectus and which
is not so described.
(y) There is no labor problem or disturbance with the persons employed
by the Company, any Subsidiary or any Joint Venture that exists or, to the
knowledge of the Company, that is threatened and that might reasonably be
expected to have a material adverse effect on the financial condition, business
or results of operations of the Company, the Subsidiaries and Joint Ventures
taken as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures taken as
a whole.
(z) Neither the Company nor any person who is a member of a group which
is under common control with the Company and the Subsidiaries and Joint
Ventures, who together with the Company, the Subsidiaries and the Joint Ventures
is treated as a single employer ("ERISA Affiliate") within the meaning of
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code") or Section 4001(b) of the Employee Retirement
Income Security Act of 1974, as amended from time to time ("ERISA") has
established, sponsored, maintained or had any obligation to contribute to any
employee benefit plans within the meaning of Section 3(3) of ERISA which are
subject to Title IV of ERISA or Section 412 of the Code. Except where it could
not reasonably be expected to result in a material adverse effect on the
financial condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole, (i) all employee benefit plans within
the meaning of Section 3(3) of ERISA established, sponsored or maintained for or
on behalf of the employees, officers or directors of the Company, the
Subsidiaries, Joint Ventures, Magma, Magma Subsidiaries, Magma Joint Ventures or
any ERISA Affiliate ("Employee Benefit Plans") are in compliance with all
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder and each such Employee Benefit Plan that is intended
to be qualified under Code Section 401(a) has been determined by the Internal
Revenue Service to be so qualified and (ii) no liability or obligation has been
incurred or is reasonably expected to be incurred by the Company, the
Subsidiaries or Joint Ventures or Magma, Magma Subsidiaries or Magma Joint
Ventures or any ERISA Affiliate with respect to any Employee Benefit Plan.
(aa) None of the Company, any Subsidiary or any Joint Venture (i) is in
violation of its respective charter, by-laws or partnership agreements, (ii) is
in default, and no event exists and is continuing that, with notice or lapse of
time or both, would constitute such a default, in the due performance and
observance of any material term contained in any lease, license, indenture,
mortgage, deed of trust, note, bank loan or other evidence of indebtedness or
any other agreement, understanding or instrument to which the Company, any
Subsidiary or any Joint Venture is a party or by which the Company, any
Subsidiary or any Joint Venture or any property of the Company, any Subsidiary
or any Joint Venture may be bound or affected, which default, individually or in
the aggregate, is reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole, or (iii) is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it may be
subject, which violation, individually or in the aggregate, is reasonably likely
to have a material adverse effect on the financial condition, business or
results of operations of the Company, the Subsidiaries and Joint Ventures taken
as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures taken as a
TAL PRINTING SYSTEMS]
whole or would materially interfere in any way with the execution, delivery and
performance of this Agreement, the Indenture and the Secured Magma Note, the
consummation of the transactions contemplated herein and therein, the issuance
and sale of the Securities and the use of the proceeds of the Offering as
described in the Prospectus.
(ab) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances, pollutants or contaminants by the Company, any
Subsidiary or any Joint Venture (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company, any Subsidiary or any Joint Venture
in violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit,
except for any violation or remedial action which does not have, or would not be
reasonably likely to have, individually or in the aggregate with all such
violations and remedial actions, a material adverse effect on the financial
condition, business or results of operations of the Company, the Subsidiaries
and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma
Joint Ventures taken as a whole; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic wastes,
solid wastes, hazardous wastes or hazardous substances, pollutants or
contaminants due to or caused by the Company, any Subsidiary or any Joint
Venture or with respect to which the Company, any Subsidiary or any Joint
Venture has knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which does not have, or would not be
reasonably likely to have, individually or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the financial condition, business or
results of operations of the Company, the Subsidiaries and Joint Ventures taken
as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures taken as a
whole; and the terms "hazardous wastes", "toxic wastes" and "hazardous
substances" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(ac) Neither the Company nor any Subsidiary or Joint Venture is, and,
after giving effect to the issuance of the Securities and the application of the
proceeds therefrom, shall be, an "investment company," or, to the best knowledge
of the Company after due inquiry, a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act").
(ad) The Company, each Subsidiary and each Joint Venture has filed all
federal, state and local income and franchise tax returns required to be filed
through the date hereof, or has filed extensions in accordance with applicable
law, and has paid all taxes required to be paid through the date hereof thereon,
except for such failures to file or pay that would not, individually or in the
aggregate, be reasonably likely to have a material adverse effect on the
financial condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole, and no tax deficiency has been
determined adversely to the Company, any Subsidiary or any Joint Venture that
has had (nor does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company, any Subsidiary or any Joint Venture would
be reasonably likely to have) a material adverse effect on the financial
condition, business or results of operations of the Company, the Subsidiaries
and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma
Joint Ventures taken as a whole.
(ae) The financial statements of the Company and its consolidated
subsidiaries and Magma and its consolidated subsidiaries and the related notes
and schedules included or incorporated by reference in the Registration
Statement and the Prospectus fairly present the financial position, the results
of operations and the cash flows of the Company and its consolidated
subsidiaries and Magma and its consolidated subsidiaries, as the case may be, at
the respective dates and for the respective periods to which they apply; such
financial statements and the related notes and schedules have been prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis throughout the periods therein specified. The information
under the caption "Capitalization" in the Prospectus, is accurately described as
of the date presented therein.
(af) Since the date of the latest audited financial statements included
in the Prospectus (i) there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the
financial condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole, and (ii) except as disclosed in the
Prospectus, there have not been any transactions entered into by the Company,
the Subsidiaries or any Joint Venture, other than those in the ordinary course
of business, which are material to the Company, the Subsidiaries and Joint
Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures
taken as a whole; except as disclosed in the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company or
Magma on any class of its respective capital stock.
(ag) The pro forma financial statements and other pro forma financial
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
ns or
RINTING SYSTEMS]
circumstances referred to therein.
(ah) The Company has complied with all applicable provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(ai) Deloitte & Touche LLP ("Deloitte & Touche"), who have certified
certain financial statements of the Company, and Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), who have certified certain financial statements of Magma,
whose reports appear in the Prospectus or are incorporated by reference therein,
each are and were independent public accountants as required by the Act and the
Rules and Regulations during the periods covered by the financial statements on
which they reported contained or incorporated in the Prospectus.
(aj) (i) Each of the operational electric generation facilities
("Plants") owned in whole or in part, directly or indirectly by (A) the Company,
(B) the Subsidiaries or (C) the Joint Ventures is located in the United States,
and is a "qualifying cogeneration facility" or a "qualifying small power
production facility" (either or both of which are hereinafter referred to as a
"QF"), as such terms are defined under the Federal Power Act, as amended
("FPA"), and the regulations thereunder, and has continuously been in compliance
with the requirements for being a QF since it commenced sales of electricity;
(ii) with respect to each Plant under development and located in the United
States, either (x) to the extent that the Company, the Subsidiaries or the Joint
Ventures plan to act as the owner and/or operator of any one of the Plants
under development by the Company, the Subsidiaries or the Joint Ventures and
located in the United States (as currently configured or as currently
anticipated to be configured) that owner and/or operator satisfies or is
currently expected to satisfy current regulatory requirements for being an
"exempt wholesale generator" ("EWG"), as such term is defined under the FPA, the
Public Utility Holding Company Act of 1935, as amended ("PUHCA") and the
regulations thereunder or (y) each of the Plants under development by the
Company, the Subsidiaries or the Joint Ventures and located in the United States
(as currently configured or as currently anticipated to be configured) will be a
QF and will be in continuous compliance with the requirements for being a QF;
(iii) the owner or operator of each of the Plants under development by the
Company, the Subsidiaries or Joint Ventures and located outside the United
States (as currently configured or as currently anticipated to be configured)
satisfies or is currently expected to satisfy current regulatory requirements
for being either (A) an EWG or (B) a "foreign utility company," as such term is
defined under PUHCA and the regulations thereunder; (iv) none of the entities
identified in clause (A) or (B) of subparagraph (i) above owns or operates or
will own or operate any electric distribution facilities or any electric
transmission facilities in or outside of the United States other than electric
transmission facilities that have been or will be approved by the Federal Energy
Regulatory Commission as being part of a QF; or the owner and/or operator of
which have qualified as EWG's or as "foreign utility companies" as such terms
are defined under the FPA, PUHCA and the regulations thereunder; and (v) none of
the entities identified in clause (A), (B) or (C) of subparagraph (i) above is,
or is subject to regulation as, a "public utility holding company" or a
"subsidiary company" of a "public utility holding company," as those terms are
defined under PUHCA, or is subject to regulation under the FPA, other than as
contemplated by 18 C.F.R Section 292.601(c), or, except as described in the
Registration Statement, subject to regulation by any state law with respect to
rates or the financial or organizational regulation of electric utilities.
(ak) No event has occurred and is continuing that, had the Securities
already been issued, would (whether or not with the giving of notice and/or the
passage of time and/or the fulfillment of any other requirement) constitute an
Event of Default (as defined in the Indenture) under the Indenture.
(al) The Company has not offered, sold or issued any Securities or
similar debt securities during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A or Regulations D or S
under the Act.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of % of the principal amount thereof plus accrued interest
from , 1995 to the Closing Date, $200,000,000 aggregate
principal amount of the Securities.
The Company will deliver against payment of the purchase price the
Securities in the form of one or more permanent global Securities in definitive
form (the "Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Prospectus. Payment for the Securities shall be made by the Underwriter by
certified or official bank check or checks in New York Clearing House (next day)
funds drawn to the order of the Company at the offices of Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, New York, at 10:00 A.M., (New York
time), on , 1995, or at such other time not later than seven full
business days thereafter as CS First Boston and the Company determine, such
time" being herein referred to as the "Closing Date," against delivery to the
Trustee as custodian for DTC of the Global Securities representing all of the
Securities. The Global Securities will be made available for checking at the
offices of Skadden, Arps, Slate, Meagher & Flom at least 24 hours prior to the
Closing Date.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Securities for sale to the public as, and upon the terms
and conditions, set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
NG SYSTEMS]
Underwriter that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable and if
consented to by CS First Boston, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and delivery
of this Agreement or (B) the fifteenth day after the Effective Date. The
Company will advise CS First Boston promptly of any such filing pursuant to Rule
424(b).
(b) The Company will advise CS First Boston promptly of any proposal to
amend or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without CS First Boston's consent; and the
Company will also advise CS First Boston promptly of the effectiveness of the
Registration Statement (if the Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of the
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement and will use its reasonable best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act in connection with sales by the
Underwriter or any dealer, any event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CS First Boston of such event and
will promptly prepare and file with the Commission, at its own expense (subject
to the MOU (as defined below)), an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance.
Neither CS First Boston's consent to, nor its delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement (which need not be audited) covering a
period of at least 12 months beginning after the Effective Date which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes the Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Company will furnish to the Underwriter copies of the
Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as delivery of a
prospectus relating to the Securities is required to be delivered under the Act
in connection with sales by the Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CS First Boston requests and as soon as available, but, in the case of the
Prospectus, not later than (i) if the Effective Time is prior to the execution
and delivery of this Agreement, 5:00 p.m. on the first business day following
the date of execution and delivery of this Agreement or (ii) if the Effective
Time is after the execution and delivery of this Agreement, 5:00 p.m. on the
first business day following the date of the Effective Time. The Company will
pay the expenses of printing and distributing to the Underwriter all such
documents.
(f) The Company will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment under the
laws of such jurisdictions as CS First Boston designates and will continue such
qualifications in effect so long as required for the distribution, provided
that, in connection therewith the Company shall not, with respect to any such
jurisdiction, be required to qualify as a foreign corporation, to file a general
consent to service of process or to take any other action that would subject it
to service of process in suits other than those arising out of the offering of
the Securities or to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
(g) During the period of three years hereafter, the Company will
furnish to the Underwriter, as soon as practicable, after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and the Company
will furnish to the Underwriter as soon as available, a copy of each report and
any definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders.
(h) Subject to the Memorandum of Understanding, dated June 16, 1995, by
and among the Underwriter, the Company and Credit Suisse (the "MOU"), the
Company will pay all expenses incident to the performance of its obligations
under this Agreement and will reimburse the Underwriter (if and to the extent
incurred by it) for any filing fees and other expenses (including reasonable
fees and disbursements of counsel up to $7,500) incurred by them in connection
with qualification of the Securities for sale under the laws of such
jurisdictions as CS First Boston designates and the printing of memoranda
relating thereto, for any fees charged by investment rating agencies for the
rating of the Securities, for the filing fee of the National Association of
Securities Dealers, Inc. relating to the Securities, the NYSE listing fee, for
any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Securities and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriter.
(i) The Company shall apply the net proceeds from the sale of the
Securities as described in the Prospectus.
(j) The Company shall use its reasonable best efforts to have the
Securities listed on the NYSE concurrently with the Effective Time.
(k) If after the execution and delivery of this Agreement, additional
Securities are required to be registered with the Commission under the Act in
order to comply with the provisions of this Agreement, the Company shall comply
with the provisions of Rule 462 under the Act, including the requirement to pay
the additional registration fee to the Commission as soon as possible, but in no
event later than 10:00 a.m. on the first business day following the date of
execution and delivery of this Agreement.
6. Conditions of the Obligations of the Underwriter. The obligations
of the Underwriter to purchase and pay for the Securities on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Underwriter shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to the
Effective Time), of each of Deloitte & Touche (with respect to the Company) and
Coopers & Lybrand (with respect to Magma) confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules of
such company examined by them and included or incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act, as
applicable, and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No. 71,
Interim Financial Information, on the unaudited financial statements included in
the Registration Statement and the Prospectus;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements of such
company, inquiries of officials of such company who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) any unaudited financial statements included in the Registration
Statement and the Prospectus do not comply in form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act, as
applicable, and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements for them to
be in conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus;
(B) the unaudited consolidated total revenues, income from operations
and net income for the three months ended March 31, 1995 included in the
Prospectus do not agree with the amounts set forth in the unaudited consolidated
financial statements for those same periods or were not determined on a basis
substantially consistent with that of the corresponding amounts in the audited
statements of income;
(C) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than five days prior to
the date of this Agreement, there was any change in the capital stock or that
any increase in short-term indebtedness or long-term indebtedness (excluding
project finance indebtedness for projects currently in construction and the
effects of the scheduled accretion of the Company's 10-1/4% Senior Discount
Notes) of such company and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there was any decrease
in consolidated total assets, as compared with amounts shown on the latest
balance sheet included in the Registration Statement and the Prospectus (except
for the exercise of existing stock options and the purchase of the Company's
treasury stock); or
(D) for the period from the closing date of the latest income statement
included in the Registration Statement and the Prospectus to the closing date of
the latest available income statement read by such accountants there were any
decreases (excluding the effects of the scheduled accretion of the Company's 10-
1/4% Senior Discount Notes), as compared with the corresponding period of the
previous year, in consolidated operating revenues, net income and the ratio of
earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses has occurred or
may occur;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial information
contained in the Registration Statement and the Prospectus (in each case to the
extent that such dollar amounts, percentages and other financial information are
derived from the general accounting records of such company, its subsidiaries
and joint ventures subject to the internal controls of such entity's accounting
system or are derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter;
(v) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of such
company, its subsidiaries and joint ventures or are derived directly from such
records by analysis or computation) set forth in the Registration Statement and
the Prospectus, agrees with the accounting records of such company, its
subsidiaries and joint ventures, excluding any questions of legal
interpretation; and
(vi) on the basis of a reading of the unaudited pro forma
financial statements included in the Registration Statement and the Prospectus
(the "pro forma financial statements"); carrying out certain specified
procedures; inquiries of certain officials of the Company and Magma who have
responsibility for financial and accounting matters; and proving the arithmetic
accuracy of the application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to their attention
which causes them to believe that the pro forma financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
such statements.
For purposes of this subsection, if the Effective Time is subsequent to
the execution and delivery of this Agreement, "Registration Statement" shall
mean the registration statement as proposed to be amended by the amendment or
post-effective amendment to be filed shortly prior to the Effective Time, and
"Prospectus" shall mean the prospectus included in the Registration Statement,
in each case including all information (if any) deemed to be a part of such
Registration Statement and Prospectus as of the Effective Time pursuant to Rule
430A(b) or Rule 434 under the Act. All financial statements and schedules
included in material incorporated by reference into the Registration Statement
and the Prospectus shall be deemed included in the Registration Statement and
the Prospectus for purposes of this subsection.
(b) If the Effective Time is not prior to the execution and delivery of
this Agreement, the Effective Time shall have occurred not later than 8:00 P.M.,
New York time, on the date of this Agreement or such later date as shall have
been consented to by CS First Boston. If the Effective Time is prior to the
execution and delivery of this Agreement, the Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and Section
5(a) of this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Company or the Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the financial condition, business or results of
operations of the Company, the Subsidiaries and Joint Ventures, taken as a
whole, or Magma, Magma Subsidiaries and Magma Joint Ventures taken as a whole,
which, in the judgment of the Underwriter, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the over-the-
counter market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by the United States Congress
or any other substantial national calamity or emergency if, in the judgment of
the Underwriter, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impracticable or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Securities.
(d) The Underwriter shall have received an opinion, dated the Closing
Date, of Steven A. McArthur, General Counsel to the Company, to the effect that:
(i) Each of the Company, the Subsidiaries and Joint Ventures
has been duly organized and is validly existing and, if applicable, in good
standing under the laws of its respective jurisdiction of organization and each
of the Company, the Subsidiaries and Joint Ventures has the power and authority
to own, lease and operate its respective properties and to conduct its
businesses as described in the Prospectus;
(ii) Each of the Company, the Subsidiaries and Joint Ventures
is duly registered or qualified to do business and (to the extent applicable) is
in good standing as a foreign corporation or a foreign partnership, as the case
may be, in each jurisdiction, domestic or foreign, in which such registration,
qualification or good standing is required (whether by reason of the ownership
or leasing of property, the conduct of its business or otherwise), except where
the failure to so register or qualify or be in good standing is not reasonably
likely to have a material adverse effect on the financial condition, business or
results of operation of the Company, the Subsidiaries and Joint Ventures taken
as a whole, or Magma, Magma Subsidiaries and Magma Joint Ventures taken as a
whole;
(iii) The Company and Magma each have the authorized and
outstanding capitalization as set forth in the respective column labeled "The
Company" and "Magma" under the caption "Capitalization" in the Prospectus; to
the best knowledge of such counsel, all the outstanding shares of capital stock
of each Subsidiary and each Magma Subsidiary have been duly and validly
authorized and issued and are fully- paid and nonassessable; and to the best
knowledge of such counsel, except as otherwise set forth in Schedule A attached
to this Agreement or disclosed in or contemplated by the Prospectus, all
outstanding shares of capital stock of each Subsidiary are owned beneficially by
the Company (and in the case of Magma directly owned by the Company) and each
Magma Subsidiary are owned beneficially by Magma free and clear of any material
claims, liens, encumbrances and security interests; and to the best knowledge of
such counsel, all of the partnership interests in Joint Ventures beneficially
owned by the Company and Magma (as reflected in Schedule B) have been duly and
validly authorized and issued and, except as otherwise set forth in Schedule B
attached to this Agreement or disclosed in or contemplated by the Prospectus,
are owned beneficially by the Company or Magma, as the case may be, free and
clear of any material claims, liens, encumbrances and security interests;
(iv) Except as otherwise set forth in Schedule C attached to
this Agreement or disclosed in or contemplated by the Prospectus, there are no
outstanding securities convertible into or exchangeable for, and no outstanding
options, warrants or other rights to purchase, any shares of the capital stock
of Magma, nor any agreements or commitments to issue any of the same;
(v) Upon (A) authentication and execution of the Securities in
accordance with the terms of the Indenture, (B) delivery of the Securities
against payment therefor in accordance with the terms of this Agreement and (C)
delivery to the Trustee in the State of New York of the certificates
representing the Closing Date Pledged Shares accompanied by stock powers
endorsed in blank, the Trustee will have a valid and perfected security interest
in the Closing Date Pledged Shares under the Uniform Commercial Code as in
effect on the date of the Indenture in the State of New York to secure the
Obligations of the Company; no interest of any other creditor of the Company
will be equal or prior to the security interest of the Trustee in the Closing
Date Pledged Shares;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms (including the limited
recourse nature thereof), subject to bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(viii) The Securities have been duly authorized and executed by
the Company, and, assuming due authentication by the Trustee, when issued and
delivered as contemplated by the Indenture upon payment therefor as provided in
this Agreement, will be validly issued and outstanding and will constitute valid
and binding obligations of the Company entitled to the benefits of the Indenture
and enforceable in accordance with their terms (including the limited recourse
nature thereof), subject to bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(ix) The Secured Magma Note has been duly authorized by all
necessary action on the part of Magma, and when executed by Magma upon delivery
to Magma of the proceeds of the Offering as consideration therefor, will be a
valid and legally binding obligation of Magma, enforceable in accordance with
its terms, subject to bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles;
(x) To such counsel's knowledge, except as otherwise disclosed
in the Prospectus or contemplated by the MOU, there are no contracts, agreements
or understandings between the Company and any person that would give rise to a
valid claim against the Company or the Underwriter for a brokerage commission,
finder's fee or other like payment;
(xi) Except as disclosed in or contemplated by the Prospectus,
each of the Company, the Subsidiaries and Joint Ventures has good and valid
title to, or valid and enforceable leasehold or contractual interests in, all
real properties and all other properties and assets owned or leased or held
under contract by each of them that are material to the business of the Company
and its Subsidiaries or Magma and Magma's Subsidiaries, in each case take as a
whole, and, in each case free from all liens, encumbrances, and defects that
would materially interfere with the use made or to be made thereof by them;
(xii) To such counsel's knowledge, there is no legal or
governmental action, suit or proceeding before any court, governmental agency,
body or authority, domestic or foreign, now pending, threatened against, or
involving, the Company, any Subsidiary or any Joint Venture (A) of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Registration Statement or (B) that, if determined adversely to
the Company, any Subsidiary or any Joint Venture, is reasonably likely to have,
individually or in the aggregate, a material adverse effect on the financial
condition, business or results of operations of the Company, the Subsidiaries
and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries and Magma
Joint Ventures taken as a whole, or on the ability of the Company to perform its
obligations under this Agreement, the Indenture or the Securities or of Magma to
perform its obligations under the Secured Magma Note;
(xiii) To such counsel's knowledge, the Company, each
Subsidiary and each Joint Venture (A) has properly obtained each license,
permit, certificate, franchise or other governmental authorization which is
material to the ownership of their properties or to the conduct of their
businesses as described in the Prospectus and (B) is in compliance with all
terms and conditions of such license, permit, certificate, franchise or other
governmental authorization, except (x) in either case where the failure to do so
is not reasonably likely to have, individually or in the aggregate, a material
adverse effect on the financial condition, business or results of operations of
the Company, the Subsidiaries and Joint Ventures taken as a whole, or Magma,
Magma Subsidiaries and Magma Joint Ventures taken as a whole, (y) permits,
consents and approvals that may be required for future drilling or operating
activities which are ordinarily deemed to be ministerial in nature and which are
anticipated to be obtained in the ordinary course and (z) permits, consents and
approvals for developmental or construction activities which have not yet been
obtained but which have been or will be applied for in the course of development
or construction and which are anticipated to be obtained in the ordinary course;
(xiv) The Company and Magma, as the case may be, have all
requisite corporate power and authority to execute, deliver and perform this
Agreement, the Indenture and the Secured Magma Note, consummate the transactions
contemplated herein and therein, issue and sell the Securities and use the
proceeds of the Offering as described in the Prospectus;
(xv) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have not
been described or filed as exhibits to the Registration Statement or
incorporated by reference therein as permitted by the Rules and Regulations;
(xvi) (A) The execution, delivery and performance of this
Agreement, the Indenture and the Secured Magma Note, the consummation of the
transactions contemplated herein and therein, the issuance and sale of the
Securities and the use of the proceeds of the Offering as described in the
Prospectus do not and will not (x) conflict with the corporate charter or by-
laws or partnership agreement of the Company, any Subsidiary or any Joint
Venture, (y) to the best knowledge of such counsel, conflict with, result in the
creation or imposition of any lien, charge or other encumbrance (other than the
liens securing the Securities or the Secured Magma Note) upon any asset of the
Company, any Subsidiary or any Joint Venture pursuant to the terms of, or
constitute a breach of, or default under, any agreement, indenture or other
instrument to which the Company, any Subsidiary or any Joint Venture is a party
or by which the Company, any Subsidiary or any Joint Venture is bound or to
which any of the properties of the Company, any Subsidiary or any Joint Venture
is subject, or (z) to the best knowledge of such counsel, result in a violation
of any statute, any rule, regulation, order, judgment or decree of any court or
governmental agency, body or authority having jurisdiction over the Company, any
Subsidiary or any Joint Venture or any of their properties where any such
conflicts, encumbrances, breaches, defaults or violations under clauses (y) or
(z), individually or in the aggregate, is reasonably likely to have a material
adverse effect on the financial condition, business or results of operations of
the Company, the Subsidiaries and Joint Ventures taken as a whole, or Magma,
Magma Subsidiaries and Magma Joint Ventures taken as a whole, (B) to the
knowledge of such counsel, except for (x) the registration of the Securities
under the Act, and (y) such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act, the Trust Indenture
Act and applicable state securities laws in connection with the purchase and
distribution of the Securities, no consent, authorization or order of, or filing
or registration by the Company, any Subsidiary or any Joint Venture with, any
court, governmental agency or third party is required in connection with the
execution, delivery and performance of this Agreement, the Indenture and the
Secured Magma Note, the consummation of the transactions contemplated herein and
therein, the issuance and sale of the Securities and the use of the proceeds of
the Offering as described in the Prospectus, the failure to obtain which,
individually or in the aggregate, is reasonably likely to have a material
adverse effect on the financial condition, business or results of operations of
the Company, the Subsidiaries and Joint Ventures taken as a whole, or Magma,
Magma Subsidiaries and Magma Joint Ventures taken as a whole, or on the
Securities or the ability of the Company to perform its obligations under this
Agreement and the Indenture;
(xvii) The Company is not, and after giving effect to the
issuance of the Securities and the application of the proceeds therefrom shall
not be, an "investment company," or, to such counsel's knowledge, a company
"controlled" by an "investment company," within the meaning of the 1940 Act; and
(xviii) The documents incorporated by reference in the
Prospectus and any further amendments or supplements to any such incorporated
document made by the Company prior to the Closing Date (other than the financial
statements, related schedules and other financial and statistical information
contained therein or omitted therefrom as to which such counsel need express no
opinion), when they became effective or were filed with the Commission, as the
case may be, appear on their face to have been appropriately responsive in all
material respects to the applicable requirements of the Act or the Exchange Act,
as the case may be, and the Rules and Regulations of the Commission thereunder.
(e) The Company shall have furnished to the Underwriter the opinion of
Willkie Farr & Gallagher, special counsel to the Company, addressed to the
Underwriter and dated the Closing Date, in form and substance satisfactory to
the Underwriter, to the effect that:
(i) The Company and Magma each have been duly organized and are
validly existing and in good standing under the laws of their jurisdiction of
organization and each of the Company and Magma has the corporate power and
authority to own, lease and operate its properties and to conduct its businesses
as described in the Prospectus;
(ii) Such counsel has been advised by the Commission that the
Registration Statement has been declared effective under the Act and the
Indenture has been duly qualified under the Trust Indenture Act; the Prospectus
have been filed with the Commission pursuant to the appropriate subparagraph of
Rule 424(b) of the Rules and Regulations; to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose is pending or threatened by the
Commission;
(iii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to the
Closing Date (other than the financial statements, related schedules, other
financial and statistical information contained therein or omitted therefrom as
to which such counsel need express no opinion) as of their effective dates,
appear on their face to have been appropriately responsive in all material
respects to the applicable requirements of the Act, the Trust Indenture Act, the
Exchange Act and the Rules and Regulations;
(iv) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been described or filed as exhibits to the
Registration Statement or incorporated by reference therein as permitted by the
Rules and Regulations; and the Indenture conforms in all material respects to
the requirements of the Trust Indenture Act and the applicable rules and
regulations thereunder;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(vii) The Securities have been duly authorized and executed by
the Company, and, assuming due authentication by the Trustee, when issued and
delivered as contemplated by the Indenture upon payment therefor as provided in
this Agreement, will be validly issued and outstanding and constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, subject to bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(viii) The Secured Magma Note has been duly authorized by all
necessary action on the part of Magma, and when executed by Magma upon delivery
to Magma of the proceeds of the Offering as consideration therefor, will be a
valid and legally binding obligation of Magma, enforceable in accordance with
its terms, subject to bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles;
(ix) The statements in the Prospectus under the caption
"Description of the Notes" insofar as they purport to summarize the provisions
of the Indenture and the Securities have been reviewed by such counsel and
fairly summarize the information or matters described therein; and
(x) No consent, authorization, order of, or filing or
registration by the Company with, any United States governmental authority or
body having jurisdiction over the Company is necessary or required for the
performance by the Company of its obligations under this Agreement or the
Indenture, or in connection with the issuance and sale of the Securities
hereunder or thereunder, except as may be required under applicable state or
foreign securities laws or blue sky laws in connection with the purchase and
distribution of the Securities.
(f) In the rendering of the opinions described in Section 6(d) and
Section 6(e) above, such counsel may (i) state that their opinion is limited to
matters governed by the Federal laws of the United States of America, the laws
of the State of New York, the General Corporation Law of the State of Delaware
and, in the case of the General Counsel of the Company, the laws of the States
of California and Nevada, and (ii) rely, to the extent they deem proper, in
respect of matters of fact, upon certificates and representations of officers of
the Company, the Subsidiaries or Joint Ventures or of Magma, Magma Subsidiaries
and Magma Joint Ventures and public officials and, in respect of matters of
Nevada law, upon the opinion of Nevada counsel who is reasonably satisfactory to
the Underwriter. Such counsel shall also have furnished to the Underwriter a
written statement, addressed to the Underwriter and dated such Closing Date, in
form and substance reasonably satisfactory to the Underwriter, to the effect
that (i) such counsel (in the case of Willkie Farr & Gallagher, such counsel may
state that they have acted as special counsel to the Company for purposes of the
subject Offering) have participated in conferences with representatives of the
Company, some of which have been attended by the Underwriter and its counsel, at
which conferences the contents of the Registration Statement, the Prospectus,
each amendment thereof and supplement thereto and related matters were
discussed, although such counsel has not independently checked or verified and
is not passing upon and assumes no responsibility for the factual accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Prospectus, any amendment thereof or supplement thereto, and (ii)
based on the foregoing, no facts have come to the attention of such counsel
which cause them to believe that (except for the financial statements, related
schedules and other financial and statistical information contained therein or
omitted therefrom as to all of which such counsel need not express any belief)
(A) the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus, as amended and supplemented as of the
Effective Time and as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (B), in the case of the General Counsel of the Company, any
document incorporated by reference in the Prospectus or any further amendment or
supplement to such incorporated document made by the Company prior to the
Closing Date when they became effective or were filed with the Commission, as
the case may be, contained, in the case of a registration statement that became
effective under the Act, any untrue statement of a material fact or omitted to
state a material fact required to be stated therein, in the light of the
circumstances under which they were made, or necessary in order to make the
statements therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(g) The Underwriter shall have received from Skadden, Arps, Slate,
Meagher & Flom, counsel for the Underwriter, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company, the
validity of the Securities delivered on the Closing Date, the Registration
Statement, the Prospectus and other related matters as the Underwriter may
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(h) The Underwriter shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct in all material respects, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission and
that, subsequent to the date of the most recent financial statements included or
incorporated by reference in the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material adverse
change, in the financial condition, business or results of operations of the
Company, the Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma
Subsidiaries and Magma Joint Ventures taken as a whole, except as set forth in
or contemplated by the Prospectus or as described in such certificate.
(i) The Underwriter shall have received letters, dated such Closing
Date, of Deloitte & Touche and Coopers & Lybrand which meet the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
(j) The Securities shall have been approved for listing on the NYSE,
subject only to notice of issuance thereof.
(k) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus (i) except as disclosed in the
Prospectus, there shall have been no material adverse change, or a development
which is reasonably likely to lead to a material adverse change, in the
financial condition, business or results of operations of the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole and (ii) except as disclosed in the
Prospectus, there shall not have been any transactions entered into by the
Company, any Subsidiary or any Joint Venture, other than those in the ordinary
course of business, which are material and adverse to the Company, the
Subsidiaries and Joint Ventures taken as a whole, or Magma, Magma Subsidiaries
and Magma Joint Ventures taken as a whole, and which, in the judgment of the
Underwriter, make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus.
(l) The Company shall have furnished the Underwriter with such
conformed copies of such opinions, certificates, letters and documents as the
Underwriter reasonably requested.
(m) The Underwriter shall have received copies of the executed
Indenture and the other security and ancillary documents, including a copy of
the executed Secured Magma Note, given or received by the Company in connection
with the issuance and sale of the Securities.
(n) The Company shall have delivered to the Trustee certificates
representing the Closing Date Pledged Shares, in accordance with the terms of
the Indenture, and shall have executed and delivered, filed and recorded all
instruments and documents, and have done all such acts and other things as are
necessary to subject the Collateral (as defined in the Indenture) to the
security interest intended to be created by Article Thirteen of the Indenture.
(o) The Company shall have furnished the Underwriter and its counsel
with copies of any consents, waivers, amendments, releases and security and
other ancillary documents obtained in connection with the authorization,
execution, delivery and performance of this Agreement, the Indenture, the
Securities and the Secured Magma Note and the transactions contemplated by each
of the foregoing, including, without limitation, evidence of the repayment in
full of the Merger Facilities (as defined in the Prospectus) and the discharge
of the lien of Credit Suisse on the Closing Date Pledged Shares and on the other
collateral securing the Merger Facilities.
(p) The Company shall have complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
under the Indenture at or prior to the Closing Date.
(q) The Company shall have furnished the Prospectus to the Underwriter
in such quantities as the Underwriter shall have requested no later than (i) if
the Effective Time is prior to the execution and delivery of this Agreement,
5:00 p.m. on the first business day following the date of execution and delivery
of this Agreement or (ii) if the Effective Time is after the execution and
delivery of this Agreement, 5:00 p.m. on the first business day following the
date of the Effective Time.
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless the Underwriter against any losses, claims, damages or
liabilities, to which the 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 any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, 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 (with respect to the Prospectus, in
light of the circumstances under which they were made) not misleading, and will
reimburse the Underwriter for any legal or other expenses reasonably incurred by
the Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by the Underwriter specifically
for use therein, it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in
subsection (b) below; and provided, further, that, with respect to any untrue
statement or omission in any Preliminary Prospectus, this indemnity agreement
shall not inure to the benefit of the Underwriter on account of any loss, claim,
damage, liability or action arising from the sale of any Securities to any
person by the Underwriter if the Underwriter failed to send or give a copy of
the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in the Prospectus and the
Prospectus was made available to the Underwriter prior to the sale of the
Securities. For purposes of the last proviso to the immediately preceding
sentence, the term "Prospectus" shall not be deemed to include the documents
incorporated by reference therein, and no Underwriter shall be obligated to send
or give any supplement or amendment to any document incorporated by reference in
any Preliminary Prospectus or Prospectus to any person other than a person to
whom such Underwriter had delivered such incorporated document or documents in
response to a written request therefor.
Insofar as the foregoing indemnity agreement, or the representations and
warranties contained in Section 2(b), may permit indemnification for liabilities
under the Act of any person who is an Underwriter or a partner or controlling
person of an Underwriter within the meaning of Section 15 of the Act and who, at
the date of this Agreement, is a director, officer or controlling person of the
Company, the Company has been advised that in the opinion of the Commission such
provisions may contravene Federal public policy as expressed in the Act and may
therefore be unenforceable. In the event that a claim for indemnification under
such agreement or such representations and warranties for any such liabilities
(except insofar as such agreement provides for the payment by the Company of
expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such a
person, the Company will submit to a court of appropriate jurisdiction (unless
in the opinion of counsel for the Company the matter has already been settled by
controlling precedent) the question of whether or not indemnification by it for
such liabilities is against public policy as expressed in the Act and therefore
unenforceable, and the Company will be governed by the final adjudication of
such issue.
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company 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 any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(with respect to the Prospectus, in light of the circumstances under which they
were made) not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by the Underwriter consists of
the information contained under the caption. Underwriting Discounts and
Commissions in the price box on the cover page and footnote 2 thereto, the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Underwriter, the legend concerning stabilizing on the inside front cover
page and the concession and reallowance figures appearing in the third paragraph
under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above, except to the extent it has been materially
prejudiced by such failure; and provided, further, that such omission will not
relieve it from any liability which it may otherwise have to an indemnified
party. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that the indemnified party shall have the right to employ counsel to represent
the indemnified party and their respective controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the indemnified party against the indemnifying party under this
Section 7 if the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or, if in the written opinion of counsel to either the indemnifying party or the
indemnified party, representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest between them, and in
that event the fees and expenses of one firm of separate counsel (in addition to
the fees and expenses of local counsel) shall be paid by the indemnifying party.
No indemnifying party shall, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriter.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has 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.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each director, officer, employee and
agent of the Underwriter and to each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director, officer, employee or agent of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Securities. If for any reason the purchase of the Securities
by the Underwriter is not consummated, the Company shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Company and the Underwriter pursuant to Section 7
shall remain in effect, and if any Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the Securities by the
Underwriter is not consummated for any reason the Company will reimburse the
Underwriter for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Securities; provided that the Company shall not be obligated under this Section
8 to reimburse the Underwriter for any expenses (including any reasonable fees
and disbursements of counsel) in excess of [$ ].
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to CS First Boston Corporation, Park Avenue Plaza, New York, N.Y. 10055,
Attention: Investment Banking Department--Transactions Advisory Group, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at 302 South 36th Street, Suite 400, Omaha, Nebraska 68131, Attention:
General Counsel.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with the Underwriter's understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
Very truly yours,
CALIFORNIA ENERGY COMPANY, INC.
By.....................................
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CS FIRST BOSTON CORPORATION
By...................................
Name:
Title:
SCHEDULE A
Subsidiaries
Coso Funding Corp.
Incorporated in Delaware
Coso Hotsprings Intermountain Power, Inc. (CHIP)
Incorporated in Delaware
China Lake Operating Co. (CLOC)
Incorporated in Delaware
Coso Technology Corporation (CTC)
Incorporated in Delaware
China Lake Geothermal Management Company (CLGMC)
Incorporated in Delaware
China Lake Plant Services, Inc.
Incorporated in California
Coso Hotsprings Overland Power, Inc.
Incorporated in Delaware
CE Geothermal, Inc.
Incorporated in Delaware
Western States Geothermal Company
Incorporated in Delaware
Intermountain Geothermal Company
Incorporated in Delaware
California Energy Development Corporation
Incorporated in Delaware
California Energy Yuma Corporation
Incorporated in Utah
Rose Valley Properties, Inc.
Incorporated in Delaware
CE Holt Company, Inc.
Incorporated in Delaware
CBE Engineering Co.
Incorporated in Delaware
CE Exploration Company
Incorporated in Delaware
CE Newberry, Inc.
Incorporated in Delaware
CE International Investments Ltd.
Incorporated in Bermuda
CE Philippines Ltd.
Incorporated in Bermuda
CE Mahanagdong Ltd.
Incorporated in Bermuda
Ormat Cebu Ltd.
Incorporated in Bermuda
CE Cebu Geothermal Power Company, Inc.
Incorporated in the Philippines
CE Indonesia Ltd.
Incorporated in Bermuda
CE Casecnan Ltd.
Incorporated in Bermuda
CE Singapore Ltd.
Incorporated in Bermuda
California Energy International Ltd.
Incorporated in Bermuda
CE Casecnan Water and Energy Company, Inc.
Incorporated in the Philippines
Capital Stock: Owned 100% by CE Casecnan Ltd.;
La Prairie Group Contractors (International) Ltd. and
San Lorenzo Ruiz Builders & Developers Group, Inc.
each are entitled to a 15% equity interest
Magma Power Company
Incorporated in Nevada
California Energy Operating Company*
Incorporated in Delaware
Salton Sea Power Company*
Incorporated in Nevada
Vulcan Power Company*
Incorporated in Nevada
Imperial Magma*
Incorporated in Nevada
Magma Land Company I*
Incorporated in Nevada
Desert Valley Company*
Incorporated in California
Fish Lake Power Company*
Incorporated in Delaware
Magma Netherlands, B.V.*
Formed in the Netherlands
Tongonan Power Investment, Inc.*
Incorporated in the Philippines
Salton Sea Funding Corporation* (SSFC)
Incorporated in Delaware
Salton Sea Royalty Corporation*
Incorporated in Delaware
CE Luzon Geothermal Power Company, Inc.
Incorporated in the Philippines
Capital Stock: Owned 50% by CE Mahanagdong Ltd.;
50% by Kiewit Energy International (Bermuda) Ltd.;
an industrial company has the right to acquire 10%
of the equity - 5% from CE Mahanagdong Ltd. and 5%
from Kiewit Energy International (Bermuda) Ltd.
Himpurna California Energy Ltd.
Incorporated in Bermuda
Capital Stock: Owned 90% by CE Indonesia Ltd.; 10%
by P.T. Himpurna Enersindo Abadi; California Energy
International Ltd. has an option to acquire an
interest in P.T. Himpurna or its project company
shares equal to up to 4% of the project company;
under the Joint Operating Contract, Pertamina has
certain rights to acquire up to a 25% interest in the
Joint Operating Contract, but not under the Energy
Sales Contract
Patuha Power, Ltd.
Incorporated in Bermuda
Capital Stock: Owned 90% by CE Singapore Ltd.;
10% by P.T. Enersindo Supra Abadi; P.T. Enersindo
Supra Abadi has the right to acquire an additional
20% of the project equity in certain circumstances
and for a limited time; under the Joint Operating
Contract, Pertamina has certain rights to acquire up
to a 25% interest in the Joint Operating Contract,
but not under the Energy Sales Agreement
- --------
* Indicates also a Magma Subsidiary.
SCHEDULE B
Joint Ventures
Coso Energy Developers (CED)
Formed in California
General Partnership: 48% CHIP; 52% Caithness Coso
Holdings, L.P.
Coso Finance Partners
Formed in California
General Partnership: 46.3% owned by CLOC; 53.7%
owned by ESCA I, L.P.
Coso Power Developers (CPD)
Formed in California
General Partnership: 50% owned by CTC; 50% by
Caithness Navy II
Coso Transmission Line Partners
Formed in California
General Partnership: Owned 50% by CED; 50% by CPD
Coso Finance Partners II
Formed in California
General Partnership: Owned 50% by CLGMC; 50% by
ESCA II, L.P.
China Lake Joint Venture
Formed in California
General Partnership: Owned 50%
by California Energy Company, Inc.; 50% by Caithness Geothermal 1980, Ltd.
Coso Land Company (CLC)
Formed in California
General Partnership: Owned 50% by California Energy Company, Inc.;50% by
Caithness Geothermal 1980, Ltd.
Coso Geothermal Company
Formed in California
General Partnership: Owned 57% by CLC; 16% by California Energy Company, Inc.
Vulcan/BN Geothermal Power Company*
Formed in Nevada
Partnership Interests: Vulcan Power Company 50%
General Partner; BN Geothermal, Inc. 50% General
Partner
Del Ranch, L.P.*
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; California Energy Operating Company 40% General Partner; Conejo
Energy Company 10% Limited Partner and 40% General Partner
Elmore, L.P.*
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; California Energy Operating Company 40% General Partner; Niguel
Energy Company 10% Limited Partner
and 40% General Partner
Leathers, L.P.*
Formed in California
Partnership Interests: Magma Power Company 10%
Limited Partner; California Energy Operating Company 40% General Partner; San
Felipe Energy Company 10% Limited Partner and 40% General Partner
Salton Sea Brine Processing L.P.*
Limited Partnership Formed in California
Salton Sea Power Generation L.P.*
Limited Partnership Formed in California
Visayas Geothermal Power Company*
Partnership Formed in the Philippines
Yuma Cogeneration Associates (YCA)
Formed in Utah
* Indicates also a Magma Joint Venture.
SCHEDULE C