NEW CENTURY ENERGIES, INC.
(a Delaware corporation)
2,500,000 Shares of Common Stock
Purchase Agreement
October 29, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
New Century Energies, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") with respect to the issue and sale by the
Company and the purchase by Merrill Lynch of the number of shares of Common
Stock, par value $1.00 per share, of the Company ("Common Stock") set forth in
Schedule A hereto. The aforesaid 2,500,000 shares of Common Stock to be
purchased by Merrill Lynch are hereinafter called the "Securities".
The Company understands that Merrill Lynch proposes to make a public
offering of the Securities as soon as it deems advisable after this Agreement
has been executed and delivered.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to Merrill Lynch as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with Merrill Lynch
as follows:
(i) Registration Statement Filing. A registration statement on Form
S-3 (File No. 333-40361) in respect of the Common Stock has been filed by
the Company with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Act"), and delivered to
Merrill Lynch; such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to Merrill Lynch, have been
declared effective by the Commission in such form; the registration
statement on Form S-3 (File No. 333-64067) filed by the Company with the
Commission pursuant to Rule 462(b) (the "Rule 462(b) Registration
Statement") of the rules and regulations of the Commission under the Act
(the "1933 Act Regulations"), in the form heretofore delivered to Merrill
Lynch, has become effective under the Act in such form; and no stop order
suspending the effectiveness of such registration statement or such Rule
462(b) Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Company, threatened
by the Commission. The various parts of such registration statement,
including all exhibits thereto and the documents incorporated by reference
in the prospectus contained in the registration statement at the time such
part of such registration statement became effective, each as amended at
the time such part of such registration statement became effective,
together with such Rule 462(b) Registration Statement, are referred to
herein collectively as the "Registration Statement". The final prospectus
and the final prospectus supplement relating to the offering of the
Securities, in the form first furnished to Merrill Lynch by the Company for
use in connection with the offering of the Securities, are referred to
herein collectively as the "Prospectus". Any reference herein to the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Prospectus; and any reference to any amendment
or supplement to the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and incorporated by reference in such Prospectus. Any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include the Company's most recent annual report on Form 10-K (the "Form
10-K"), quarterly reports on Form 10-Q and current reports on Form 8-K
filed pursuant to Section 13 or 15(d) of the Exchange Act after the
effective date of the Registration Statement that are incorporated by
reference in the Registration Statement. For purposes of this Agreement,
all references to the Registration Statement or Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include
any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus and any amendment or supplement thereto, when they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder (the
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"1934 Act 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, in the
light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the
Registration Statement or the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Exchange Act and the 1934 Act Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iii) Compliance with Registration Requirements. The Registration
Statement and any amendment thereto comply, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will comply, in all material respects with the requirements of
the Act and the 1933 Act Regulations and do not and will not (i) as of the
applicable effective date as to the Registration Statement, the Rule 462(b)
Registration Statement and any amendment thereto and (ii) as of the
applicable filing date, as of the date hereof and as of the Closing Time as
to the Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by Merrill
Lynch expressly for use therein.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries, Public Service Company of Colorado
("PSCo") and its consolidated subsidiaries and Southwestern Public Service
Company ("SPS") and its consolidated subsidiaries, in each case, at the
dates indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries, PSCo and its
consolidated subsidiaries, and SPS and its consolidated subsidiaries, in
each case for the periods specified; and such financial statements have
been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein.
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(v) Independent Accountants. Arthur Andersen LLP are independent
public accountants with respect to the Company as required by the Act and
the 1933 Act Regulations.
(vi) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the business, property or condition, financial
or otherwise, of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise and (C) except for
regular dividends on the Common Stock, in amounts per share that are
consistent with past practice, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(vii) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with due corporate authority to
own and operate its properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(viii) Good Standing of Subsidiaries. Each "significant subsidiary"
(as such term is defined in Rule 1-02 of Regulation S-X promulgated under
the Act) of the Company (each a "Significant Subsidiary" and, collectively,
the "Significant Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not have a Material Adverse Effect.
Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and is validly issued,
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and
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clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. None of the outstanding shares of capital stock of any
Significant Subsidiary was issued in violation of preemptive or other
similar rights of any securityholder of such Significant Subsidiary.
(ix) Absence of Defaults and Conflicts by the Company. Neither the
Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject, except for
such defaults that would not result in a Material Adverse Effect. The
issuance and sale of the Securities by the Company, the compliance by the
Company with all of the provisions of this Agreement, the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions herein contemplated, will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any contract, indenture, mortgage, deed
of trust, loan or credit agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties.
(x) Authorization and Description of Securities. The issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued by the Company and are fully paid and
non-assessable, and none of such shares of capital stock was issued in
violation of preemptive or other similar rights of any securityholder of
the Company. The Securities have been duly authorized by the Company for
issuance and sale pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable; each of the Common Stock and the associated preferred stock
purchase rights (the "Rights") conforms in all material respects to the
statements relating thereto contained in the Prospectus; such descriptions
conform in all material respects to the rights set forth in the instruments
defining the same; no holder of the Securities is or will be subject to
personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to preemptive or other similar rights of any
securityholder of the Company.
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(xi) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the proceeds therefrom as described in the Prospectus will
not be, an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended (the "1940 Act").
(xiii) Absence of Further Requirements. No consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties is required for the issuance
and sale of the Securities by the Company, the execution, delivery and
performance by the Company of this Agreement, or the consummation of the
transactions contemplated herein, except the registration of the Securities
under the Act, the filing of an application with, and receipt of an order
from, the Commission under the Public Utility Holding Company Act of 1935,
as amended (the "1935 Act"), which has been obtained, with respect to the
transaction contemplated by this Agreement, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the issuance and sale,
as the case may be, of the Securities.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration Statement
or the Prospectus (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to Merrill Lynch or to counsel for Merrill Lynch shall be
deemed a representation and warranty by the Company to Merrill Lynch as to the
matters covered thereby.
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Section 2. Sale and Delivery to Merrill Lynch; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to Merrill Lynch, and Merrill Lynch agrees to purchase from the
Company, at the price per share set forth in Schedule B, the number of
Securities set forth in Schedule A opposite its name.
(b) Payment. Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, or at such other place as shall be agreed upon
by Merrill Lynch and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof, or such other time not later than ten
business days after such date as shall be agreed upon by Merrill Lynch and the
Company (such time and date of payment and delivery being herein called "Closing
Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
Merrill Lynch for its account of certificates for the Securities to be purchased
by it.
(c) Denominations; Registration. Certificates for the Securities shall be
in such denominations and registered in such names as Merrill Lynch may request
in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by Merrill Lynch in The City of New York not later than 9:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
Section 3. Covenants of the Company. The Company agrees with Merrill Lynch:
(a) Compliance with Securities Regulations and Commission Requests. To
prepare the Prospectus in a form approved by Merrill Lynch and to file such
Prospectus pursuant to Rule 424(b) under the Act within the time prescribed
under Rule 424(b) under the Act; to make no further amendment or supplement
to the Registration Statement or the Prospectus prior to the Closing Time
to which Merrill Lynch reasonably objects promptly after reasonable notice
thereof; to advise Merrill Lynch, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish Merrill Lynch with copies
thereof; prior to the termination of the offering of the Securities, to
file
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promptly all reports and any definitive proxy or information statements
required to be filed with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act; to advise Merrill Lynch, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of the Prospectus, of the suspension
of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) Blue Sky Qualification. To use its best efforts, in cooperation
with Merrill Lynch, to qualify the Securities for offering and sale under
the applicable securities laws of such jurisdictions of the United States
as Merrill Lynch may designate and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(c) Delivery of Prospectus. To furnish Merrill Lynch with copies of
the Prospectus in such quantities as Merrill Lynch may reasonably request,
and, if the delivery of a prospectus is required in connection with the
offer or sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would contain an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if or any other reason it
shall be necessary during such period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act or the Exchange Act, to
notify Merrill Lynch and upon the request of Merrill Lynch to file such
document and to prepare and furnish without charge to Merrill Lynch and to
any dealer in securities as many copies as Merrill Lynch may reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance.
(d) Rule 158. To file timely such reports pursuant to the Exchange Act
as are necessary in order to make generally available to its
securityholders as soon as
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practicable an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the Act.
(e) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of Common Stock, or any
securities convertible into or exercisable or exchangeable for Common Stock
or file a registration statement under the Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence will not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the Rights or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus,
(C) any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee and director benefit plans of the
Company, (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan or (E) the issuance by
the Company of shares of Common Stock as consideration for any acquisition
by the Company of another person, provided that, prior to the issuance of
such shares of Common Stock, the Company shall have obtained and delivered
to Merrill Lynch copies of an agreement from each person to which such
shares will be issued, substantially to the effect set forth in this
Section 3(e) and in form satisfactory to Merrill Lynch.
(f) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act,
will file all documents required to be filed with the Commission pursuant
to the Exchange Act within the time periods required by the Exchange Act
and the 1934 Act Regulations.
(g) Listing. To use its best efforts to list the Securities on the New
York Stock Exchange.
(h) Delivery of Registration Statements. To furnish to Merrill Lynch
copies of the manually signed Registration Statement, including the Rule
462(b) Registration Statement, as initially filed with the Commission, of
all amendments thereto, and of all documents incorporated by reference
therein (including all exhibits filed therewith, other than exhibits which
have previously been furnished to you), copies of each
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manually signed consent and certificate of independent accountants and of
each other person who by his profession gives authority to statements made
by him and who is named in the Registration Statement as having prepared,
certified or reviewed any part thereof, and to furnish to you sufficient
unsigned copies of the foregoing (other than exhibits, including consents
affixed as exhibits, to the Registration Statement) as you may reasonably
request for distribution.
(i) Use of Proceeds. To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus.
Section 4. Payment of Expenses.
(a) Expenses. The Company covenants and agrees with Merrill Lynch that it
will pay the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Prospectus
and any amendments and supplements thereto and the mailing and delivering of
copies thereof to Merrill Lynch and dealers; (ii) the cost of printing or
producing any Agreement Among Underwriters, this Agreement, the Blue Sky Survey
and any supplement thereto and any other documents in connection with the
offering, purchase, sale, issuance and delivery of the Securities; (iii) all
expenses in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 3(b) hereof, including
the reasonable fees and disbursements of counsel for Merrill Lynch in connection
with such qualification and in connection with the Blue Sky Survey and any
supplement thereto; (iv) the costs and charges by the transfer agent or
registrar; (v) all fees and expenses in connection with the listing of the
Securities on the New York Stock Exchange; (vi) the printing of the Securities
in certificated form, if required; and (vii) all other costs and expenses
incident to the performance of obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section 4, Section 6, Section 7 and Section 9 hereof,
Merrill Lynch will pay all its own costs and expenses, including the fees of its
counsel, stock transfer taxes on resale of any of the Securities by it, and any
advertising expenses connected with any offers it may make.
(b) Termination of Agreement. If this Agreement is terminated by Merrill
Lynch in accordance with the provisions of Section 5 or Section 9(a)(i) hereof,
the Company shall reimburse Merrill Lynch for all of its out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for Merrill Lynch.
Section 5. Conditions of Merrill Lynch's Obligations. The obligations of
Merrill Lynch hereunder are subject to the accuracy of the representations and
warranties of the
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Company contained in Section 1 hereof or in certificates of any officer of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following
additional conditions:
(a) Effectiveness of Registration Statement. The Prospectus shall have
been filed with the Commission pursuant to Rule 424(b) under the Act within
the applicable time period prescribed for such filing by the 1933 Act
regulations; and no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or be pending or
threatened by the Commission.
(b) Opinion of Counsel for Merrill Lynch. Debevoise & Plimpton,
counsel for Merrill Lynch, shall have furnished their written opinion,
dated the Closing Time, with respect to the matters referred to in clauses
(i), (iii), (vi), (vii) (solely as to preemptive or similar rights arising
by operation of law or under the charter or bylaws of the Company), (viii),
(ix), (xii), and the last paragraph of Section 5(c) hereof and such related
matters as you may request; and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters.
(c) Opinion of Counsel for Company. Cahill, Gordon & Reindel, counsel
for the Company, shall have furnished to Merrill Lynch their written
opinion, dated the Closing Time, in form and substance satisfactory to
Merrill Lynch, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement.
(ii) To the best of our knowledge, the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, except
where the failure to so qualify or be in good standing would not have
a Material Adverse Effect.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The issuance and sale of the Securities by the Company, the
compliance by the Company with all of the provisions of this
Agreement, and the consummation of the transactions contemplated
herein, will not conflict with or
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result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any agreement or instrument known to
such counsel to which the Company is a party or by which the Company
is bound or to which and of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any court or
government agency or body having jurisdiction over the Company or any
of its properties.
(v) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(vi) The Securities have been duly authorized by the Company for
issuance and sale to Merrill Lynch pursuant to this Agreement, and
when delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued,
fully paid and non-assessable and no holder of the Securities is or
will be subject to personal liability by reason of being such a
holder. The Rights have been duly authorized and validly issued.
(vii) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(viii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter or
by-laws of the Company and with the requirements of the New York Stock
Exchange.
(ix) The descriptions of the Common Stock and the Rights in the
Company's Form 8-B/A and Form 8-A, respectively, referred to and
incorporated by reference in the Prospectus, insofar as they are, or
refer to, statements of law, summary of legal matters or agreements,
the Company's charter and by-laws or legal conclusions, have been
reviewed by us and are correct in all material respects and fairly
present the information purported to be given.
(x) To the best of our knowledge, the Company is not in violation
of its charter or by-laws and no default by the Company exists in the
due performance or observance of any material contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument.
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(xi) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior
to the Closing Time (in each case, other than the financial statements
(including the notes thereto) and related schedules, and other
financial or statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion), when they
were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the 1934 Act
Regulations.
(xii) The Registration Statement, including the Rule 462(b)
Registration Statement, is effective under the Act and, to the best of
our knowledge, no proceedings for a stop order suspending the
effectiveness of the Registration Statement or the Rule 462(b)
Registration Statement have been instituted or are pending or
threatened by the Commission. The Prospectus has been filed with the
Commission pursuant to Rule 424(b) under the Act in the manner and
within the time period required by Rule 424(b) under the Act. The
Registration Statement, including the Rule 462(b) Registration
Statement, and the Prospectus and any amendments and supplements
thereto made by the Company prior to the Closing Time (in each case,
other than the financial statements (including the notes thereto) and
related schedules and other financial or statistical data contained or
incorporated by reference therein, as to which such counsel need
express no opinion), comply or will comply, as the case may be, as to
form in all material respects with the requirements of the Act and the
1933 Act Regulations.
(xiii) The Company is not, and upon the issuance and sale of the
Securities as contemplated by this Agreement and the application of
the proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment
company" required to be registered under the 1940 Act.
(xiv) To the extent required by law, the issuance and sale of the
Securities have been duly authorized and approved by an order of the
Commission under the 1935 Act, and such order is final and in full
force and effect on the date hereof, the time for appeal therefrom or
review thereof or intervention with respect thereto having expired; no
further approval, authorization, consent or other order of any public
board or body is legally required (other than in connection or
compliance with the provisions of the securities laws of any
jurisdiction) for the offering, issuance, sale or delivery by the
Company of the Securities.
13
Such counsel shall state that they do not know of any legal or
governmental proceeding (pending or threatened) required to be
described in the Registration Statement or Prospectus, as amended or
supplemented to the date hereof, which is not described as required,
nor of any contract or document of a character required to be
described in the Registration Statement or the Prospectus, as amended
or supplemented to the date hereof, or to be filed as an exhibit to
the Registration Statement which is not described or filed as
required.
We have participated in conferences with officers and other
representatives of the Company, your representatives and
representatives of the independent accountants for the Company at
which the contents of the Registration Statement and the Prospectus
and related matters were discussed. The limitations inherent in the
independent verification of factual matters, the role of outside
counsel and the character of determinations involved in the
preparation of the Registration Statement and the Prospectus are such
that we are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus (except to the limited
extent referred to in paragraph (ix) above). On the basis of and
subject to the foregoing, no facts have come to our attention which
lead us to believe that the Registration Statement, at the time it
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (it being understood that we express no belief with
respect to the financial statements, including the notes thereto, or
any other financial or statistical data contained or incorporated by
reference in the Registration Statement or the Prospectus).
(d) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
business, property or condition, financial or otherwise, of the Company and
its subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business, and Merrill Lynch shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial officer, chief accounting officer or Treasurer of the
Company, dated as of the Closing Time to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made
14
at and as of the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
are contemplated by the Commission.
(e) Accountant's Comfort Letter. On the date of this Agreement, Arthur
Andersen LLP shall have furnished to Merrill Lynch a letter, dated the date
of this Agreement, in form and substance satisfactory to Merrill Lynch
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-Down Comfort Letter. At the Closing Time, Merrill Lynch
shall have received from Arthur Andersen LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to the Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only
to official notice of issuance.
(h) Additional Documents. At the Closing Time, counsel for Merrill
Lynch shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to Merrill
Lynch and counsel for Merrill Lynch.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by Merrill Lynch by notice to the Company
at any time at or prior to the Closing Time and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
15
SECTION 6. Indemnification and Contribution.
(a) Indemnification of Merrill Lynch. The Company agrees to indemnify and
hold harmless Merrill Lynch and each person, if any, who controls Merrill Lynch
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission or any alleged
untrue statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by
Merrill Lynch expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Merrill Lynch
agrees that it will indemnify and hold harmless the Company, its directors, and
each of its officers who signed the Registration Statement and each person, if
any, who controls the Company
16
within the meaning of Section 15 of the Act or Section 20 of the 1934 Act to the
same extent as the indemnity agreement set forth in Section 6(a) hereof, but
only with respect to statements or omissions made in the Registration Statement
or the Prospectus, or any amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company by Merrill Lynch
expressly for use in the Registration Statement or the Prospectus (or any
amendment or supplement thereto).
(c) Action Against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company, in each case reasonably
acceptable to the indemnifying party. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement Without Consent If Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have
17
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
Section 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein; then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and Merrill Lynch on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 Merrill Lynch on the other
hand in connection with the statements or omissions, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and Merrill
Lynch on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total proceeds from the offering of the Securities pursuant
to this Agreement (before deducting expenses) received by the Company, as set
forth on the cover page of the Prospectus (the "Total Proceeds"), and the Total
Discount bear to the aggregate prices at which the Securities are sold by
Merrill Lynch. As used herein, the term "Total Discount" means the difference
between the aggregate prices at which the Securities are sold by Merrill Lynch
and the Total Proceeds.
The relative fault of the Company on the one hand and Merrill Lynch on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by Merrill Lynch and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and Merrill Lynch agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by
18
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, Merrill Lynch 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 Merrill Lynch
has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls Merrill
Lynch within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as Merrill Lynch, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of Merrill Lynch or any controlling person, or by or on behalf of
the Company, and shall survive delivery of the Securities to Merrill Lynch.
Section 9. Termination of Agreement.
(a) Termination; General. Merrill Lynch may terminate this Agreement, by
notice to the Company, at any time at or prior to the Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the business, property or condition, financial or otherwise, of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
19
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Merrill Lynch,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by such exchange or
by order of the Commission, or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
Section 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Merrill Lynch
shall be directed to it at North Tower, World Financial Center, New York, New
York 10281-1201, attention of Syndicate Operations); and notices to the Company
shall be directed to it at 1225 17th Street, Suite 900, Denver, Colorado
80507-5533, attention of Brian P. Jackson.
Section 11. Parties. This Agreement shall each inure to the benefit of and
be binding upon Merrill Lynch and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than Merrill Lynch and
the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of Merrill Lynch and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from Merrill Lynch shall be deemed to be
a successor by reason merely of such purchase.
Section 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
20
Section 13. Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
Merrill Lynch and the Company in accordance with its terms.
Very truly yours,
NEW CENTURY ENERGIES, INC.
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------------
Authorized Signatory
22
SCHEDULE A
Number of Securities
--------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...... 2,500,000
Schedule A-1
SCHEDULE B
NEW CENTURY ENERGIES, INC.
2,500,000 Shares of Common Stock
(Par Value $1.00 Per Share)
The purchase price per share for the Securities to be paid by Merrill Lynch
shall be $46.80.
Schedule B-1